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China ripe for crucial buys, says key report
By Wang Weini |
September 17, 2011, Saturday
|
Print Edition
Print Edition
CHINA is positioned to make opportunistic buys and lead a rebound in global mining mergers and acquisitions, which slowed in the second half of this year, an industry report said yesterday.
Global mining deal value decreased by 32 percent in July on a monthly basis and 25 percent in August, while deal volume dropped 19 percent in July and 7 percent last month, according to a mining deal report by PricewaterhouseCoopers.
"There continues to be a lot of deal assessment activity going on, which may bring about another wave of announcements down the line," PwC's China mining leader Ken Su said, adding that China's demand for metals remains a key factor driving the commodity market and, ultimately, mining M&A down the road.
In the first half of this year, Chinese entities announced 75 acquisitions worth US$4.7 billion, a decrease of 18 percent over a year earlier, and 68 percent of acquisition targets were headquartered in Asia-Pacific emerging markets.
Lackluster Chinese buy-side volumes were not for lack of desire as evidenced by two notable takeover attempts of Canada's Equinox Minerals and Australia's Whitehaven Coal where deal valuation or competition seems to have derailed plans, the report said.
China is expected to continue acquiring gold and other precious metals, as well as quality industrial resource assets such as iron ore, metallurgical coal, fertilizer minerals and base metals, the report said.
PwC also expects China will continue to expand further into frontier markets, such as Mongolia and Africa, along with continued investments in Canada and Australia.
Global mining deal value decreased by 32 percent in July on a monthly basis and 25 percent in August, while deal volume dropped 19 percent in July and 7 percent last month, according to a mining deal report by PricewaterhouseCoopers.
"There continues to be a lot of deal assessment activity going on, which may bring about another wave of announcements down the line," PwC's China mining leader Ken Su said, adding that China's demand for metals remains a key factor driving the commodity market and, ultimately, mining M&A down the road.
In the first half of this year, Chinese entities announced 75 acquisitions worth US$4.7 billion, a decrease of 18 percent over a year earlier, and 68 percent of acquisition targets were headquartered in Asia-Pacific emerging markets.
Lackluster Chinese buy-side volumes were not for lack of desire as evidenced by two notable takeover attempts of Canada's Equinox Minerals and Australia's Whitehaven Coal where deal valuation or competition seems to have derailed plans, the report said.
China is expected to continue acquiring gold and other precious metals, as well as quality industrial resource assets such as iron ore, metallurgical coal, fertilizer minerals and base metals, the report said.
PwC also expects China will continue to expand further into frontier markets, such as Mongolia and Africa, along with continued investments in Canada and Australia.
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