Global mining M&As likely to be moderate and cautious
By Richard Fu |
March 28, 2013, Thursday
|
Print Edition
Print Edition
THE global mining industry is likely to see continued moderate and cautious merger and acquisition activities this year as metal prices stabilize and companies bank on a sustained rise in commodity demand from countries including China, according to a new report.
But mega-mergers may be shelved while mining companies take a prudent stance with shareholder funds while being able to realize positive results on significant acquisitions made in the past few years, PricewaterhouseCoopers said.
Shareholders have been discouraging executives from pursing expensive acquisitions after mining giants including Rio Tinto, Anglo American and Barrick Gold last year had to write down multibillion-dollar investments, PwC said.
"It's challenging to buy existing assets as the market is concerned about over-paying," Teck Resources CEO Don Lindsay was quoted as saying in the PwC report.
Ken Su, PwC's China mining and metals leader, said global M&A activities this year may continue at moderate levels, far behind the frenzied pace of 2011.
"Miners continue to be alert to good opportunities," Su said. But the "appetite for controversy is decreasing as miners are wary of the publicity of past (unsuccessful) deals," he said.
Su said outbound M&A activity from Chinese resource buyers is likely to be at a more "measured and controlled pace" as natural resources will still remain a priority in the long term.
But mega-mergers may be shelved while mining companies take a prudent stance with shareholder funds while being able to realize positive results on significant acquisitions made in the past few years, PricewaterhouseCoopers said.
Shareholders have been discouraging executives from pursing expensive acquisitions after mining giants including Rio Tinto, Anglo American and Barrick Gold last year had to write down multibillion-dollar investments, PwC said.
"It's challenging to buy existing assets as the market is concerned about over-paying," Teck Resources CEO Don Lindsay was quoted as saying in the PwC report.
Ken Su, PwC's China mining and metals leader, said global M&A activities this year may continue at moderate levels, far behind the frenzied pace of 2011.
"Miners continue to be alert to good opportunities," Su said. But the "appetite for controversy is decreasing as miners are wary of the publicity of past (unsuccessful) deals," he said.
Su said outbound M&A activity from Chinese resource buyers is likely to be at a more "measured and controlled pace" as natural resources will still remain a priority in the long term.
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