Professional Documents
Culture Documents
Optimize deals
Optimize deals
Executive summary
Brian Kelly,
US Metals Deals Leader
Key trends/highlights
$2.8B
69%
Decrease in
deal value
versus Q2 2015
73%
Decrease in
deal value
versus Q1 2016
17
45%
Decrease in
deal volume
versus Q2 2015
24%
6%
Decrease in
deal volume
versus Q1 2016
Optimize Deals
Global Metals M&A
Deals Insights
Q2 2016 update
Optimize deals
33
31
24
22
30.0
30
26
25
35.0
25
20
21
18
25.0
20
17
14
20.0
15
15.0
10
10.0
5
$10
$3
2Q16
$6
1Q16
$43
4Q15
$9
3Q15
$7
2Q15
$13
1Q15
$10
4Q14
$9
3Q14
$3
2Q14
3Q13
0.0
$15
4Q13
$11
1Q14
5.0
Largest transaction
35
28
40.0
Deal Volume
1000
$725
$407
$560
$418
$384
20
400
$286
$246
2Q16
2Q15
1Q15
4Q14
3Q14
<$50 mn
$250 mn to $1,000 mn
Average Deal Size (R-Axis)
200
$238
$162
2Q14
600
$351
1Q16
40
800
$474
3Q15
60
1200
80
1Q14
1400
4Q13
Megadeals
1600
100
3Q13
120
4Q15
$50 mn to $250 mn
>$1,000 mn
Steel
Aluminum
Iron Ore
Other Metals
40.0
30.0
20.0
10.0
0.0
Deal Volume
20
15
10
5
2Q16
1Q16
4Q15
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q16
1Q16
4Q15
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q16
1Q16
4Q15
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q16
1Q16
4Q15
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
Optimize Deals
Global Metals M&A
Deals Insights
Q2 2016 update
Optimize deals
Financial Buyers
40.0
35.0
60%
56%
30.0
50%
47%
25.0
20.0
40%
15.0
10.0
2.7
1.5
1.9
5.5
1.8
4.0
6.0
3.3
3.5
1.8
0.0
0.5
5.2
7.4
1.2
37.1
4.3
4.9
6.7
5.2
7.2
3.0
5.5
6.2
13.5
5.0
30%
20%
30
Deal Volume
10%
20
2Q16
1Q16
4Q15
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
1Q14
4Q13
3Q13
4Q13
8
2Q16
3Q13
10
2Q14
1Q16
1Q14
12
4Q13
11
3Q13
4Q15
2Q16
3Q15
17
8
1Q16
2Q15
14
4Q15
17
3Q15
1Q15
14
2Q15
16
13
1Q15
4Q14
17
4Q14
20
3Q14
0%
3Q14
15
10
2Q14
19
16
10
Regional analysis
M&A activity was dominated by local deals (transactions by targets and acquirers within the same borders) with a 90% share
in total deal value. However, local deals value declined significantly by 62% and 73% compared to Q2 2015 and Q1 2016,
respectively. Cross-border deal activity also declined considerably (by volume and value) on both sequential and year-overyear basis. Local deal activities in Asia & Oceania have dominated the quarters total deal activity, with major deals occurring
in Chinarecorded 59% share of overall deal volume (ten deals) and 72% share of overall deal value ($2.0 billion).
89%
82%
2Q16
75%
3Q15
1Q16
87%
2Q15
81%
70%
1Q15
4Q15
61%
4Q14
64%
2Q14
76%
71%
1Q14
3Q14
76%
4Q13
10%
71%
84%
98%
68%
20%
10%
20%
30%
20%
91%
40%
30%
59%
50%
40%
44%
60%
50%
67%
70%
60%
45%
80%
70%
68%
90%
80%
65%
100%
90%
53%
100%
3Q13
0%
2Q16
1Q16
4Q15
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
0%
North America
South America
North America
South America
UK & Eurozone
Africa/Undisclosed
UK & Eurozone
Africa/Undisclosed
Optimize Deals
Global Metals M&A
Deals Insights
Q2 2016 update
Optimize deals
58%
65%
90%
68%
77%
89%
76%
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
64%
2Q14
68%
50%
1Q14
3Q14
57%
10%
North America
Europe ex-UK & Eurozone
2Q16
1Q16
4Q15
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
0%
3Q13
0%
4Q13
82%
92%
56%
20%
10%
18%
30%
20%
95%
40%
30%
57%
50%
40%
49%
60%
50%
51%
70%
60%
45%
80%
70%
68%
90%
80%
65%
100%
90%
53%
100%
58%
3Q13
South America
Africa/Undisclosed
North America
Europe ex-UK & Eurozone
South America
Africa/Undisclosed
North America
Local: 0 deals
Inbound: 0 deals
Outbound: 1 deal, $0.2 billion
UK & Eurozone
Local: 2 deals, $0.3 billion
Inbound: 1 deal, $0.2 billion
Outbound: 0 deals
South America
Local: 0 deals
Inbound: 0 deals
Outbound: 0 deals
Africa/Undisclosed
Local: 0 deals
Inbound: 0 deals
Outbound: 0 deals
Optimize deals
01/04/16
China
China
Pending
4,656
Aluminum
01/09/16
02/01/16
02/01/16
02/25/16
China
Japan
France
China
China
Japan
Japan
China
Pending
Intended
Completed
Completed
1,129
697
652
555
Aluminum
Steel
Steel
Aluminum
China
China
Pending
537
02/05/16
South Korea
South Korea
Completed
372
Steel
06/01/16
China
China
Pending
347
Aluminum
06/24/16
06/18/16
China
China
China
China
Complete
Pending
322
317
Aluminum
Other Metals
02/02/16
Steel
Target nation
Acquirer name
08/10/15
United States
United States
Deal value*
05/12/15
Mongolia
China
Pending
1,935
Iron Ore
03/31/15
China
China
Completed
1,664
Other Metals
Completed
31,595
Category
Iron Ore
08/04/15
China
China
Completed
1,652
Steel
02/23/15
United States
Grupo Ferroatlantica SA
Spain
Completed
1,333
Other Metals
03/09/15
United States
Alcoa Inc.
United States
Completed
1,268
Other Metals
07/30/15
Brazil
Completed
1,185
Iron Ore
09/08/15
China
Investor Group
China
Pending
1,163
Steel
04/08/15
South Korea
South Korea
Completed
1,148
Steel
05/19/15
China
Investor Group
China
Pending
974
Steel
Target nation
Acquirer name
Deal value*
Category
United States
Completed
3,000
Aluminum
07/12/14
China
Investor Group
China
Completed
2,826
Other Metals
11/24/14
Nacional Minerios SA
Brazil
Completed
2,520
Iron Ore
05/14/14
Hong Kong
China
Pending
2,167
Steel
01/04/14
China
China
Withdrawn
1,780
Other Metals
07/21/14
United States
United States
Completed
1,625
Other Metals
08/19/14
United States
Japan
Completed
1,300
Iron Ore
12/16/14
United States
Partners Group AG
Switzerland
Completed
1,100
09/15/14
United States
Nucor Corp.
United States
Completed
770
Steel
12/11/14
China
Completed
754
Other Metals
Aluminum
* In $US millions
Source: Thomson Reuters and other publicly available sources
Optimize Deals
Global Metals M&A
Deals Insights
Q2 2016 update
About PwC
Authors
Brian Kelly
Optimize
deals
US Metals Deals Leader
Cleveland, Ohio
brian.kelly@pwc.com
(216) 875 3121
Mike Tomera
US Metals Leader
Pittsburgh, Pennsylvania
michael.tomera@pwc.com
(412) 355 6095
Jock OCallaghan
Global Metals Leader
Melbourne, Australia
jock.ocallaghan@au.pwc.com
61 (3) 8603 6137
Smart deal makers are perceptive enough to see value others have
missed, flexible enough to adjust for the unexpected, aggressive enough
to win favorable terms in a competitive environment, and circumspect
enough to envision the challenges they will face from the moment the
contract is signed. But in a business environment where information can
quickly overwhelm, the smartest deal makers look to experienced
advisors to help them fashion a deal that works.
PwCs Deals group can advise metals companies and metals-focused
private equity firms on key M&A decisions, from identifying acquisition or
divestiture candidates and performing detailed buy-side diligence, to
developing strategies for capturing post-deal profits and exiting a deal
through a sale, carve-out, or IPO. With more than 9,800 deals
professionals in 75 countries, we can deploy seasoned teams that combine
metals industry skills with local market knowledge virtually anywhere and
everywhere your company operates or executes transactions.
Although every deal is unique, most will benefit from the broad experience
we bring to delivering strategic M&A advice, due diligence, transaction
structuring, M&A tax, merger integration, valuation, and post-deal
services.
In short, we offer integrated solutions, tailored to your particular deal
situation and designed to help you extract peak value within your risk
profile. Whether your focus is deploying capital through an acquisition or
joint venture, raising capital through an IPO or private placement, or
harvesting an investment through the divesture process, we can help.
For more information about M&A and related services in the global metals
industry, please visit www.pwc.com/us/deals/ or www.pwc.com/us/