TORONTO (miningweekly.com) – In an otherwise stagnant quarter for global mergers and acquisitions (M&A) activity, one large transaction lifted third-quarter deal value by 40% over the preceding quarter, professional services firm KPMG reported in its latest ‘Mining M&A Quarterly Newsletter’.
When compared with the second quarter, deal volume remained flat at 17 transactions, with a $5.4-billion deal to take gold miner Polyus Gold private dominating the activity, KPMG partner Jamie Samograd said on Tuesday.
The Kerimov family, one of Russia’s wealthiest, owned 40% of the former Russian company and had, in early September, made a bid to buy all outstanding shares of Polyus and take the company private. The objective was to bring the head office back to Russia from the UK, where it was moved in 2012 to gain a stock market listing.
The all-cash deal offered $2.97 for each outstanding share, representing a premium of 3% above the one-month average price.
Without this significant deal, the overall global deal value would have declined by $2.2-billion quarter-on-quarter, KPMG advised.
The deal lifted Russia to the quarter’s top acquiring country by deal value at 49%, and the UK to being the top target at 54%, and gold being the top commodity at 56% of the deal volume.
Canada, Brazil and Australia were also active countries, while transactions were also undertaken in the copper, iron-ore and coal sectors.
KPMG noted that the business environment for mining deteriorated again in the third quarter, as share prices plunged more than 17% for the gold index and over 20% for the broader mining index. The price of copper also suffered a 10.2% drop in the period.