Mergers and acquisitions drop 46% q/q – KPMG
TORONTO (miningweekly.com) – During the three months ended March 31, the global mining industry has recorded the lowest number of mergers and acquisitions (M&A) transactions in years, recording only 14 transactions worldwide.
This represented a drop of 46% quarter-over-quarter, professional services firm KPMG said in its first-quarter M&A Newsletter.
The firm reported that deal values plunged 58%, yet both the TSX/S&P Global Gold Index and Global Mining Index rose for the first time in three quarters by 7% and 3%, respectively.
The gold price was flat during the three months, while the copper price ended 5% lower.
Canada was by far the dominant player in the quiet quarter, representing both major acquirer and major target by a wide margin, and factoring into five of the eight top global transactions.
Gold captured 60% of the deal value in six significant transactions – including the largest.
In early February, Tahoe Resources and Rio Alto Mining entered an agreement to combine their businesses in a transaction worth $1.38-billion. Rio Alto shares were exchanged for Tahoe shares and cash at a 22.1% premium.
The deal would create a new intermediate precious metals producer with both silver and gold assets, including the Escobal silver mine, in Guatemala, and the La Arena gold mine, in Peru, as well as Peru’s Shahuindo gold project, which was expected to start production in 2016.
While the copper and uranium sectors each saw a deal and coal and potash saw two deals each, the Canadian royalty space saw some consolidation.
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