January this year saw a very sharp fall in merger and acquisition (M&A) deals in the metals and mining industry worldwide, London-based data analytics and consultancy group GlobalData has reported. The falls were both month-on-month and year-on-year.
The value of global M&A deals in January came to $475.31-million. This represented a 94% drop in relation to December 2019, a collapse of 97.3%, compared with January 2019, and a fall of 89.6% in relation to the average for the previous 12 months.
In regional terms, North America occupied number one spot for both the value of those M&A deals that occurred and the number of deals. Announced deals in North America had a total value of $275.54-million. In country terms, the US recorded the highest deal value, with deals totalling $252.08-million.
With regard to the number of deals, Canada had the most deals at 32 deals. Australia and the US jointly ranked second, with nine each. In regional terms, Asia-Pacific came second in terms of the number of deals, followed by Europe in third place.
M&A deal value was overwhelmingly concentrated in just five deals. Combined, these had a value of $428.48-million and accounted for 90.2% of the total value of all the M&A deals in January.
The second-most-valuable M&A deal in January was concluded in South Africa. This was the $70.45-million purchase of DRDGold by the then Sibanye Gold, now Sibanye- Stillwater.
The world’s biggest M&A deal by value in January was the $250-million takeover of Reading Alloys by Kymera International. Kymera is a US-based global producer of a wide range of metal powders, pastes, granules and ingots. Reading Alloys is a US-based producer of master alloys, advanced engineered materials and metallic powders.
The number three deal, worth $60.52- million, was the acquisition by PT Indotan Halmahera Bangkit (PT Indotan) of Newcrest Singapore Holdings. PT Indotan is a privately held Indonesian group, while Newcrest Singapore Holdings was the wholly owned subsidiary of Australian company Newcrest Mining. The deal gives PT Indotan Newcrest’s 75% share in the Gosowong gold mine, in Indonesia, and 100%-ownership of exploration company PT Puncakbaru Jayatama.
In fourth position is Indian resources and mining group Vedanta Resource’s $39.12- million purchase of Ferro Alloys Corporation (also known as Facor). The latter is another Indian group, which had fallen into insolvency before being snapped up by Vedanta.
The fifth-ranked M&A deal in January was worth $8.39-million. This saw Carbine Resources buying Cockatoo Iron. Carbine Resources is an Australian Stock Exchange-listed exploration company, while Cockatoo Iron owns the Cockatoo Island iron-ore project, in Western Australia. (Iron-ore has been mined on Cockatoo Island before, and key infrastructure is already in place, including an airstrip, potable water boreholes and a workshop-office complex.)