Wednesday, 10 December 2014

Mining M&A to Double as Market Elements Align - Grant Thornton

Summary       Full PDF
Gathering Momentum, the new report, attributes the resurgence of M&A to the confluence of four main factors, identified through feedback from over 250 senior mining executives globally. The first is that with one-in-ten junior miners likely to enter administration and a quarter of major mining companies anticipating challenges with financial covenants, the market can expect significant quantities of distressed assets and low valuations. There is also a ripe environment for matchmaking, with a third of executives at mining companies stating that they are likely to make an acquisition (35% junior and 32% major) and approximately the same amount showing an appetite for selling - believing that their company will either be sold or undergo a partial sale (36% junior and 27% major/other). Furthermore, lower commodity prices are identified by the report as a driver for M&A; pushing companies to band together to generate scale and lower productions costs in order to remain competitive.

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