Steel, metal global mergers and acquisitions may double in 2011

Steel, metal global M&A may double to $60 bil in 2011: PWC. The value of steel and other metals-industry mergers and acquisitions may double in 2011 to about $60 billion as the world economy continues its recovery from the 2009 recession and steelmakers seek access to raw materials, PWC said Tuesday. "In 2011 we are going to see a much higher level of deals than in 2010," James Forbes, head of metals industry mergers & acquisitions at PWC, told reporters in Sao Paulo. "We are out of the recession and producers with integrated mining operations are willing to spend the cash to expand and China continues its steel-industry consolidation." The value of mergers and acquisitions in the world's metals markets rose 80% in 2010 to $27 billion, as companies moved to increase their presence and activity in growing markets such as Asia and South and Central America, PWC said Tuesday when it released its report 'Metals Deals, Forging Ahead, 2010 Annual Review' at an event in Sao Paulo. The largest deal by value in 2010 was the $2.83 billion bid for Korea's Daewoo International Corp. by Korean steelmaker Posco, PWC said. There were 548 mergers and acquisitions in 2010, 5.2% more than in 2009 and more than three times the number recorded in 2003, the first year for which PWC provided data, the New York based accounting and consulting company said in a statement released at an event in Sao Paulo. Asia Pacific with $11.5 billion and South and Central America with $5.8 billion led deal making by value with 43% and 22% of the 2010 world total respectively, PWC said. African deals were worth $3.5 billion or 13% of the total. "Africa is becoming one of the most dynamic areas for metals M&A despite the risks," Forbes said. More than two thirds of the African deal value came from Vale's $2.5 billion purchase of a stake in a Guinean iron-ore mining venture from Guernsey, UK-based BSG Resources. Despite gains, industry merger and acquisition levels are still well below the record $114 billion posted in 2007, with 2011 returning the world metals deals market to 2008 levels, Forbes said. "Levels in 2011 will likely reach but probably not pass levels seen in 2008," he said. PWC said there were $60.6 billion worth of deals in 2008. More than 90% of mergers and acquisitions were in the steel and iron-ore mining industries, PWC said.