Value of mining M&As rebounded after 2017’s decline

B.C.’s largest mining merger and acquisition deals double in value

B.C.’s biggest mining mergers and acquisitions (M&As) in 2018 doubled in value to $9.5 billion compared with $4.6 billion in 2017, which was the second-lowest-valued year for M&As since 2013.

Despite the impressive growth in 2018, the annual value of B.C.’s mining M&As still has a long way to go to reach the 2015 high of $10.4 billion.

While the total value of the province’s M&As has been plagued with swings year to year, the growth in median value has been relatively stable aside from the drop in 2017.

A 272.9% increase since 2014 has driven the median M&A deal value to its highest level in six years. Over the past year, the median M&A deal value on BIV’s list of the biggest mining M&As (page 20) grew 67.9% to $290 million in 2018 from $173 million in 2017. That gain more than wiped out the 27.9% decline experienced in the median value in 2016.

In recent years, the average mining M&A deal value has grown faster than the median value, suggesting that bigger deals higher on the list are growing faster than smaller deals lower on the list. This contrasts with previous years in which smaller deals grew significantly faster than their larger counterparts.

Deals are getting bigger.

In 2018, the largest deal was South32 Ltd.’s $2.1 billion acquisition of Arizona Mining Inc. That deal was more than three times the size of the largest 2014 deal at $621 million.

The value of each of the top four mining M&A deals in 2018 was higher than the top deal five years ago. The smallest deal value growth was even more impressive. It increased 15 times to $90 million in 2018 from $6 million in 2014.