Canada topped the global mining and metals sector as the largest target destination by total deal value in the first quarter of 2012, according to Ernst & Young.
“Canada is fast becoming a go-to destination for mining and metals transactions as companies around the world look for a secure and stable environment amid ongoing market and political volatility,” said Richard Crosson, partner in Ernst & Young’s Transaction Advisory Services practice.
“We’ve seen a number of deals, many being small domestic transactions targeting junior explorers and exploration properties.”
Ernst & Young noted that continued economic uncertainty has resulted in mining and metals deal volumes dropping by 34% and 20% respectively, year over year. But it also found that although average deal size was smaller in 2012’s first quarter compared with a year back, the sector saw twice as many megadeals – deals worth more than US$1 billion – in Q1 2012 as it did in Q1 2011.
The company said there was a strong “pipeline” – meaning that companies are showing an appetite to do deals.
“The need to secure raw materials, increase penetration in growth markets, achieve greater vertical integration and consolidate market share will continue to drive M&A this year,” Crosson said.
“Canadian mining and metals companies, unwilling to postpone their growth agenda, are prepared to act opportunistically and strategically.”
.png;w=120;h=80;mode=crop)
