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Commodities Briefing - Category | M&A more

Singapore Exchange prepares formal offer to buy UK’s Baltic Exchange

Posted on 03 August 2016 by VRS  |  Email |Print

Singapore Exchange Ltd (SGX) is readying a formal offer to buy London’s Baltic Exchange following months of discussions that culminated in exclusive talks between both parties, sources familiar with the matter said on Tuesday.
Founded in 1744, the privately-owned Baltic Exchange is no longer a forum for chartering vessels but owns benchmark indexes for global shipping rates and provides a trading platform for the multi-billion dollar freight derivatives market. The sources said both sides had reached key milestones for a deal to proceed and that SGX was getting ready to make a formal offer………………………………………..Full Article: Source

Gold’s M&A spree builds as bullion rally boosts values

Posted on 02 August 2016 by VRS  |  Email |Print

A $US50 billion ($S65 billion) gold-industry deals spree is extending into its third year, even as a surging bullion price makes sealing transactions and valuing mines more difficult. Gold has regained its lustre as investors seek havens from volatile markets and weak interest rates.
While the metal is up about a quarter this year, the value of mergers and acquisitions has soared. The average paid in 133 transactions in the three months to June was $US64 an ounce of gold equivalent in the ground, up from $US36 in the first quarter of 2016, as buyers factor in better long-term price expectations, according to Bloomberg Intelligence………………………………………..Full Article: Source

Gold’s $50 Billion M&A Spree Builds as Rally Boosts Values

Posted on 01 August 2016 by VRS  |  Email |Print

A $50 billion gold-industry deals spree is extending into its third year, even as a surging bullion price makes sealing transactions and valuing mines more difficult. Gold has regained its luster as investors seek havens from volatile markets and weak interest rates. While the metal is up about a quarter this year, the value of mergers and acquisitions has soared.
The average paid in 133 transactions in the three months to June was $64 an ounce of gold equivalent in the ground, up from $36 in the first quarter of 2016, as buyers factor in better long-term price expectations, according to Bloomberg Intelligence………………………………………..Full Article: Source

Metals M&A fall to lowest in two years – PwC report

Posted on 29 July 2016 by VRS  |  Email |Print

The metals deals market remained sluggish in the second quarter of 2016, with mergers and acquisitions activity down to its lowest level in two years, according to a report by PwC. While some metals commodity prices rebounded, metals prices, global demand, and production all generally remained low during the quarter, and companies continued to be challenged by global economic uncertainty and volatility, the report noted.
However, PwC said it was cautiously optimistic that improvement will be seen in the second half of 2016. “Growth in US gross domestic product and continued improvement in relevant end-use sectors like automotive, aerospace, and construction are expected to begin to drive increased demand for metals, and in turn, increased production and stabilisation in the industry,” PwC said………………………………………..Full Article: Source

Abu Dhabi Merger to Create Oil Producer Dwarfing OPEC’s Libya

Posted on 30 June 2016 by VRS  |  Email |Print

Abu Dhabi’s proposed merger of two of its largest sovereign investment funds would create a global energy business that produces more oil than OPEC member Libya and with bigger assets than ConocoPhillips.
The Persian Gulf emirate with about 6 percent of the world’s crude reserves will combine Mubadala Development Co. and International Petroleum Investment Co. to cut costs and boost efficiency, the state news agency WAM reported Wednesday. The deal would pool assets of about $135 billion, many of them non-energy-related, and debt of about $42 billion, according to Bloomberg calculations……………………………………….Full Article: Source

Gold sector M&A to be smaller in scale as big asset sales dry up

Posted on 09 June 2016 by VRS  |  Email |Print

Evolution Mining chairman Jake Klein says the string of big deals that Australian mid-tier gold companies have made to grow their portfolios and attract global investor interest is all but over.
The Australian gold sector benefited from a significant round of transactions over the past two years, as global majors Newmont Mining Corporation and Barrick Gold divested the majority of their Australasian assets to ambitious local miners, including Evolution, Northern Star Resources and OceanaGold. Klein said it was “difficult to see more large assets moving hands” as the majors turned their focus to cash flows from their remaining assets amid a resurgence in the gold price………………………………………..Full Article: Source

Gold Bulls Could Lead M&A Stampede

Posted on 20 May 2016 by VRS  |  Email |Print

Gold producers have a new spring in their step following a rebound in the value of the precious metal, and it is an optimism that could trigger deals. The price of gold has risen more than 18% since the turn of the year, filling the coffers of producers whose balance sheets had already been strengthened by a focus on debt repayments and years of cost cutting following a downturn in prices in 2013.
“Gold has been one of the best performing commodities this year, as investors have sought safe havens amid equity market volatility and as expectations of a US rate hike have been pushed out,” Goldman Sachs analysts noted in a report that upgraded their gold price forecasts to $1,200 an ounce by the end of the year, up 4%………………………………………..Full Article: Source

Mining deals hit new low, but signs of rebound emerge

Posted on 16 May 2016 by VRS  |  Email |Print

The latest fall in acquisition activity in the mining sector may well be the last, with increasing signs that deal flow might be about to rebound. A quarterly mining and metals update from Ernst & Young, to be released today, reveals yet another fall in both the value and volume of mergers and acquisitions in the mining industry, continuing a five-year downward trend.
But the combination of recent commodity price stability, the first long-awaited M&A moves from private equity players and the ­increased willingness of larger companies to part with better quality assets is feeding expectations that a turnaround is getting closer………………………………………..Full Article: Source

Low Crude Prices to Spur More M&A Deals in Oil & Gas After Slump

Posted on 25 April 2016 by VRS  |  Email |Print

Low oil prices will spur more mergers and acquisitions in the oil and gas industry this year with some companies forced to sell to avoid bankruptcy, according to consultants A.T. Kearney. Private equity firms are probable buyers, Richard Forrest, global lead partner for the company’s energy practice, said in an interview in Dubai.
The number of oil and gas transactions declined 37 percent in 2015 as their value fell 2.5 percent to $469 billion, led by Royal Dutch Shell Plc’s acquisition of BG Group Plc and Energy Transfer Equity LP’s purchase of Williams Cos. This year, the number of transactions will go up but the value will probably decline without any big deals, he said………………………………………..Full Article: Source

Chinese goldminers seek offshore acquisitions

Posted on 12 April 2016 by VRS  |  Email |Print

Chinese goldminers are aggressively scouting for overseas acquisitions, encouraged by his­torically low gold prices that could help them scoop up assets cheaply. Though gold prices have risen by more than 16 per cent since hitting a six-year low in December, the metal has still been trading close to levels last seen in 2010, in a range of roughly $US1220-$US1240 a troy ounce.
China is the world’s largest gold consumer and producer, but only a few Chinese companies, such as Zijin Mining Group, have ventured abroad to buy mines, unlike their counterparts in industrial metals………………………………………..Full Article: Source

Oil Bankruptcies Seen Spurring M&A on Signal Prices Near Low

Posted on 10 February 2016 by VRS  |  Email |Print

About 150 oil and gas companies tracked by energy consultant IHS Inc. may go bust as a supply glut pressures prices and punishes revenues. The number of companies at risk is more than twice the 60 producers that have already filed for bankruptcy, Bob Fryklund, chief upstream analyst at IHS, said in an interview.
A further shake out would help stimulate deals that have been on hold because buyers and sellers have disagreed on asset values, he said. Oil has collapsed about 70 percent over the past two years as U.S. shale producers boosted output and the Organization of Petroleum Exporting Countries flooded the market with crude to drive out higher-cost suppliers………………………………………..Full Article: Source

Commodity depression: $1.4trn lost since 2011. M&A the answer?

Posted on 13 January 2016 by VRS  |  Email |Print

The mining sector has been decimated over the past few years with the Bloomberg article below putting the stock losses at $1.4 trillion since 2011. Many investors would see this as a opportunity and the article looks at potential M&A activity for a revival within the sector.
The current scenario sees two classic investment quotes go head to head. On the one hand, as Baron Rothschild was quoted in the 18th century: “Buy when there’s blood in the streets, even if the blood is your own.” And while iconic current day guru Warren Buffett agrees with the concept he doesn’t believe in the commodity space………………………………………..Full Article: Source

Oil and gas deals to ‘ramp up’ in 2016, says report

Posted on 07 January 2016 by VRS  |  Email |Print

A wave of oil and gas deals is set to reshape the energy industry this year, following a collapse in crude prices to their lowest level in eleven years, according to consultants Wood Mackenzie. After the slowest period for deals in more than a decade in 2015, Wood Mac is forecasting a “ramp up” in mergers and acquisitions during 2016 regardless of what happens to oil prices.
The consultancy’s report, published on Wednesday, said that if the price of internationally traded Brent stayed at or near current lows of less than $35 a barrel, oil and gas companies would be forced to sell assets and merge businesses “to free up capital, to cut costs and to survive amid growing financial pressures”………………………………………..Full Article: Source

Gold’s M&A Wave to Roll On as Bullion Tumbles to Five-Year Low

Posted on 03 August 2015 by VRS  |  Email |Print

Gold’s tumble to the lowest since 2010 promises to prolong a mergers and acquisitions boom that’s seen transactions at a three-year high as weaker prices slash asset valuations. Deals valued at $9.6 billion were proposed or completed in the six months to June 30, up 7 percent on the previous half, as producers including OceanaGold Corp. agreed acquisitions, according to data complied by Bloomberg.
They totaled $22.3 billion last year, the highest since 2011, the data show. “I’d expect that thematic to continue and the next wave of activity from an M&A point of view might be more mergers,” Reg Spencer, a Sydney-based analyst at Canaccord Genuity Group Inc., said……………………………………….Full Article: Source

Citi says counter-cyclical mining M&A only for the brave

Posted on 06 July 2015 by VRS  |  Email |Print

Citi’s metals and mining team has poured cold water on any chance that the big miners may embark on a counter-cyclical merger and acquisition spree, saying deals may be restricted to the mid-tier sector. In a note to clients on Monday morning, Citi said subdued metal prices and weak share prices had left investors wondering whether the sector was set for another M&A cycle.
“We are skeptical,” the analysts told clients. “We do not anticipate a return of large-cap M&A – substantial impairments and increased shareholder pressure for returns are preventing current management from acting and are likely to lead to further divestments (’births’), in our view. ……………………………………….Full Article: Source

Global Oil and Gas Sector M&A Activity Remains Sluggish

Posted on 19 May 2015 by VRS  |  Email |Print

Various factors ranging from the lack of availability of quality assets to sellers holding out for better prices are coming together to paint a mixed mergers and acquisitions (M&A) picture in the oil and gas sector, according to industry experts.
Despite an appetite being there, the market is not quite firing up as some were hoping. Speaking at Baker & McKenzie’s Oil & Gas Institute in Houston, USA on Monday, Stephen Trauber, Global Head of Energy at Citigroup’s corporate and investment banking division, said, “When commodities prices started falling around the second quarter of 2014, M&A enthusiasts put their pencils down………………………………………..Full Article: Source

What an Increase in M&A Activity among Gold Miners Could Mean

Posted on 12 May 2015 by VRS  |  Email |Print

Gold traders were bullish for a second week on speculation a weaker dollar may support gold demand. As the U.S. dollar has seen sustained retrenchment lately, the “smart money” is taking the bullish-dollar bets off, as CFTC data show the value of positive bets in the futures pits have fallen to four-month lows.
Bullionvault’s Gold Investor Insight rose in April as clients added the most metal in 20 months. Investors sold the most gold from bullion-backed funds in anticipation of this week’s employment report potentially showing stronger job growth. Gold has posted three straight months of losses, the longest slump since December 2013. The latest payrolls report, which showed a net increase of 223,000 for April, added to recent pressure on gold………………………………………..Full Article: Source

Outside money start to pour into mining M&A

Posted on 05 May 2015 by VRS  |  Email |Print

Mick Davis hasn’t spent a cent of his $6bn, but private money and non-mining players’ share of M&A has already doubled in less than three years. In 2014 the number of mergers and acquisitions in the mining and metals industry doubled from the year before according to data from research company SNL Metals & Mining.
It was far from a bumper year though. At $21 billion deal values were less than half 2012’s tally according to the authors of the report Nick Wright and Mark Ferguson. It also pales against the heady pre-financial crisis days when mining M&A came within shouting distance of the $100 billion mark………………………………………..Full Article: Source

Pricing Up Oil Worry on Shell’s BG Deal

Posted on 23 April 2015 by VRS  |  Email |Print

What is a merger without a bit of arbitrage? Ask Royal Dutch Shell and BG Group. Pentwater Capital Management this week became the first big merger arbitrage fund to disclose a position in BG, after Shell’s $70 billion cash-and-stock deal to buy the U.K. oil and gas company.
But with the deal not slated to close until early next year, and requiring approval from several regulators, other arbitrage funds will likely move slowly in putting on trades, especially with few obvious counter-bidders……………………………………Full Article: Source

Base Metal Mining M&A Activity Expected to Make a Turnaround This 2015

Posted on 15 April 2015 by VRS  |  Email |Print

Base metal mining companies have been wary of acquisitions in the past few years due to global financial crisis and economic downturn. These companies have bought fewer assets that require large capital investment since 2012.
2013 had been a particularly slow year for transactions as companies opted to maximise the values of their assets and enter into joint ventures that reduce costs while maintaining production. Things are looking to go up soon, however, based on a recent report released by SNL Metals and Mining………………………………………..Full Article: Source

Shell’s offer for BG shows how the energy business is changing

Posted on 10 April 2015 by VRS  |  Email |Print

Jam tomorrow, but never jam today. That was long the lament about Britain’s third-largest energy company, BG Group. It was notable for its great prospects, troubled operations, wobbly management and a slumping share price—down 20% in the past 12 months.
Now Shell, an Anglo-Dutch giant, has pounced, with a £47 billion ($70 billion) cash and shares offer which pay BG shareholders a 50% premium on what their holdings were worth just before the bid. Barring regulatory objections, the deal, which will create a $300 billion oil and gas company, will be complete within 15 months………………………………………..Full Article: Source

SocGen to Buy Jefferies Bache Clients in Derivatives Push

Posted on 10 April 2015 by VRS  |  Email |Print

Societe Generale SA, France’s second-biggest bank, agreed to take over most of the clients of Jefferies Group LLC’s Bache futures unit amid a push into derivatives. Jefferies, which is owned by Leucadia National Corp., is closing down the rest of the business, according to a statement Thursday from the New York-based firm.
SocGen will review Bache’s staff and may hire some, said a person with knowledge of the matter who asked not to be identified because the terms are confidential. The purchase follows SocGen’s acquisition in January of a financial industrial-metals portfolio from Barclays Plc. ……………………………………….Full Article: Source

Future oil sector mergers set to be more modest

Posted on 09 April 2015 by VRS  |  Email |Print

Oil prices were at multiyear lows. The world’s largest oil and gas companies were slashing jobs and cutting spending. But their stock prices were sagging and executives were under pressure to replenish reserves. The situation sounds like the backdrop to Wednesday’s announcement by Royal Dutch Shell, the oil group with a market value of nearly £127bn, that it plans to buy smaller UK rival BG Group for £47bn excluding debt.
But similar conditions existed in 1998. Back then the oil industry reacted by unveiling an unprecedented string of megadeals, which created the consolidated behemoths that dominate the energy market today………………………………………..Full Article: Source

Global mining deals to pick up this year

Posted on 09 April 2015 by VRS  |  Email |Print

The number of mining deals worldwide increased in 2014 and this trend is likely to continue this year amid an ongoing commodity price rout that has forced miners to slash capital spending and cut costs, a study released April 8 shows.
According to SNL Metals & Mining’s report, 2014 saw 73 acquisitions that were valued at over US$10 million each, totalling almost $22 billion for the year. The figure, considerably higher than the $12 billion registered in 2013, is nothing to be too excited about, the study hints. The reason? 2014’s total was the third lowest in the past ten years, with only 2013 and 2009 (US$14.88 billion) being more disappointing than last year’s………………………………………..Full Article: Source

Shell ‘in advanced discussions’ to buy BG Group

Posted on 08 April 2015 by VRS  |  Email |Print

BG Group has confirmed that it is “in advanced discussions” with energy giant Shell over a possible merger, in what could be one of the biggest deals of 2015. The mega-merger could produce a company with a combined market capitalisation of more than £200bn ($296bn; €274bn).
BG Group confirmed the news, first reported in the Wall Street Journal, but a Shell spokesman told the BBC: “We’re not making any comment.” Shell has until 5 May to make an offer………………………………………..Full Article: Source

Merger Process With Commodity Regulator to be Smooth: Sebi

Posted on 23 March 2015 by VRS  |  Email |Print

Securities and Exchange Board of India (Sebi) on Sunday said the action plan for proposed merger of Forward Markets Commission (FMC) with itself is under works and expressed hope that the process would be “smooth”.
The Finance Ministry along with capital market watchdog Sebi and commodity market regulator FMC are in dialogue for the merger process, Sebi Chairman U K Sinha said here. “We discussed the proposed merger of FMC with Sebi (Securities and Exchange Board of India) and the plan of action in this regard,” he said after its board meeting, which was addressed by Finance Minister Arun Jaitley………………………………………..Full Article: Source

Oil price volatility to curb M&As

Posted on 03 March 2015 by VRS  |  Email |Print

The oil market volatility will likely curb merger and acquisition activity across several sectors in in the first half of 2015, though a sustained low oil price environment will eventually trigger a consolidation trend among small producers in the oil and gas industry, experts told The Daily Star.
“The uncertainty around the medium term equilibrium oil price is likely to result in a continuation of lower M&A deal volume in the short term,” said Adnan Fazli, oil and gas financial advisory leader for Deloitte Middle East………………………………………..Full Article: Source

Sebi-FMC merger: Soon, commexes may start equity trading

Posted on 02 March 2015 by VRS  |  Email |Print

Merger of the Forward Markets Commission (FMC) with the Securities and Exchange Board of India (Sebi) allows a commodity exchange to expand in segments permitted under a stock exchange and vice versa. From the proposed Bill in this regard, “all recognised associations under the Forward Contracts Regulation Act shall be deemed to be recognised stock exchanges under the Securities Contracts Regulation Act”.
Exchanges, stock and commodities, are excited. Says a senior figure in the sector, on condition of anonymity: “After the merger, stock and commodities exchanges, subject to Sebi permission, will have fungibility in penetrating each other’s market segment.” This means a commodity exchange can start currency derivatives and equity trading. A stock exchange can launch commodity trading………………………………………..Full Article: Source

2015, the dearth of mining M&As

Posted on 03 February 2015 by VRS  |  Email |Print

The mining and metals sector is braced for another tough year, with returns set to disappoint investors while mergers and acquisition (M&A) activity is expected to be weak. The year 2014 for the mining sector has been described as tough and 2015 will be no different, chiefly due to the commodity price slump that is expected to dent the level of deal making.
“With commodity prices falling [in 2014], it was difficult to take a view of effectively putting together a business plan to target an acquisition on the basis where you can have a degree of confidence in underlying numbers,” said Standard Bank global head of mining & metals Rajat Kohli………………………………………..Full Article: Source

Mining M&A expected to double as market elements align

Posted on 06 November 2014 by VRS  |  Email |Print

According to a new Grant Thornton International Ltd. report, the mining sector will herald a new era in mergers and acquisitions (M&A) as a near perfect alignment of factors takes place. Following a slow period for transactions, in which last year’s deal volumes failed to breach the $90bn mark*, Grant Thornton’s research and analysis suggests that a fertile environment will next year lead to a doubling in the value of M&A in the mining sector compared to 2013, irrespective of potential mega-deals such as Glencore and Rio Tinto.
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………………………………………..Full Article: Source

Oil price slide will lead to hiatus in M&A-bankers

Posted on 31 October 2014 by VRS  |  Email |Print

The recent fall in oil prices will put a nascent recovery in oil sector mergers and acquisitions on hold, senior bankers told an industry conference on Thursday.
Until around six to eight weeks ago, there was a sense that the market was recovering and a pickup in deal-making activity, Michael O’Dwyer, co-head of EMEA natural resources at Morgan Stanley, told the Oil and Money conference………………………………………..Full Article: Source

Gold Price Recovery Will Spark M&A Breakout

Posted on 04 September 2014 by VRS  |  Email |Print

A report titled “M&A and Capital Raising in Mining and Metals, 1H 2014″ from Ernest and Young (EY) says that mining and metals deal values in H1/2014 are “down 69% year-on-year, to $16.7 billion ($16.7B), from $53.8B, with deal volumes down 34% over the same period.” Why aren’t more mergers and acquisitions (M&A) happening in the precious metals space?
The first reason is that there are some big egos in the mining sector and some mining companies would prefer to go it alone or at least be in charge. But if both companies want to be in charge, someone is going to lose out. Ego is a big factor. Third is asset quality. Miners looking at other companies believe that their own assets are of superior quality and those of targeted companies are poor. Generally, asset quality is not high. Number four is transaction costs. It costs a lot of money to make a transaction, especially for small companies with limited cash………………………………………..Full Article: Source

M&A and capital raising in mining & metals: H1 2014

Posted on 18 August 2014 by VRS  |  Email |Print

M&A and capital raising activity remained subdued over 1H 2014 - down 69% year-on-year, according to the latest analysis from EY. This was largely the consequence of a continuing commitment to capital discipline and a lack of urgency over investment, given the relative lack of competition for assets.
Improving signals of economic growth in the US and the apparent subsidence of a looming emerging markets crisis have lowered broader market volatility. However, they failed to offset ongoing concerns surrounding growth in China and further near-term commodity price volatility………………………………………..Full Article: Source

Mining M&A activity subdued despite strong deal pipeline

Posted on 14 August 2014 by VRS  |  Email |Print

Multinational professional services group, Ernst & Young, which nowadays likes to be known as EY, has just produced its latest quarterly Mergers and Acquisitions analysis for the mining sector. This shows that there were around 112 deals in the sector during Q2 this year totaling US$9.5b. Deal volume was down 21% on the previous quarter and down 41% on the same quarter in 2013.
Total deal value was up 33% on the previous quarter, primarily due to the US$3.6 billion acquisition of Osisko Mining Corp. by Yamana Gold and Agnico Eagle. Similarly, H1 comparisons show total deal values down 69% year-on-year to US$16.7 billion from US$53.8 billion in H1 2013, the fourth consecutive year of decline………………………………………..Full Article: Source

PwC: 2Q oil and gas M&A activity strongest in 5 years

Posted on 12 August 2014 by VRS  |  Email |Print

The US oil and gas industry experienced a substantial rise in mergers and acquisitions during the second quarter, according to a quarterly report by PwC US Energy Practice. During the 3-month period ending June 30, 54 oil and gas deals took place with values greater than $50 million, accounting for $42.2 billion, compared with 47 deals worth $30.3 billion during last year’s second quarter.
The upward movement is largely attributed to an increase in megadeals, with 12 occurring worth a combined $30.8 billion—73% of total deal value—due to larger oil and gas companies divesting more valuable assets. There were just five megadeals during the first quarter……………………………………Full Article: Source

Mining M&A activity subdued despite strong deal pipeline

Posted on 12 August 2014 by VRS  |  Email |Print

Multinational professional services group, Ernst & Young, which nowadays likes to be known as EY, has just produced its latest quarterly Mergers and Acquisitions analysis for the mining sector. This shows that there were around 112 deals in the sector during Q2 this year totaling US$9.5b.
Deal volume was down 21% on the previous quarter and down 41% on the same quarter in 2013. Total deal value was up 33% on the previous quarter, primarily due to the US$3.6 billion acquisition of Osisko Mining Corp. by Yamana Gold and Agnico Eagle. Similarly, H1 comparisons show total deal values down 69% year-on-year to US$16.7 billion from US$53.8 billion in H1 2013, the fourth consecutive year of decline…………………………………..Full Article: Source

Oil and gas mergers escalating among smaller firms

Posted on 04 August 2014 by VRS  |  Email |Print

Mergers and acquisitions (M&A) activity is escalating among junior oil and gas companies as they attempt to diversify exploration risk and secure cash flows, according to EY’s latest quarterly report on the sector.
Barry Fraser, executive director at the accountancy firm’s Aberdeen practice, said: “Deal making is back on the agenda, with funding for development opportunities at the heart of acquisition and farm-out activity.” One example, according to EY, is the proposed acquisition of Mediterranean Oil and Gas by fellow Aim-quoted company Rockhopper Exploration………………………………………..Full Article: Source

PwC: 2Q oil and gas M&A activity strongest in 5 years

Posted on 31 July 2014 by VRS  |  Email |Print

The US oil and gas industry experienced a substantial rise in mergers and acquisitions during the second quarter, according to a quarterly report by PwC US Energy Practice.During the 3-month period ending June 30, 54 oil and gas deals took place with values greater than $50 million, accounting for $42.2 billion, compared with 47 deals worth $30.3 billion during last year’s second quarter.
The upward movement is largely attributed to an increase in megadeals, with 12 occurring worth a combined $30.8 billion—73% of total deal value—due to larger oil and gas companies divesting more valuable assets. There were just five megadeals during the first quarter. “Over the past 3 months, we continued to see companies looking to realign their portfolios and divest noncore assets, which provided opportunities for acquirers with cash and access to capital,” said Doug Meier, PwC’s US energy sector deals leader………………………………………..Full Article: Source

Commodities Today: The Next M&A Targets In The Utility Sector

Posted on 24 June 2014 by VRS  |  Email |Print

Readers know that we watch numerous areas within the commodity arena as well as industries that either have an impact upon, or are impacted by commodity names. Over the last year or two, we have spent considerable time analyzing utility names due to the low rate environment for bonds and our need to add stability to our portfolios after the big run-ups in some of the oil names we have purchased.
We have looked to diversify across the industry, using some of the larger names to get 4%-5% yields while looking to the small to midsized names as potential buyout candidates down the road………………………………………..Full Article: Source

Food Replacing Oil as China M&A Target of Choice: Commodities

Posted on 02 June 2014 by VRS  |  Email |Print

After spending the past decade and more than $200 billion acquiring mines and oilfields from Australia to Argentina, China’s attention is turning to food.
The world’s most populous nation is confronting a harsh reality: For every additional bushel of wheat or pound of beef the world produces, China will need almost half of that to keep its citizens fed…………………………………….Full Article: Source

Global Agribusiness Set for More Deals

Posted on 16 May 2014 by VRS  |  Email |Print

Singapore-listed Olam, one of the world’s biggest traders in commodities such as nuts, cotton, coffee and cocoa, reported its third-quarter earnings on Thursday–net profit more than doubled from the previous year to 396.1 million Singapore dollars ($316.8 million).
In March, Singapore state investment fund Temasek Holdings Pte. Ltd. made an offer as part of a consortium to buy the remaining 47.5% it doesn’t already own of Olam for about $2 billion, one of a series of mergers and acquisitions moves in the commodities space globally in recent months………………………………………..Full Article: Source

Mining M&A may double with China buying again

Posted on 09 May 2014 by VRS  |  Email |Print

China, the world’s biggest buyer of metals, is back on the hunt for acquisitions, triggered by a decline in prices and a shift in government policy. Chinese demand for assets may help fuel a doubling in the number of mining deals worldwide this year, according to Jay Leary, law firm Herbert Smith Freehills’s joint global relationship partner for BHP Billiton Ltd., the world’s biggest miner. Copper, iron ore and coal are the top targets, he said.
“Over the past six weeks we have seen a significant step- change in the amount of M&A activity in the mining sector,” Leary said in an e-mail. “Over the next year, we would expect Chinese investors to represent a material proportion of mining global transactions, perhaps as much as 30 percent of transactions.”……………………………………….Full Article: Source

Global metals M&A drops to lowest level since 2008 - Study

Posted on 29 April 2014 by VRS  |  Email |Print

Quarterly mergers-and-acquisition activity in the global metals market dropped to its lowest level since 2008 as over-capacity and weak pricing, particularly in the steel segment, remains a concern among buyers, consultancy and accountancy firm PriceWaterHouseCoopers said Monday.
During the first quarter of 2014, there were 13 transactions valued at $50 million or more, totaling $3.3 billion–a 78% decline in deal value from the fourth quarter of 2013, which registered 20 deals worth $15.1 billion, PwC said in its quarterly report. PwC’s M&A metals analysis comprises deals announced in the steel, iron ore, aluminum, copper, nickel and other-non precious metal sectors………………………………………..Full Article: Source

World’s two largest gold miners in talks to merge

Posted on 23 April 2014 by VRS  |  Email |Print

The world’s two largest gold miners, Barrick and Newmont, have been in talks to merge over the past week, highlighting the difficult environment for miners since shares started falling in 2011. A merger would create a $30bn super-company likely to clear antitrust hurdles because it would only account for 13% of global mine production, well below the 35% threshold Canadian antitrust regulators care about.
At the same time, Goldcorp, Yamana and Agnico-Eagles are all looking to takeover Osisko Mining Corp, a Canadian junior miner. With gold prices down, the margins for these miners continue to be depressed, leaving M&A as one of the few avenues to pursue growth………………………………………..Full Article: Source

China Minmetals to buy world’s biggest copper mine

Posted on 16 April 2014 by VRS  |  Email |Print

Minmetals China announced in April 14, that it has put pen to an agreement to buy Glencore Xstrata’s Las Bambas copper mine project in Peru for 5.85 billion U.S. dollars. The project marks the largest external metal mining purchase by a Chinese enterprise.
Located in the Apurimac region in southern Peru, the Las Bambas project is the largest copper mine under construction in the world. On completion, it is expected to produce about 450 thousand tons of fine copper each year. Post-acquisition, China Minmetals will become the largest Chinese enterprise in the the production of copper, and squeeze into the global top 10 of copper producers………………………………………..Full Article: Source

Global commodity traders get deal fever

Posted on 14 April 2014 by VRS  |  Email |Print

Big changes are under way among global energy and food commodity traders, with a flurry of first-quarter acquisitions and leadership moves that cover Asian, European and North American companies.
Last month, Swiss firm Mercuria Energy stepped closer to joining Vitol, GlencoreXstrata and Trafigura at the top of the independent energy and metals trading hierarchy, following its $US3.5 billion purchase of US investment bank JP Morgan’s physical commodity operation………………………………………..Full Article: Source

Meet the Swiss traders who just bought JP Morgan’s commodities business for $3.5 billion

Posted on 21 March 2014 by VRS  |  Email |Print

A global commodities giant in less than a decade. That’s where Mercuria Energy Group is headed. Launched in 2004 by former Goldman Sachs traders Marco Dunand and Daniel Jaeggi, the Geneva, Switzerland-based company was the sixth biggest commodities firm last year, with revenues of $98 billion.
With today’s news that Mercuria will purchase JP Morgan Chase’s commodities business for $3.5 billion, it’s likely to overtake Koch Industries and move up a spot………………………………………..Full Article: Source

Metals M&A to remain in low gear during 2014: PwC

Posted on 06 March 2014 by VRS  |  Email |Print

In fact, M&A activity in the Asia Pacific region, now account for 61% of all deal value globally, compared to only 19% in 2011, according to PwC’s new report, ‘Metals Deals: Forging Ahead 2014 outlook and 2013 review’.
Globally, deal numbers fell 30% year on year with volume touching 2009 levels. In value terms, deal sizes fell 24% year on year but the dip was not as sharp as the slide in volumes. In 2013, total deal value in metals space was $34.8billion, significantly higher than $15.1 billion in 2009. Low growth combined with continued global overcapacity in production does not augur well for strong recovery in metals M&A in 2014, the report said………………………………………..Full Article: Source

M&A in the metals sector at an 8-year low

Posted on 21 February 2014 by VRS  |  Email |Print

Merger and acquisition activity in the metals sector plunged 30 per cent in 2013 to an eight-year low, as slow global growth, falling prices and production overcapacity made it hard for buyers and sellers to agree on valuations.
As the commodities markets slumped last year, just 357 M&A metals deals were completed, compared to 507 in 2012, according to a report by PwC………………………………………..Full Article: Source

Swiss firm Mercuria in talks to buy JPMorgan’s commodities unit

Posted on 07 February 2014 by VRS  |  Email |Print

The Mercuria Energy Group, a fast-growing energy and commodities trading company, is in exclusive talks to acquire the physical commodities business of JPMorgan Chase, according to a person familiar with the discussions.
JPMorgan announced in July that it was exploring strategic alternatives, including a possible sale or spinoff, for the business, which deals in commodities like metals and oil. The business holdings include trading desks and warehouses to store metals………………………………………..Full Article: Source

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