Merger and acquisition (M&A) deal activity in the global metals industry indicates that the volume and value of deals announced in the first quarter of 2010 improved from the quarterly lows of 2009, according to the PricewaterhouseCoopers LLP report – Forging ahead: First-quarter 2010 global metals industry mergers and acquisitions analysis. In Q1, 2010, the 21 deals announced rank above the three-year quarterly low of 17 deals announced in both Q1 and Q2 of 2009, although it is down from the 34 deals announced in the fourth quarter of 2009.

Additionally, the $5.9 billion deal value announced in Q1, 2010 remains above the three-year quarterly low of $4.6 billion in the third quarter of 2009. The report says that while deal totals have not yet fully recovered from the downturn, the environment is becoming more conducive to deal activity in the metals sector.

After a relative pause in mega deal activity in the metals sector during 2009, these deals began to re-emerge in Q1, 2010. Two big deals were announced during the first quarter of 2010, exceeding the pace of 2009.

Jim Forbes, Global Metals Leader, PricewatershouseCoopers said: “Globally, the relative sense of urgency to engage in new deals is likely greatest for steel companies, which face a consolidated base of iron ore suppliers. This could lead to additional horizontal mergers among steel constituents or backward integration. Although many strategic buyers have been slow to resume their M&A activities, we believe it is only a matter of time before these acquirers look more seriously at potential growth opportunities. A more stable global economy, generally supportive capital markets, and improved financial positions should encourage these entities to enter the deal market.”

To download the report go to www.pwc.com/us/en/industrial-products/publications/forging-ahead.jhtml