Mining M&A To Continue As Assets Undervalued

Mining mergers and acquisitions are at a three-year high and $14 billion worth of deals have been announced this year.

Only since March there have already been four hostile bids, with a total value of $4.5 billion, which contrasts with $594 million during the entire 2013.

Goldcorp’s $3.3bn failed takeover bid for Osisko Mining was the largest unsolicited offer for a mining firm following First Quantum Minerals’ $4.7bn purchase of Inmet Mining in 2013.

Apart from company take-overs and mergers another source of deal flows are major gold companies trimming portfolios to cut costs and keep shareholders happy.

Top gold miner Barrick Gold put on the block eight mines, number two in terms of annual ounces mined, Newmont Mining are also looking at further asset sales, while AngloGold recently announced similar moves.

In total the 10 largest producers have announced $912 million worth of divestments this year according to Bloomberg as smaller firms with lower overheads and more leeway to restructure operations pick up undervalued assets.


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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza