Global M&A, floats in resource sector tumble 34%

THE faltering global economy has taken its toll on corporate deal makers, with floats, mergers and acquisitions drying up across the mining and metals sector.

THE faltering global economy has taken its toll on corporate deal makers, with floats, mergers and acquisitions drying up across the mining and metals sector.

The number of transactions launched globally in the March quarter slumped 34 per cent below the first quarter in 2011, while deal value was down 20 per cent on the same time last year.

Figures compiled by Ernst & Young show almost 300 transactions took place in the March quarters of both 2010 and 2011, but that number slumped to 195 this year.

Total value fell from $US31 billion in the first quarter last year to $US25 billion this year, despite the latter sum being bolstered by 10 deals each worth more than $1 billion.

Canada led the world in value for mining and metals transactions.

An Ernst & Young spokesman, Lee Downham, said despite the numbers there was cause for some optimism, particularly with the massive proposal to merge Glencore and Xstrata still in the pipeline for this year.

Small miners continue to struggle to find finance, with just 17 mining and metals stocks floating in the first three months of this year.

That number was well below the 28 in the December quarter and the 31 in the March quarter of 2011.

Australian mining floats were not immune, with five companies recently withdrawing their application to list on the sharemarket. Yulleba Resources had to withdraw despite seeking just $3 million and working in gold and iron ore, which are near record high prices.

Some energy floats have fared better in Australia, with oil play Pura Vida raising $4 million in February before doubling its offer price to more than 40? inside its first month.

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