Mergers and Acquisitions: The Politics of Megadeals in the Mining Industry

Abstract

Activity in the mining industry in the Asia-Pacific Region has surged during the last 25 years, as growing populations, higher personal incomes, and increased demand for goods, services, and infrastructure-particularly in China and India-have led to large-scale building programs and rising energy consumption. This has intensified the use of minerals, metals, and oil and gas. While this longitudinal trend has been interrupted by several global and regional financial shocks, including the 1997 Asian Financial Crisis and the 2008 Global Financial Crisis (GFC), both of which saw weakened demand for commodities, mining companies predominantly have experienced a sustained period of production and revenue expansion, and growth in their market capitalisation. Competition for resource deposits, the emergence of a plethora of juniors eager to capitalise on the burgeoning demand, and consolidation at the mid-cap and major level have been observable features of the mining industry market. With this consolidation in mind, here, we examine recent merger and acquisition (M&A) activity in the mining and energy sectors across the Asia-Pacific Region.