PwC Q3 2012 Global Metals Industry Mergers and Acquisitions Analysis


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PwC Q3 2012 Global Metals Industry Mergers and Acquisitions Analysis

  1. 1. aheadThird-quarter 2012 globalmetals industry mergersand acquisitions analysis
  2. 2. Welcome to the latest edition of Forging ahead, PwC’s analysis of mergers and acquisitions in the global metals industry. In this report, you’ll find an overview of M&A in the sector during the third quarter of 2012, as well as expectations for deal activity in the near future. PwC analysts are monitoring several trends expected to affect the values and locations of deals in the metals sector: • Deal volume and value declined during the third quarter of 2012, in part due to concerns about the recession and sovereign debt issues in the eurozone, as well as the coming “fiscal cliff” in the United States; as a result, no deals involved US targets. • While liquidity remained strong, with cash balances increasing and debt-to-capital levels falling, metals players remained in a holding pattern regarding acquisitions,Sean Hoover waiting for improvements in pricing, demand, or both. • In contrast with the previous quarters in 2012, local market deals were not dominant during the third quarter. More than half of the transactions announced were cross- border, with the acquirer and target based in separate countries. • With 10 local deals valued at a total of more than $1.5 billion, transactions in Asia and Oceania helped drive deal value in the third quarter. Deals in China dropped to three transactions during the quarter, as opposed to nine during the second quarter, indicating that the economic slowdown in China is potentially greater than had been expected. • While aluminum prices have recently surged nearly $400 per ton, prices for base metals are expected to continue to fall throughout the rest of the year, according to AME Group. In addition, developing and emerging economies are contributing to the ongoing problem of overcapacity. With multiple factors driving a decline in transactions, uncertainty is the byword forJim Forbes metals deals in the near future. If current trends continue, indications are that the sector in 2012 will experience an overall decline in deal value of up to 50 percent, as compared to the previous year. Companies are not expected to accelerate acquisitions until supply and demand balance out. We’re pleased to present the third-quarter 2012 edition of Forging ahead as part of our ongoing commitment to provide a better understanding of M&A trends and prospects in the industry. Sean Hoover Jim Forbes US Metals Leader Global Metals LeaderForging ahead 1
  3. 3. Perspective:Thoughts on deal activity in the third quarter of 2012The global economic outlook continues to be of concern, Given the continued decline in the deal environment thisparticularly in the advanced economies. Since the quarter, the outlook for the near term remains uncertain. Inbeginning of the year, six eurozone countries have fallen addition to concerns about the economy, there are otherback into recession and sovereign debt issues remain, issues that may cause investors to postpone deals as they waitwhile in the United States, concerns about the “fiscal cliff” for conditions to improve.and the resulting return to recession concern investors.The emerging markets are seeing slower growth, as well: Commodities pricing remains in decline, and prices for baseChina’s gross domestic product estimate for 2012 was cut metals are generally expected to continue to fall through theby the Asia Development Bank from 8.5% to 7.7%, while balance of 2012, according to AME Group. The averageIndia’s was cut from 7.0% to 5.6%. London Metal Exchange (LME) aluminum spot price for August fell almost 2%, and since January, the monthlyDespite these economic issues, liquidity remains strong for average prices are down more than 15%. However,many metals producers. We’ve seen an increase in cash aluminum prices have surged nearly $400 per ton in recentbalances over the past two years, and debt-to-capital levels weeks as European and US central banks have announcedcontinue to decline. Normally, we would expect to see an plans to stimulate their economies. Despite thisincrease in activity, given that these metrics indicate that improvement, however, prices are still well below those ofpotential acquirers have become better capitalized over the the beginning of the year. For steel, the situation is notlong term. However, in the current economic environment, much better: the world composite carbon steel price fellit does appear that these acquirers may be waiting for 0.5% in August, down more than 7.2% since the beginningimprovements in pricing or demand. of the year.The absence of deals involving US targets in the third quarter Overcapacity also remains a problem, as new capacitymay be attributable to the stronger US dollar, which makes continues to come online from developing and emergingUS targets more expensive, on a relative scale, to offshore economies. Huangguoshu Aluminum, for instance, has saidacquirers. Also, concerns about budget woes and the possible that the expansion project at the Anshun Huangguoshureturn to recession may be causing potential acquirers of US smelter is under way, with production expected to haveassets to wait until the situation is stabilized. begun in October 2012. Also, despite sluggish demand, Chinese steel mills have not responded to market signals ofUntil the third quarter, local market deals accounted for a falling steel prices and have maintained production levels atsignificant portion of deal activity. However, the trend near-record highs, due to fears of losing market share as wellreversed this quarter, with 55.6% of deals announced being as pressure from local governments to maintain economiccross-border, with the acquirer and target headquartered in growth and employment levels. In western China, large-scaledifferent countries. One driver of this change is the significant aluminum projects continue to advance, supported by thedecline in deals in China. Historically, this country has been Chinese government’s strategy of boosting economic growthresponsible for a large proportion of each quarter’s volume, and employment in rural regions.predominantly through smaller deals (those valued at $50million–$250 million), with the majority considered local Given the current environment, we don’t see the situationmarket (within the People’s Republic of China and Hong turning around quickly. Until prices stabilize and supplyKong). But Chinese deal activity declined from nine in the begins to match demand, there is little incentive forsecond quarter to only three in the third quarter. companies to commit to acquisitions, with the concomitant increase in capacity that such deals typically entail. ShouldThe Asia and Oceania region was responsible for a activity remain steady for the fourth quarter—that is, if we dosignificant portion of deal value in the third quarter, not see a further contraction in the deal environment—wedriven by 10 local deals valued at a total of more than could see a year-over-year decline in value of as much as 50%,$1.5 billion. As 2012 progresses, it is becoming compared to 2011.increasingly clear that economic growth in China isslowing more than had been anticipated, and there hasbeen no evidence of the expected increase in activity.2 PwC
  4. 4. CommentaryQuarterly metals deal activityMeasured by number and value of deals worth $50 million or more (4Q09—3Q12) 2009 2010 2011 2012 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Number of deals 39 25 25 33 25 29 41 24 34 33 20 18 Total deal value ($ billions) 10.7 7.5 18.0 17.2 13.8 23.9 8.9 9.1 15.7 19.9 8.9 3.8 Average deal value ($ billions) 0.3 0.3 0.7 0.5 0.6 0.8 0.2 0.4 0.5 0.6 0.4 0.2Deal activity by number of deals Deal activity by total deal valueMeasured by announced deals worth $50 million or more Measured by announced deals worth $50 million or more 140 80 120 13 60 100Number of deals 4.6 49 US $ billions 80 1 40 26.3 0.3 60 40 42 66 20 24.8 20 26.8 29 13 3.2 7.8 0.6 0 5 0 2011 2012YTD 3Q12 2011 2012YTD 3Q12 (128 total deals) (72 total deals) (18 total deals) ($57.7 billion ($32.9 billion ($3.8 billion total deal value) total deal value) total deal value) Withdrawn Pending, unconditional, or intended Withdrawn Completed or partially completed Pending, unconditional, or intended CompletedForging ahead 3
  5. 5. US vs. non-US acquirers of US tartgets Deal value declines for third consecutiveMeasured by value of announced deals worth $50 million or more quarter The decrease in both deal volume and deal value may not be surprising, given the softness in global commodity prices10 and lingering concerns about the economy that appear to be 2 keeping many acquirers on the sidelines. And the lowered projections for China’s GDP, from 8.5% to 7.7% for 2012, 8 has significant implications for metals deals because the consolidation of Chinese metals producers has historically 6 2 been a major driver of activity. At the same time, the potential for US recession and eurozone sovereign debt concerns are having an impact on deal activity, as acquirers 4 wait to see how these problems will be resolved. 2 8 No US targets acquired; Chinese activity 14 5 6 declines substantially 0 2011 2012YTD 3Q12 In the third quarter, US targets were absent from the deal environment. Possible reasons for this include a stronger US dollar, which makes US targets relatively more expensive. Non-US acquirer Also, concerns about the general slowdown in the US econo- my may be making potential acquirers of US assets hesitant to US acquirer commit until the entire scenario has played out. Recently, local market deals comprised a significant portion of deal activity. However, in the third quarter, this trendCross-border vs. local-market deals reversed, with 55.6% of deals announced being cross-borderMeasured by value of announced deals worth $50 million or more (that is, the acquirer and target were headquartered in separate countries). One driver of this change is the signifi- cant decline in Chinese deals (targets and acquirers). Histori- cally, China has been responsible for a large proportion of100% each quarter’s deal volume, predominantly smaller deals (deals valued at $50 million to $250 million) and the major- 80% ity of these deals were considered local-market (within 44.4% People’s Republic of China and Hong Kong). Chinese deal 61.7% 63.9% activity declined from nine in the second quarter to only four 60% in the third quarter. These deals were indicative of the Chinese government’s stated goal to consolidate its steel 40% industry to successfully compete on a global scale; however, the government has shifted gears and is now engaged in 55.6% production of domestic goods and raising the standard of 20% 38.3% living in its rural regions. Driven by its slowing economy, it 36.1% appears that consolidation of China’s metal industry has begun to slow as well, at least in the near term. 0% 2011 2012YTD 3Q12 All local-market All cross-border4 PwC
  6. 6. Financial investor activity continues Financial leverageto decline Measured by average of top 50 global public competitorsA review of the top 50 publicly traded global metals compa-nies reveals that they have continued to increase their cash $1.6balances. At the same time, their debt to capital continues to $1.4decline (falling 420 basis points in the last two years). Thesemetrics indicate that potential metals acquirers are becoming $1.2financially stronger over the long term. $1.0 13.8%Deals identified as divestitures substantially decreased this $0.8quarter, falling by more than 68%. One possible reason for 11.7% $0.6this decline is a lack of buyers. Given the current economic 9.6%uncertainty (e.g., the Chinese economic slowdown, the $0.4current “double-dip” recession in Europe), companies may $0.2find it more prudent to hold onto cash balances, ratherthan risk them in acquisitions that have already proven $0.0unprofitable or underperforming for their current owners. Two quarters ago One year ago Most recent quarterStock swaps, which allow a company to acquire the assets ofanother company while maintaining cash balances and debt Total debt/total capital (left axis)levels, increased again this quarter as a percentage of deal Cash and equivalents $ billions (right axis)activity. Some equity markets are performing relatively wellthis year, which allows stock to become a more highly valuedform of “currency” for financing deals. Swaps also allow Aquisition characteristicscompanies to maintain their current liquidity positions while Measured by percentage of deals worth $50 million or morereaping the expected synergies of the acquisitions. 45% 40% 38.9% 35% 37.5% 30% 25% 20% 15% 16.7% 10% 5% 7.8% 7.8% 11.1% 11.1% 5.5% 5.5% 0% 2011 2012YTD 3Q12 Divestiture Stock swap Tender offerForging ahead 5
  7. 7. Deals by investor group At the same time that deals overall are in decline, financialMeasured by percentage of deals worth $50 million or more investments also continued to decline as a percentage of all deals in the third quarter, indicating that financial investors are hesitant about entering into deals. In the third quarter, for example, the total value for all financialvalue in data labels in $ billions) 7.3 0.7% of deal value (absolute deal 16.4 80% investors combined was only $717.5 million. One reason for this reduction in activity is the relatively short time horizon that these companies operate within; in the 60% current economy, quick returns on investment are more problematic than they would be in periods of robust 3.1 40% economic activity. 25.6 41.3 20% 0% 2011 2012YTD 3Q12 Financial investors Strategic investors Mega-deals in 2011 (value of $1 billion or more) Value of Month Target Acquirer transaction announced Target name nation Acquirer name nation Status in US$ bil. Category Feb Sumitomo Metal Japan Nippon Steel Corp Japan Pending 9.43 Steel Industries Ltd Jan Consolidated Thompson Canada Cliffs Natural Resources Inc United Completed 4.36 Iron ore Iron Mines Ltd States Nov Hebei Shougang Qianan China Beijing Shougang Co Ltd China Pending 2.95 Steel Iron&Steel Co Ltd Nov Usinas Siderurgicas Brazil Investor Group Argentina Completed 2.82 Steel de Minas Gerais SA{Usiminas} Jan Elkem AS Norway China National China Completed 2.18 Aluminum Bluestar(Group) Co Ltd Mar Cia Brasileira de Brazil Investor Group Japan Pending 1.95 Other Metalurgia e Mineracao{CBMM} Sep Cia Brasileira de Brazil China Niobium Investment China Completed 1.95 Other Metalurgia e Holding Co Mineracao{CBMM} Nov Commercial Metals Co United Icahn Enterprises LP United Withdrawn 1.56 Steel States States Mar Severstal North America United The Renco Group Inc United Completed 1.19 Steel Warren Wheeling Ops States States Jul Sundance Resources Ltd Australia Hanlong Mining Investment Australia Pending 1.11 Iron ore Pty Ltd6 PwC
  8. 8. Mega-deals in 1H12 (value of $1 billion or more) Value of Month Target Acquirer transaction announced Target name nation Acquirer name nation Status in US$ bil. Category Feb Sterlite Industries(India) India Volcan Investments Ltd India Pending 3.91 Other Ltd Mar ThyssenKrupp AG- Germany Outokumpu Oyj Finland Pending 3.53 Steel Inoxum Stainless Business Area May Roy Hill Holdings Pty Ltd Australia Investor Group South Korea Pending 3.31 Iron ore Jan Chongong Iron & China Chongqing Iron & Steel Co Ltd China Pending 2.80 Steel Steel Group Mar First Quantum Minerals Dem Rep Eurasian Natural Resources United Completed 1.25 Iron ore Ltd- Residual Assets & Congo Corp PLC Kingdom Claims Feb Eramet SA France France France Completed 1.03 Other Jan Baoshan Iron & Steel Co China Baosteel Group Corp China Pending 1.02 Steel Ltd-Stainless Steel BusinessNo mega-deal activity in third quarterThere were no mega-deals (deals valued at $1 billion or more) announced in the third quarter, and only two valued at morethan $500 million.The first deal valued at greater than $500 million, announced in July, was Swiss trading company Prominvest’s $641.5 millionbid for Australia-based Northern Iron Ltd. Northern Iron owns the Sydvaranger iron ore mine in northern Norway.The second deal, valued at $529 million, was announced in August. In this deal, Furukawa Sky Aluminum (a subsidiary ofFurukawa Electric) and Sumitomo Light Metal Industries announced that they plan to merge. Furukawa Sky is Japan’s topaluminum producer and Sumitomo Light Metal is Japan’s second largest. The two companies plan to integrate on October 1,2013, subject to approval from regulators. The combined operations of the new company will have an annual output capacityof roughly 1.2 million tons of aluminum sheet.Given the current economic uncertainties in the developed economies, combined with a slowdown in emerging regions suchas China and India, it is unlikely that we will see a rebound in mega-deals this year. Companies are unlikely to commit largeinvestments, given the low commodity pricing and overcapacity already evident.Forging ahead 7
  9. 9. Asia and Oceania leads local volume and Europe, however, was the primary driver for outbound dealvalue, outbound volume value in the third quarter. The deal, announced in July, was Swiss trading company Prominvest’s $641.5 million bid forThe Asia and Oceania region was responsible for a significant Australia-based Northern Iron Ltd, as mentioned earlier. Theportion of deal value in the third quarter, driven by 10 local decline in value of the euro, combined with recent economicdeals valued at more than $1.5 billion. Surprisingly, China turmoil (six of the eurozone economies have fallen back intowas responsible for only three of these deals, an indication recession since 4Q11, for example) may make acquisitions inof its cooling economy, while Japan also had three deals. this region relatively more attractive.Australia’s three deals during the quarter is indicative of itsimportance to the metals sector. It should also be noted North America also had moderate outbound deal value,that Asian emerging markets (e.g., India, Philippines) are capitalizing on the relatively strong US dollar, which canrelatively fragmented, which may contribute to deal flow make offshore acquisitions particularly attractive on a perfrom this region. Asia and Oceania also drove outbound deal deal basis.volume; with three deals valued at $0.47 billion, and sawinbound deal value of $0.96 billion.Global metals M&A activityMeasured by number and value of deals worth $50 million or more (3Q12) Europe Local—2 deals, $0.52 billion Inbound—1 deal, $0.07 billion Outbound—1 deal, $0.64 billion North America Local—0 deals Inbound—1 deal, $0.31 billion Outbound—2 deals, $0.62 billion Asia & Oceania Local—10 deals, $1.59 billion Inbound—2 deals, $0.96 billion Outbound—3 deals, $0.47 billion South America Local—0 deals Outbound—2 deals, $0.39 billion Outbound—0 deals8 PwC
  10. 10. Regional distribution of deals by target region* Regional distribution of deals by target region*Measured by number of deals worth $50 million or more (3Q12) Measured by value of deals worth $50 million or more (3Q12) 16.7% 15.4% 10.2% 11.1% 5.6% 8.0% 66.7% 66.4%Regional distribution of deals by acquirer region* Regional distribution of deals by acquirer region*Measured by number of deals worth $50 million or more (3Q12) Measured by value of deals worth $50 million or more (3Q12) 16.7% 20.9% 11.1% 9.4% 53.6% 5.6% 66.7% 16.1% Asia & Oceania North America South America Europe ex-UK & Eurozone UK & Eurozone* Percentages may not total 100% due to rounding.Forging ahead 9
  11. 11. Acquirers from advanced versus emerging and Acquirers from advanced economiesdeveloping economiesMeasured by number of deals worth $50 million or more continue to drive activity In the third quarter, acquirers from advanced economies continued to account for the majority of deals valued at100% $50 million or more, with more than 61% of all deals valued at least at $50 million. Increased acquisitions from these regions offer companies a number of opportunities80% 38.9% for growth that might not be available from a strictly 45.3% 48.6% organic growth strategy. Possibilities include enhanced access to raw materials, entrance into new markets, and60% the creation of larger economies of scale. Also, companies from advanced economies tend to be larger (on average),40% better capitalized, and with better access to lower-cost capital markets, which makes financing acquisitions less 61.1% 54.7% 51.4% burdensome.20% 0% 2011 2012YTD 3Q12 Emerging and developing Advanced10 PwC
  12. 12. Steel continues to drive deal value Deals by target metal category Measured by value of deals worth $50 million or more (2012YTD)PwC segments the metals sector into four categories bycomparing standard industrial classification (SIC) codesto our internal classification system. Based on this process,we group deals (measured by number) into four product 100%segments: 90% 1.1 7.3 5.9 value in data labels in $ billions)• Steel % of deal value (absolute deal 80% 1.4• Aluminum 70% 7.2 0.6 5.8• Iron ore 60% 2.4• Other 50% 1.8 0.3 40%During the third quarter of 2012, targets classified as steel 30% 4.7manufacturers continued to drive activity in the metals 20% 16.0 11.3deal environment. One key factor driving mergers andacquisitions activity is that steel companies continuously 10%look for additional cost-saving opportunities in order to 0%remain competitive, and lower steelmaking margins Total Completed Pending Withdrawn or intendedaccelerate this tendency. Also, the Asian steel industryis relatively fragmented, compared with productionin Europe and North America, which leads to more Other Aluminumconsolidation within emerging markets, particularly Iron ore Steelin China and India. Deals by target metal category* Measured by value of deals worth $50 million or more (3Q12) 100% 0.1 0.1 90% value in data labels in $ billions) % of deal value (absolute deal 80% 1.1 1.4 0.3 70% 60% 0.5 0.5 50% 40% 30% 1.8 0.3 1.5 20% 10% 0% Total Completed Pending or intended Withdrawn Other Aluminum Iron ore SteelForging ahead 11
  13. 13. PwC’s expertise in the metals sectorDeep metals experience Quality deal professionalsPwC’s Metals practice serves ferrous and nonferrous primary With more than 6,500 dedicated deal professionalsand secondary metals producers through a network of more worldwide, PwC’s Deals practice has industry andthan 1,000 professionals strategically located around the functional experience to advise our clients on variousworld. Central to the successful delivery of our services is an factors that could affect a transaction, including market,in-depth understanding of today’s industry issues, in addition financial accounting, tax, human resources, operating, IT,to our wealth of specialized resources that help in solving and supply chain considerations. Teamed with our Metalscomplex business challenges. practice, our Deals professionals can bring a unique perspective to your deal, addressing it from a technicalOur highly skilled team encourages dialogue about trends aspect as well as from an industry point of view.and issues through participation in industry conferences andassociations, such as the American Iron and Steel Institute,as well as through industry-focused publications and Web Global connectionforums. To address your industry needs wherever they arise,our professionals are concentrated in areas where the metals In addition to the more than 1,000 professionals whoindustry operates today and in the emerging markets where serve the metals industry, our team is part of an expansiveit will likely operate in the future. Industrial Products group that consists of more than 32,000 professionals, including approximately 17,000 providing assurance services, 8,300 providing tax services, and 7,000 providing advisory services. This expands our global footprint and enables us to concentrate our efforts in bringing clients a greater depth of talent, resources, and know-how in the most effective and timely way. Europe 12,700 Industrial Products professionals 315 Metals industry professionals North America 5,700 Industrial Products professionals Asia 225 Metals industry professionals 9,000 Industrial Products professionals 195 Metals industry professionals Middle East & Africa 1,360 Industrial Products professionals 46 Metals industry professionals South America 1,960 Industrial Products professionals Australia & Pacific Islands 155 Metals industry professionals 1,000 Industrial Products professionals 70 Metals industry professionals12 PwC
  14. 14. ContactsPwC Global Metals practicePwC’s Metals practice provides industry-focused assurance, tax, and advisory services. Through our global network, we candraw upon the in-depth industry experience of specialists in every country in which your company operates.US Metals Industry Leader Global Metals LeaderSean Hoover—+1.412.355.8087 Jim Forbes— Metals Tax Leader US Industrial Products LeaderMike Tomera—+1.412.355.6095 Robert McCutcheon— Metals Advisory Leader US Industrial Products Senior ManagerJeff Herrmann—+1.216.825.3116 Jennifer Flunker— Metals Deals Director US Metals Lead AnalystJoaquin Oliveras—+1.646.471.0926 Sean Gaffney— Metals Client Service AdvisorDaniel Webster— Global Deals practicePwC’s Deals practice offers a full range of tax, financial, business assurance, and advisory capabilities covering acquisitions,disposals, private equity, strategic M&A advice, advice on listed company transactions, financing, and public-privatepartnerships.US Deals, Assurance US Deals LeaderBrian Vickrey—+1.312.298.2930 Martyn Curragh— Deals, Tax Europe Deals LeaderMichael Kliegman—+1.646.471.8213 Phillippe Degonzague— Deals, Merger Integration Asia-Pacific Deals LeaderDavid Limberg—+1.216.875.3506 Chao Choon Ong— Deals LeaderJohn Dwyer— Corporate Finance global networkFor Corporate Finance services in the United States, For Corporate Finance services outside the United States,please contact: please contact:US Industrial Products Corporate Finance Leader Global Corporate Finance LeaderPricewaterhouseCoopers Corporate Finance LLC Chris Hemmings—+44.20.780.45703Robert Ashcroft—+1.312.298.2364 ahead 13
  15. 15. MethodologyForging ahead is an analysis of merger and acquisition activity been completed), or withdrawn. The term deal, whenin the global metals industry. Deal information was sourced referenced herein, refers to transactions with a disclosedfrom Thomson Reuters and includes deals for targets with value of at least $50 million, unless otherwise noted.primary SIC codes that fall into one of the following industrygroups: iron ores; ferroalloy ores, except vanadium; steel Regional categories used in this report approximateworks, blast furnaces, rolling mills, and finishing mills; United Nations (UN) regional groups, as determined byiron and steel foundries; primary smelting and refining/ the UN Statistics Division, with the exception of the Northnonferrous; secondary smelting and refining/nonferrous; America region (includes North America, Latin America,rolling, drawing, and extruding/nonferrous; nonferrous and the Caribbean UN groups), the Asia and Oceaniafoundries; miscellaneous primary metals products; and region (includes Asia and Oceania UN groups), andmetals service centers and offices. Balance sheet data was Europe (divided into United Kingdom and Eurozonesourced from public company reports. and Europe ex-UK and Eurozone regions). International Monetary Fund classifications were used to labelThis analysis includes all individual mergers and economies as advanced or developing and emerging.acquisitions for disclosed or undisclosed values, leveraged Overseas territories were included in the region of thebuyouts, privatizations, minority stake purchases, and parent country. China, when referenced separately,acquisitions of remaining interest announced between includes Hong Kong.January 1, 2011, and September 30, 2012, with a status ofcompleted, intended, partially completed, pending, pending Competing deals, not just the ultimate successful dealregulatory approval, unconditional (i.e., initial conditions partner, were included in the data set used throughoutset forth by the acquirer have been met but deal has not the document.Visit our metals industry website© 2012 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” and “PwC” refer to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, or, as the context requires, thePricewaterhouseCoopers global network or other member firms of the network, each of which is a separate legal entity. This document is for general information purposes only, and should not be used as asubstitute for consultation with professional advisors. MW-13-0096 kd