Mining Acquisitions on the Horizon
Mining companies are making acquisitions to prepare for the shift to green energy. On October 20th, BHP Group proposed a $339 million offer to acquire Canadian nickel manufacturer Noront Resources. The proposal follows BHP’s $5.8 billion takeover offer to acquire copper mining company O.Z. Minerals Ltd back in August. Global legislation demanding emission cuts and green-energy transitions have fueled considerable acquisition interest in miners of key battery metals.1
U.S. Gas Prices Drop, For Now
The average U.S. gas price per gallon was $3.83 as of late September 2022, following 14 weeks of falling prices from its peak of $5.11 in June 2022. In response to falling crude oil prices, OPEC+ plans to cut oil production by 2 million barrels daily. The U.S. administration continues to release oil from its Strategic Petroleum Reserve to help lower costs. Gas prices still average 49.3 cents per gallon, higher than in September 2021.2 3
U.S. Manufacturing Activity Falling
The Institute of Supply Management reported that its manufacturing PMI had fallen to 50.9 in September 2022, its lowest reading since May 2020. Rising interest rates are expected to have slowed purchases of appliances, furniture, and other large household goods. Inflation has also contributed to the cooling demand for goods. Machinery, Transportation Equipment, Food, Beverage & Tobacco, and Computer & Electronic products still registered moderate-to-strong growth in September.4
Climate Treaty Amendment Would Boost U.S. Chemical Exports
The U.S. Senate voted in September to ratify an amendment to the Montreal Protocol Treaty of 1987. This industry-backed climate treaty would decrease the production of hydrofluorocarbons commonly used in air conditioners and household appliances. U.S. chemical manufacturers have spent billions developing alternative refrigerants that are less harmful to the environment and have higher demand in overseas markets. The amendment would help transition their sales to these products, increasing U.S. exports by $5 billion.5
Metal Executives Less Optimistic About Market Rebound
As rising inflation and supply chain struggles persist, steel and aluminum prices have fallen by 45% and 18% in 2022, respectively. U.S. Steel forecasts their Q3 earnings will be 10% lower than Wall Street estimates, Nucor Corp warned of steel shipment totals being reduced in Q3, and Alcoa has warned investors of a drop in earnings. The companies reference high costs of raw materials, energy prices, and reduced demand as reasons for their eroding earnings.6
Largest Transactions Closed
- Welbilt, Inc.
- Ali Group S.r.l.
- Meritor, Inc.
- Cummins Inc.
- Neenah, Inc.
- Mativ Holdings, Inc.
- The Burke Porter Group of brands
- AEA Investors LP
- Coastal Plywood Company
- Boise Cascade Wood Products, L.L.C.
- Gulf Tanks Holdings, Inc.
- Kinderhook Industries, LLC
- Bevcorp LLC
- John Bean Technologies Corporation
- UI Acquisition Holding Co.
- Delta International Holding Limited
- RoboVent, Inc.
- Nederman Holding AB (publ)
- MFT-CKF, Inc.
- CKF Inc.
Other Financial Buyer Transactions Closed
- The Southern Co., Inc.
- Rosewood Private Investments
- Proctor Sales Inc.
- AH Equity Investments
- Component Sourcing International, LLC
- CPC Management LLC
- Rapid Pump & Meter Service Co., Inc.
- Hidden Harbor Capital Partners, LLC
Other Strategic Buyer Transactions Closed
- Southern Fasteners & Supply, LLC
- Park-Ohio Holdings Corp.
- Smith Engineering, Inc.
- Evoqua Water Technologies Corp.
- Assets of Calvert Company, Inc.
- Western Forest Products Inc.
- Plastic Industries, Inc.
- Altium Packaging, LLC
- All of the business and operating assets of FormTex Plastics Corporation
- good natured Products Inc.
- Assets of Lion Truck Body
- GreenPower Motor Company Inc.
- Enviro Technologies U.S., Inc.
- Enviro Technologies U.S., Inc.
- Assets of Magnetic Lifting Technologies US
- Crane 1 Services Inc.
This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.
EBIT - Earnings Before Interest and Taxes