31 May, 2023
Apollo deal sends PE investment in metals and mining soaring in Q2
By Muhammad Hammad Asif and Annie Sabater
Global private equity investments in metals and mining surged during the second quarter to $4.69 billion across 12 deals, driven by the largest transaction in the sector in 15 years.
A proposed $4.57 billion buyout of aluminum producer Arconic Corp. by an investor group including Apollo Global Management Inc. and Irenic Capital Management LP accounted for nearly 97% of the total during the quarter, according to S&P Global Market Intelligence data.
The Apollo deal was second only to the largest-ever private equity transaction in the sector, which was in 2008 when Russian private equity firm Interros Co. bought 16.66% of nickel producer PJSC Mining and Metallurgical Co. Norilsk Nickel.
Arconic's go-private deal is expected to close in the second half of 2023, subject to shareholder approval and regulatory clearances. Under the terms of the deal, Arconic stockholders will receive $30 per share in cash. Irenic will own a minority stake in the company.
Apollo plans to invest significant capital in Arconic to secure the company's market edge, with focus on upgrades to technology and key machine centers.
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Year to date, the metals and mining industry pulled in $5.33 billion across 40 deals, more than twice the 2022 gross deal value of $2.47 billion across 120 deals.
From Jan. 1 to May 26, North America was the largest recipient of investment in the sector, at $4.99 billion. Investment in Asia-Pacific followed with $190.1 million.
Other major deals
A $300 million funding round for steel manufacturer Boston Electrometallurgical Corp. marks the second-largest transaction thus far in 2023. Investors in the round include venture capital firms BMW i Ventures Inc. and M12.
Excluding the big Arconic acquisition, only three of the recorded deals for the year to May 26 were valued at more than $100 million.
