Forging aheadThird-quarter 2012 global metals industry mergers and acquisitions analysis

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Forging ahead 1

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 fi nd 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 “fi scal 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, 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 for 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 ForbesUS Metals Leader Global Metals Leader

Sean Hoover

Jim Forbes

2 PwC

Perspective:Thoughts on deal activity in the third quarter of 2012

The global economic outlook continues to be of concern, particularly in the advanced economies. Since the beginning of the year, six eurozone countries have fallen back into recession and sovereign debt issues remain, while in the United States, concerns about the “fi scal cliff” and the resulting return to recession concern investors. The emerging markets are seeing slower growth, as well: China’s gross domestic product estimate for 2012 was cut by the Asia Development Bank from 8.5% to 7.7%, while India’s was cut from 7.0% to 5.6%.

Despite these economic issues, liquidity remains strong for many metals producers. We’ve seen an increase in cash balances over the past two years, and debt-to-capital levels continue to decline. Normally, we would expect to see an increase in activity, given that these metrics indicate that potential acquirers have become better capitalized over the long term. However, in the current economic environment, it does appear that these acquirers may be waiting for improvements in pricing or demand.

The absence of deals involving US targets in the third quarter may be attributable to the stronger US dollar, which makes US targets more expensive, on a relative scale, to offshore acquirers. Also, concerns about budget woes and the possible return to recession may be causing potential acquirers of US assets to wait until the situation is stabilized.

Until the third quarter, local market deals accounted for a signifi cant portion of deal activity. However, the trend reversed this quarter, with 55.6% of deals announced being cross-border, with the acquirer and target headquartered in different countries. One driver of this change is the signifi cant decline in deals in China. Historically, this country has been responsible for a large proportion of each quarter’s volume, predominantly through smaller deals (those valued at $50 million–$250 million), with the majority considered local market (within the People’s Republic of China and Hong Kong). But Chinese deal activity declined from nine in the second quarter to only three in the third quarter.

The Asia and Oceania region was responsible for a signifi cant portion of deal value in the third quarter, driven by 10 local deals valued at a total of more than $1.5 billion. As 2012 progresses, it is becoming increasingly clear that economic growth in China is slowing more than had been anticipated, and there has been no evidence of the expected increase in activity.

Given the continued decline in the deal environment this quarter, the outlook for the near term remains uncertain. In addition to concerns about the economy, there are other issues that may cause investors to postpone deals as they wait for conditions to improve.

Commodities pricing remains in decline, and prices for base metals are generally expected to continue to fall through the balance of 2012, according to AME Group. The average London Metal Exchange (LME) aluminum spot price for August fell almost 2%, and since January, the monthly average prices are down more than 15%. However, aluminum prices have surged nearly $400 per ton in recent weeks as European and US central banks have announced plans to stimulate their economies. Despite this improvement, however, prices are still well below those of the beginning of the year. For steel, the situation is not much better: the world composite carbon steel price fell 0.5% in August, down more than 7.2% since the beginning of the year.

Overcapacity also remains a problem, as new capacity continues to come online from developing and emerging economies. Huangguoshu Aluminum, for instance, has said that the expansion project at the Anshun Huangguoshu smelter is under way, with production expected to have begun in October 2012. Also, despite sluggish demand, Chinese steel mills have not responded to market signals of falling steel prices and have maintained production levels at near-record highs, due to fears of losing market share as well as pressure from local governments to maintain economic growth and employment levels. In western China, large-scale aluminum projects continue to advance, supported by the Chinese government’s strategy of boosting economic growth and employment in rural regions.

Given the current environment, we don’t see the situation turning around quickly. Until prices stabilize and supply begins to match demand, there is little incentive for companies to commit to acquisitions, with the concomitant increase in capacity that such deals typically entail. Should activity remain steady for the fourth quarter—that is, if we do not see a further contraction in the deal environment—we could see a year-over-year decline in value of as much as 50%, compared to 2011.

Forging ahead 3

Commentary

Deal activity by number of dealsMeasured by announced deals worth $50 million or more

Quarterly 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 0.2

Deal activity by total deal valueMeasured by announced deals worth $50 million or more

0

20

40

60

80

100

120

140

Completed or partially completed

Pending, unconditional, or intended

Withdrawn

2011(128 total deals)

2012YTD(72 total deals)

3Q12(18 total deals)

29

66

13

5

42

Num

ber

of d

eals

49

13

1

0

20

40

60

80

Completed

Pending, unconditional, or intended

Withdrawn

2011($57.7 billion

total deal value)

2012YTD($32.9 billion

total deal value)

3Q12($3.8 billion

total deal value)

7.8

26.8

0.6

24.8

0.3

4.6

US

$ b

illio

ns

26.3

3.2

4 PwC

Deal value declines for third consecutive quarter

The decrease in both deal volume and deal value may not be surprising, given the softness in global commodity prices and lingering concerns about the economy that appear to be keeping many acquirers on the sidelines. And the lowered projections for China’s GDP, from 8.5% to 7.7% for 2012, has signifi cant implications for metals deals because the consolidation of Chinese metals producers has historically 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 wait to see how these problems will be resolved.

No US targets acquired; Chinese activity declines substantially

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. Also, concerns about the general slowdown in the US econo-my may be making potential acquirers of US assets hesitant to commit until the entire scenario has played out.

Recently, local market deals comprised a signifi cant portion of deal activity. However, in the third quarter, this trend reversed, with 55.6% of deals announced being cross-border (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 of each quarter’s deal volume, predominantly smaller deals (deals valued at $50 million to $250 million) and the major-ity of these deals were considered local-market (within People’s Republic of China and Hong Kong). Chinese deal activity declined from nine in the second quarter to only four in the third quarter. These deals were indicative of the Chinese government’s stated goal to consolidate its steel industry to successfully compete on a global scale; however, the government has shifted gears and is now engaged in production of domestic goods and raising the standard of living in its rural regions. Driven by its slowing economy, it appears that consolidation of China’s metal industry has begun to slow as well, at least in the near term.

US vs. non-US acquirers of US tartgetsMeasured by value of announced deals worth $50 million or more

Cross-border vs. local-market dealsMeasured by value of announced deals worth $50 million or more

0

2

4

6

8

10

US acquirer

Non-US acquirer

2011 2012YTD 3Q12

5

8

6

2

2

14

0%

20%

40%

60%

80%

100%

All local-market

All cross-border

2011 2012YTD 3Q12

63.9%

36.1%

61.7%

55.6%38.3%

44.4%

Forging ahead 5

Financial investor activity continues to decline

A review of the top 50 publicly traded global metals compa-nies reveals that they have continued to increase their cash balances. At the same time, their debt to capital continues to decline (falling 420 basis points in the last two years). These metrics indicate that potential metals acquirers are becoming fi nancially stronger over the long term.

Deals identifi ed as divestitures substantially decreased this quarter, falling by more than 68%. One possible reason for this decline is a lack of buyers. Given the current economic uncertainty (e.g., the Chinese economic slowdown, the current “double-dip” recession in Europe), companies may fi nd it more prudent to hold onto cash balances, rather than risk them in acquisitions that have already proven unprofi table or underperforming for their current owners.

Stock swaps, which allow a company to acquire the assets of another company while maintaining cash balances and debt levels, increased again this quarter as a percentage of deal activity. Some equity markets are performing relatively well this year, which allows stock to become a more highly valued form of “currency” for fi nancing deals. Swaps also allow companies to maintain their current liquidity positions while reaping the expected synergies of the acquisitions.

Financial leverageMeasured by average of top 50 global public competitors

Aquisition characteristicsMeasured by percentage of deals worth $50 million or more

One year agoTwo quarters ago Most recent quarter$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

Total debt/total capital (left axis)

Cash and equivalents $ billions (right axis)

13.8%

11.7%

9.6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

3Q122012YTD2011

Stock swap

Tender offer

Divestiture

37.5%

7.8% 7.8%5.5%

11.1%

16.7%

5.5%

38.9%

11.1%

6 PwC

Mega-deals in 2011 (value of $1 billion or more)

Monthannounced Target name

Target nation Acquirer name

Acquirernation Status

Value oftransactionin US$ bil. Category

Feb Sumitomo Metal Industries Ltd

Japan Nippon Steel Corp Japan Pending 9.43 Steel

Jan Consolidated Thompson Iron Mines Ltd

Canada Cliffs Natural Resources Inc United States

Completed 4.36 Iron ore

Nov Hebei Shougang Qian'an Iron&Steel Co Ltd

China Beijing Shougang Co Ltd China Pending 2.95 Steel

Nov Usinas Siderurgicas de Minas Gerais SA{Usiminas}

Brazil Investor Group Argentina Completed 2.82 Steel

Jan Elkem AS Norway China National Bluestar(Group) Co Ltd

China Completed 2.18 Aluminum

Mar Cia Brasileira de Metalurgia e Mineracao{CBMM}

Brazil Investor Group Japan Pending 1.95 Other

Sep Cia Brasileira de Metalurgia e Mineracao{CBMM}

Brazil China Niobium Investment Holding Co

China Completed 1.95 Other

Nov Commercial Metals Co United States

Icahn Enterprises LP United States

Withdrawn 1.56 Steel

Mar Severstal North America Warren Wheeling Ops

United States

The Renco Group Inc United States

Completed 1.19 Steel

Jul Sundance Resources Ltd Australia Hanlong Mining Investment Pty Ltd

Australia Pending 1.11 Iron ore

Deals by investor groupMeasured by percentage of deals worth $50 million or more

At the same time that deals overall are in decline, fi nancial investments also continued to decline as a percentage of all deals in the third quarter, indicating that fi nancial investors are hesitant about entering into deals. In the third quarter, for example, the total value for all fi nancial 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 current economy, quick returns on investment are more problematic than they would be in periods of robust economic activity.

0%

20%

40%

60%

80%

Strategic investors

Financial investors

2011 2012YTD 3Q12

7.3

25.6

16.4

3.1

% o

f dea

l val

ue (a

bso

lute

dea

l va

lue

in d

ata

lab

els

in $

bill

ions

)

41.3

0.7

Forging ahead 7

Mega-deals in 1H12 (value of $1 billion or more)

Monthannounced Target name

Target nation Acquirer name

Acquirernation Status

Value oftransactionin US$ bil. Category

Feb Sterlite Industries(India)Ltd

India Volcan Investments Ltd India Pending 3.91 Other

Mar ThyssenKrupp AG-Inoxum Stainless Business Area

Germany Outokumpu Oyj Finland Pending 3.53 Steel

May Roy Hill Holdings Pty Ltd Australia Investor Group South Korea Pending 3.31 Iron ore

Jan Chongong Iron & Steel Group

China Chongqing Iron & Steel Co Ltd China Pending 2.80 Steel

Mar First Quantum Minerals Ltd- Residual Assets & Claims

Dem Rep Congo

Eurasian Natural Resources Corp PLC

United Kingdom

Completed 1.25 Iron ore

Feb Eramet SA France France France Completed 1.03 Other

Jan Baoshan Iron & Steel Co Ltd-Stainless Steel Business

China Baosteel Group Corp China Pending 1.02 Steel

No mega-deal activity in third quarter

There were no mega-deals (deals valued at $1 billion or more) announced in the third quarter, and only two valued at more than $500 million.

The fi rst deal valued at greater than $500 million, announced in July, was Swiss trading company Prominvest’s $641.5 million bid 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 of Furukawa Electric) and Sumitomo Light Metal Industries announced that they plan to merge. Furukawa Sky is Japan’s top aluminum 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 capacity of roughly 1.2 million tons of aluminum sheet.

Given the current economic uncertainties in the developed economies, combined with a slowdown in emerging regions such as China and India, it is unlikely that we will see a rebound in mega-deals this year. Companies are unlikely to commit large investments, given the low commodity pricing and overcapacity already evident.

8 PwC

Asia and Oceania leads local volume and value, outbound volume

The Asia and Oceania region was responsible for a signifi cant portion of deal value in the third quarter, driven by 10 local deals valued at more than $1.5 billion. Surprisingly, China was responsible for only three of these deals, an indication of its cooling economy, while Japan also had three deals. Australia’s three deals during the quarter is indicative of its importance to the metals sector. It should also be noted that Asian emerging markets (e.g., India, Philippines) are relatively fragmented, which may contribute to deal fl ow from this region. Asia and Oceania also drove outbound deal volume; with three deals valued at $0.47 billion, and saw inbound deal value of $0.96 billion.

Europe, however, was the primary driver for outbound deal value in the third quarter. The deal, announced in July, was Swiss trading company Prominvest’s $641.5 million bid for Australia-based Northern Iron Ltd, as mentioned earlier. The decline in value of the euro, combined with recent economic turmoil (six of the eurozone economies have fallen back into recession since 4Q11, for example) may make acquisitions in this region relatively more attractive.

North America also had moderate outbound deal value, capitalizing on the relatively strong US dollar, which can make offshore acquisitions particularly attractive on a per deal basis.

Global metals M&A activityMeasured by number and value of deals worth $50 million or more (3Q12)

North AmericaLocal—0 dealsInbound—1 deal, $0.31 billionOutbound—2 deals, $0.62 billion

EuropeLocal—2 deals, $0.52 billionInbound—1 deal, $0.07 billionOutbound—1 deal, $0.64 billion

Asia & OceaniaLocal—10 deals, $1.59 billionInbound—2 deals, $0.96 billionOutbound—3 deals, $0.47 billion

South AmericaLocal—0 dealsOutbound—2 deals, $0.39 billionOutbound—0 deals

Forging ahead 9

Regional distribution of deals by target region*Measured by number of deals worth $50 million or more (3Q12)

Regional distribution of deals by target region*Measured by value of deals worth $50 million or more (3Q12)

Regional distribution of deals by acquirer region*Measured by number of deals worth $50 million or more (3Q12)

Regional distribution of deals by acquirer region*Measured by value of deals worth $50 million or more (3Q12)

North America South America Europe ex-UK & EurozoneAsia & Oceania UK & Eurozone

66.7%

11.1%

16.7%

5.6%

66.7%

11.1%

16.7%

5.6%

53.6%9.4%

20.9%

16.1%

66.4%

10.2%

15.4%

8.0%

* Percentages may not total 100% due to rounding.

10 PwC

Acquirers from advanced versus emerging and developing economies Measured by number of deals worth $50 million or more

Acquirers from advanced economies continue to drive activity

In the third quarter, acquirers from advanced economies continued to account for the majority of deals valued at $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 opportunities for growth that might not be available from a strictly organic growth strategy. Possibilities include enhanced access to raw materials, entrance into new markets, and the creation of larger economies of scale. Also, companies from advanced economies tend to be larger (on average), better capitalized, and with better access to lower-cost capital markets, which makes fi nancing acquisitions less burdensome.

0%

20%

40%

60%

80%

100%

Advanced

Emerging and developing

2011 2012YTD 3Q12

48.6%

51.4%

45.3%

61.1%54.7%

38.9%

Forging ahead 11

Deals by target metal categoryMeasured by value of deals worth $50 million or more (2012YTD)

Deals by target metal category*Measured by value of deals worth $50 million or more (3Q12)

Steel continues to drive deal value

PwC segments the metals sector into four categories by comparing standard industrial classifi cation (SIC) codes to our internal classifi cation system. Based on this process, we group deals (measured by number) into four product segments:

• Steel

• Aluminum

• Iron ore

• Other

During the third quarter of 2012, targets classifi ed as steel manufacturers continued to drive activity in the metals deal environment. One key factor driving mergers and acquisitions activity is that steel companies continuously look for additional cost-saving opportunities in order to remain competitive, and lower steelmaking margins accelerate this tendency. Also, the Asian steel industry is relatively fragmented, compared with production in Europe and North America, which leads to more consolidation within emerging markets, particularly in China and India.

0.1

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

WithdrawnPending or intendedCompletedTotal

Steel

Aluminum

Iron ore

Other

0.3

0.3 1.5

0.5

1.4

0.5

% o

f dea

l val

ue (a

bso

lute

dea

l va

lue

in d

ata

lab

els

in $

bill

ions

)

1.8

0.1

1.1

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

WithdrawnPendingor intended

CompletedTotal

Steel

Aluminum

Iron ore

Other

1.1

4.7

0.6

1.4

11.3

5.8

5.9

1.8

7.3

7.2

2.4

% o

f dea

l val

ue (a

bso

lute

dea

l va

lue

in d

ata

lab

els

in $

bill

ions

)

16.0

0.3

12 PwC

PwC’s expertise in the metals sector

Deep metals experience

PwC’s Metals practice serves ferrous and nonferrous primary and secondary metals producers through a network of more than 1,000 professionals strategically located around the world. Central to the successful delivery of our services is an in-depth understanding of today’s industry issues, in addition to our wealth of specialized resources that help in solving complex business challenges.

Our highly skilled team encourages dialogue about trends and issues through participation in industry conferences and associations, such as the American Iron and Steel Institute, as well as through industry-focused publications and Web forums. To address your industry needs wherever they arise, our professionals are concentrated in areas where the metals industry operates today and in the emerging markets where it will likely operate in the future.

Quality deal professionals

With more than 6,500 dedicated deal professionals worldwide, PwC’s Deals practice has industry and functional experience to advise our clients on various factors that could affect a transaction, including market, fi nancial accounting, tax, human resources, operating, IT, and supply chain considerations. Teamed with our Metals practice, our Deals professionals can bring a unique perspective to your deal, addressing it from a technical aspect as well as from an industry point of view.

Global connection

In addition to the more than 1,000 professionals who serve the metals industry, our team is part of an expansive 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.

South America1,960 Industrial Products professionals155 Metals industry professionals

North America5,700 Industrial Products professionals225 Metals industry professionals

Europe12,700 Industrial Products professionals315 Metals industry professionals

Middle East & Africa1,360 Industrial Products professionals46 Metals industry professionals

Asia9,000 Industrial Products professionals195 Metals industry professionals

Australia & Pacifi c Islands1,000 Industrial Products professionals70 Metals industry professionals

Forging ahead 13

Contacts

PwC Global Deals practicePwC’s Deals practice offers a full range of tax, fi nancial, business assurance, and advisory capabilities covering acquisitions, disposals, private equity, strategic M&A advice, advice on listed company transactions, fi nancing, and public-private partnerships.

PwC Global Metals practice

PwC’s Metals practice provides industry-focused assurance, tax, and advisory services. Through our global network, we can draw upon the in-depth industry experience of specialists in every country in which your company operates.

US Metals Industry Leader Sean Hoover—+1.412.355.8087sean.t.hoover@us.pwc.com

US Metals Tax Leader Mike Tomera—+1.412.355.6095 michael.tomera@us.pwc.com

US Metals Advisory LeaderJeff Herrmann—+1.216.825.3116 jeff.herrmann@us.pwc.com

US Metals Deals Director Joaquin Oliveras—+1.646.471.0926 joaquin.oliveras@us.pwc.com

US Metals Client Service Advisor Daniel Webster—+1.412.355.7797 daniel.w.webster@us.pwc.com

Global Metals Leader Jim Forbes—+1.905.972.4105 jim.forbes@ca.pwc.com

US Industrial Products Leader Robert McCutcheon—+1.412.355.2935 robert.w.mccutcheon@us.pwc.com

US Industrial Products Senior Manager Jennifer Flunker—+1.614.227.3236 jennifer.fl unker@us.pwc.com

US Metals Lead Analyst Sean Gaffney—+1.216.875-3275 sean.gaffney@us.pwc.com

US Deals Leader Martyn Curragh—+1.646.471.2622martyn.curragh@us.pwc.com

Europe Deals Leader Phillippe Degonzague—+33.01.5657.1293phillippe.degonzague@fr.pwc.com

Asia-Pacifi c Deals Leader Chao Choon Ong—+65.6236.3018chao.choon@sg.pwc.com

US Deals, AssuranceBrian Vickrey—+1.312.298.2930brian.vickrey@us.pwc.com

US Deals, TaxMichael Kliegman—+1.646.471.8213michael.kliegman@us.pwc.com

US Deals, Merger IntegrationDavid Limberg—+1.216.875.3506 phillippe.degonzague@fr.pwc.com

Global Deals LeaderJohn Dwyer—+44.20.721.31133john.p.dwyer@uk.pwc.com

PwC Corporate Finance global network

For Corporate Finance services in the United States, please contact:

US Industrial Products Corporate Finance LeaderPricewaterhouseCoopers Corporate Finance LLCRobert Ashcroft—+1.312.298.2364r.ashcroft@us.pwc.com

For Corporate Finance services outside the United States,please contact:

Global Corporate Finance LeaderChris Hemmings—+44.20.780.45703chris.hemmings@uk.pwc.com

Methodology

Forging ahead is an analysis of merger and acquisition activity in the global metals industry. Deal information was sourced from Thomson Reuters and includes deals for targets with primary SIC codes that fall into one of the following industry groups: iron ores; ferroalloy ores, except vanadium; steel works, blast furnaces, rolling mills, and fi nishing mills; iron and steel foundries; primary smelting and refi ning/nonferrous; secondary smelting and refi ning/nonferrous; rolling, drawing, and extruding/nonferrous; nonferrous foundries; miscellaneous primary metals products; and metals service centers and offi ces. Balance sheet data was sourced from public company reports.

This analysis includes all individual mergers and acquisitions for disclosed or undisclosed values, leveraged buyouts, privatizations, minority stake purchases, and acquisitions of remaining interest announced between January 1, 2011, and September 30, 2012, with a status of completed, intended, partially completed, pending, pending regulatory approval, unconditional (i.e., initial conditions set forth by the acquirer have been met but deal has not

been completed), or withdrawn. The term deal, when referenced herein, refers to transactions with a disclosed value of at least $50 million, unless otherwise noted.

Regional categories used in this report approximate United Nations (UN) regional groups, as determined by the UN Statistics Division, with the exception of the North America region (includes North America, Latin America, and the Caribbean UN groups), the Asia and Oceania region (includes Asia and Oceania UN groups), and Europe (divided into United Kingdom and Eurozone and Europe ex-UK and Eurozone regions). International Monetary Fund classifi cations were used to label economies as advanced or developing and emerging. Overseas territories were included in the region of the parent country. China, when referenced separately, includes Hong Kong.

Competing deals, not just the ultimate successful deal partner, were included in the data set used throughout the document.

Visit our metals industry website at www.pwc.com/us/industrialproducts

© 2012 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” and “PwC” refer to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member fi rms 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 a substitute for consultation with professional advisors. MW-13-0096 kd