E&Y expects growth in M&A activity in Russia
In 2016-2017, burst of activity may occur on the M&A market (mergers and acquisitions) in the Russian gold mining industry, a joint study by EY and the Union of Gold Producers "Review of the gold mining industry in Russia for 2014-2015" reports.
"This will result in the inevitable consolidation in the industry, necessary to maintain its competitive position," - experts say.
At the present time, there is the pressure on the value of gold mining assets in Russia, which is caused by a number of political and economic factors, despite increasing the profitability of companies. Most foreign investors continue to consider significant risks of investing in Russia. However, some of them have already got used to the idea of the current sanctions and don’t leave Russian projects without attention, while at the same time demand a higher return.
Investors now don’t show much interest in the financing of the Russian gold mining projects. As a result, prices of assets for mergers and acquisitions remain low. Despite this, it can be assumed that such a low threshold for the entry into the high-margin industry in the near future will exacerbate the interest of national companies, as well as foreign investors, which operate in Russia for a long time, and will lead to a rapid resumption of the activity in the field of M&A on the Russian market.
