Acquisitions within this industry create a great deal of excitement but are hard to conclude in volatile markets A few big and several modest acquisitions have lightened the Southern African mining scene in the past three years, but an almost equal number of deals has collapsed.Analysts often complain that mining companies tend to make acquisitions at the top of the cycle and sell at the bottom, resulting in huge losses for shareholders.Some of the deals concluded at the top of the market were clearly based on a too-sunny view of future commodities prices. But at the bottom of the cycle, deals fail for a variety of reasons. These include buyers’ inability to raise finance because banks are risk averse and share prices are too low to make shares a viable currency.It can be impossible to agree on price because sellers overvalue their assets.Distressed assets may look like an opportunity, but after a due diligence it can be obvious they require more investment than weak markets justify...
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