The number of metals industry mergers and acquisition remained steady in the first half of 2008, but overall value declined because attractive takeover targets have became scarcer due to consolidation, says a study by PricewaterhouseCoopers. In fact, the metals industry consolidation has triggered more attempts by companies, mostly steelmakers, to acquire and integrate suppliers of such key raw materials as iron ore.

There have been 68 global deals with values of at least $50 million in the first half of the year, compared with 70 in the first half of 2007. However, the total value of those deals dropped to $42.9 billion in the first six months, from $73.5 billion a year earlier. At the current rate, the 2008 total of merger deals would fall short of the $298.4 billion of 2007 and the $186.7 billion recorded in 2006, according to Pricewaterhouse.

"While financial investors have diminished their role in this sector, strategic investors are taking full advantage of strong balance sheets and ample liquidity to vertically integrate or expand their geographic reach," says Douglas Dean, U.S. metals leader at Pricewaterhouse.