Mergers in the nonfuel minerals industry: trends and motives.
Washington, DC: U.S. Department of the Interior, Bureau of Mines, IC 8979, 1984 Jan; :1-13
Interest in mergers in the nonfuel mineral industry developed when 5 were listed among the 50 highest valued mergers in the United States in 1981. This report presents a Bureau of Mines study of trends in merger activity from 1960 to 1979 and explores motives for mergers in the nonfuel mining and mineral industry. The objective was to determine precedent for or a trend toward the 1981 acceleration in merger activity and to examine certain financial motives for nonfuel mineral mergers. Data indicate that the relative value of nonfuel mineral mergers has grown since 1972 although the number of mergers has remained proportionate to historical trends for all mergers. Since 1974, the assets acquired in "large," nonfuel mineral firm mergers, those of $10 million or more, have comprised at least 93 pct of assets acquired. More nonfuel mineral firm mergers involved mineral companies as the acquiring firm than vice versa but mining and minerals firms acquired were of higher value than nonmining firms. A major motivation for mergers involving large mineral firms was the acquisition of assets at less than replacement costs. Univariate statistical testing, a methodology chosen for its applicability to the data, confirms this hypothesis while rejecting other financial motives. The remainder of the work is devoted to a discussion of suggested areas for future study.
Mergers; Statistical-tests; Acquisition; Assets; Mineral-industry; Replacement-costs
IH; Information Circular
NTIS Accession No.
Washington, DC: U.S. Department of the Interior, Bureau of Mines, IC 8979