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Mining M&A Has Nowhere To Go But Up In 2015 [Chart]

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Mining M&A Has Nowhere To Go But Up In 2015 [Chart]

Mining M&A Has Nowhere To Go But Up In 2015 [Chart]

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

This week, Alamos Gold and AuRico announced a merger worth $1.5 billion. This is all while broad speculation continues that former Xstrata boss Mick Davis is looking to finally deploy his $5.6 billion war chest held by his company, X2 Resources.

Common wisdom is that the majority of mergers and acquisitions (M&A) such as these take place at both the peaks and the troughs of the market. In this week’s Chart of the Week, we wanted to take a look at the truth of this statement over the last dozen years.

The answer: the number of deals peaked in the aftermath of the Financial Crisis in 2009 and 2010. During this time, the overall market dropped off and subsequently recovered with the commodity supercycle still intact. The average value per deal was very low post-crisis, steadily increasing until 2011 when the junior market would reach its most recent heights.

During hot market years, M&A activity was frequent and significant. In years such as 2006, 2007, and 2011, both the cumulative value and the average value per deal were at their highest rates. In the down year of 2013 the data was also relatively positive, but it was also skewed by the $90 billion merger of Glencore and Xstrata. Not including this outlier, it would appear that the data point would be more inline with the trend.

Last year, there were 544 deals for the unimpressive total of $44.6 billion. The volume of deals and their cumulative value reached their lowest points since 2003 and 2004 respectively. Most deals in 2015 will follow suit from the previous year, serving defensive and conservative means such as the Alamos and AuRico merger.

However, if Mr. Davis or like-minded groups start dipping into their war chests, that will mark the beginning of something new: the tilting to the speculative side of M&A that traditionally is a prelude to market recovery.

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Chart of the Week

Ranked: The Richest Countries in the World

These countries hold 74% of the world’s $204 trillion in private wealth. See the 10 richest countries, and how their totals have changed over time.

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Ranked: The Richest Countries in the World

Since the 2008 financial crisis, global private wealth has been steadily growing.

In fact, overall private wealth worldwide reached $204 trillion in 2018, which is a 26% increase over the past decade.

This week’s chart, which uses numbers from the Global Wealth Migration Review 2019, examines the top 10 richest countries and the growth of private wealth from 2008 to 2018.

RankCountryPrivate Wealth in $USD (2018)10-yr change (%)
#1🇺🇸 United States$60.7 trillion27%
#2🇨🇳 China$23.6 trillion130%
#3🇯🇵 Japan$19.1 trillion18%
#4🇬🇧 United Kingdom$9.1 trillion4%
#5🇩🇪 Germany$8.8 trillion7%
#6🇮🇳 India$8.1 trillion96%
#7🇦🇺 Australia$6.0 trillion48%
#8🇨🇦 Canada$6.0 trillion23%
#9🇫🇷 France$5.9 trillion-7%
#10🇮🇹 Italy$3.8 trillion-14%

Combined, the 10 countries above represent 74% of total private wealth worldwide.

These trends are staying consistent with the numbers seen in 2017. Asian countries such as China and India showed the highest uptick in wealth gains, holding their #2 and #3 spots on the list, while European countries such as France and Italy actually saw a decrease.

Trends in the Wealth Landscape

Over the last 10 years, China has experienced the largest increase in wealth at 130%. This growth also means that China now boasts more high-net-worth individuals (HNWIs) than any other country except the United States.

While India doubled its total private wealth over the 10-year period, wealth per adult remains at just 22% of the global average.

The U.S. continues to lead in wealth numbers, holding 30% ($60.7 trillion) of the world’s total private wealth. Unsurprisingly, the U.S. remains home to the most millionaires in the world.

The World’s Millionaires: Top 3 Countries

  • United States: 17,350,000
  • China: 3,480,000
  • Japan: 2,809,000
  • World total: 42,155,000

Source: Credit Suisse

Australia now tops the above list in terms of highest wealth per adult, and it is second in the world only to Switzerland in the context of major nations.

Despite the recent turmoil and uncertainty stemming from Brexit, the United Kingdom still saw overall growth in the past decade, moving from #5 to #4 rank on the list of countries with the highest private wealth.

Projections from New World Wealth estimate that total global wealth will reach $291 trillion by 2028, driven by strong growth in Asia.

Rising Wealth Inequality

Unfortunately, this growth is also linked to the growing problem of wealth inequality gap across the globe, and the gap seems to get bigger every year.

The average global wealth per adult is approximately $27,000 – but of the total adult population, 64% have a net worth of less than $10,000. The bottom half of adults in the world now own less than 1% of all household wealth.

By contrast, 85% of all household wealth is owned by the richest 10%, and the top 1% own almost half (47%) of the world’s household wealth.

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Chart of the Week

The eSports Boom, and the Numbers Behind the Sector’s Explosive Growth

Everything you need to know about the eSports Boom, including the sector’s rapid growth, massive prize pools, and the most valuable eSports companies today.

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The oldest professional sport teams can trace their start back to the mid-19th century, a period when casual past times such as baseball or football transitioned into more organized leagues.

Since this tipping point, pro sports has thrived around the world, and the business of sports has evolved into a multi-billion dollar ecosystem for teams, leagues, players, merchandisers, sponsors, broadcasters, and event spaces.

Today, this evolution still continues – and it is being driven by the emergence of eSports (electronic sports), an exciting frontier for fans and business alike.

eSports Extravaganza

Today’s chart breaks down the eSports boom, including data on the sector’s rapid growth, prize pools, and the most valuable eSports companies today.

Visualizing the eSports Boom, and the Numbers Behind Its Explosive Growth

Despite having a reputation in the media and in popular culture as being on the fringes, it is clear that gaming is now a truly mainstream phenomenon.

In fact, the global gaming industry has now eclipsed $135 billion in revenue worldwide – a figure that is twice as much as the film and music industries combined.

With hundreds of millions of avid fans around the world, demand to watch the most elite gamers has reached a fever pitch – and now, it’s not uncommon to see sold-out arenas, big name sponsorship deals, and massive prize pools in the name of eSports.

Defining the eSports Ecosystem

Like any professional league, eSports creates the foundation for an entire ecosystem of opportunities.

Players
Players are central to the ecosystem, since they are the stars and they have their own personalities. One famous star is Kuro Takhasomi (KuroKy), who has brought in a whopping $4.2 million in prize money from Dota 2 tournaments so far. He has earned more than any other player in eSports.

Teams
Because the games played are mostly team-based, there is a crucial element of teamwork involved. eSports franchises are currently selling for millions of dollars. It’s worth noting that these franchises don’t just employ players – they also hire staff that can better ensure the success of players, such as coaches, trainers, and personal chefs.

Games and Developers
Some of the most important games in the eSports world right now include: Dota 2, Counter-Strike, League of Legends, Overwatch, Fortnite, and Call of Duty.

Competitions
Leagues and tournaments can offer massive prize pools for players. The biggest single pool so far was $25.5 million, offered for a Dota 2 tournament in 2017 (“The International”). It’s the second-largest prize pool offered in any kind of sport, behind the U.S. Open (tennis).

Organizers
Running eSports events is big money, and organizers of events can tap into sponsorship and fan revenue. Sometimes game publishers will organize the events, but third-party ones also exist in the ecosystem.

Sponsors
Sponsors like Coca-Cola, Intel, and Mercedes-Benz have shelled out millions of dollars to sponsor events and reach the massive audiences associated with eSports. In more recent news, SAP signed a deal to sponsor one of the biggest names, Team Liquid.

Broadcasters
Broadcasters, both traditional and online (YouTube, Facebook Live, Twitch, etc.), are also in to get a part of the action. Recently, game developer Blizzard signed a broadcasting deal with Disney to broadcast Overwatch League playoffs on ESPN, ABC, and Disney XD.

What do you think is the most exciting part of the eSports boom, and why?

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