Downer EDI Ltd said on Monday it suspended the search for a buyer for its mining servicing arm as the fast-spreading coronavirus wreaks havoc on markets, resulting in potential suitor Perenti Global Ltd suspending its interest.
Perenti, an Australian mining services provider, said it was still interested in Downer’s mining services business but funding the deal in the current market conditions would not be in its shareholders interest.
“We will maintain a watching brief on the situation and do not rule out re-engaging with Downer if market conditions improve,” said Perenti’s Managing Director Mark Norwell.
“It is important we maintain discipline around our growth strategy.”
The is not the first M&A deal to fall apart from the growing uncertainty arising from the virus outbreak, which has led to companies having to step back and rethink their strategies.
In Australia early last month, Melco Resorts & Entertainment Ltd pulled the plug on a stake purchase in Crown Resorts Ltd citing the virus’ impact.
Downer, in a separate statement, said the process for a potential sale of its Laundries business would continue. It added that the mining business was doing well.
(By Nikhil Kurian Nainan; Editing by Lisa Shumaker)
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