Mergermarket is pleased to present the second edition of European M&A Outlook – a study of European M&A activity, published by Mergermarket in association with CMS.

This year’s research extends across all European geographies and a number of important sectors, and takes into account the views of CEOs, finance directors, bankers, M&A heads, private equity players and sector specialists.

Key findings include:

• Attitudes about Europe’s economic recovery have improved significantly – in 2014, 85% of survey respondents are positive or very positive about growth in Europe, a 16 percentage point increase from 2013
• Views are very divided as to whether the political situation in Russia and Ukraine will impact European M&A and political uncertainty is still seen to be the greatest threat to European businesses
• Businesses are bullish about the level of M&A over the next 12 months with 67% of respondents considering either acquisitions or divestments or both. This planned activity is driven mainly by a growth strategy or a strategy to focus on the highest growth geographies in the current business climate
• Germany is tipped to be the most active M&A market and TMT the hottest sector over the next 12 months

Year-to-date deal activity shows this is a year for transformative mega mergers but, the question still remains—will this activity continue into the New Year? Appetite from investors for these large-cap transactions, coupled with confidence from corporate executives, has catapulted deal values upward. The first three quarters of 2014 saw a significant increase of 52% in deal value and 10% in terms of deal volume over the same period in 2013.

• YTD deal value in Latin America has increased over the same time last year bringing in US$107bn versus US$88.3bn in 2013
• In North America the Energy, Mining & Utilities sector remains active, with 167 deals valued at US$128.9bn in Q3, a 247% increase in value and a 26% increase in volume from Q3 2013
• Europe’s Pharma, Medical & Biotech sector accounted for the bulk of YTD value with a 21.5% market share, or 310 deals worth US$155.5bn

Corporate restructuring and divestitures are creating new opportunities for dealmakers in Japan. In tandem with industry consolidations in the domestic market, Japanese companies are shedding non-core and underperforming businesses to become leaner, more efficient companies.

This exclusive newsletter released by Deloitte — titled “Deals and Divestitures: New Trends in Japanese M&A”— analyzes this trend and other M&A activity that is defining Japan today.

Aside from expert interviews with Atsushi Noda, Partner, Deloitte Tohmatsu Financial Advisory Co., Ltd., and Brian Lightle, Executive Officer, Deloitte Tohmatsu Financial Advisory Co., Ltd., the newsletter includes an in-depth analysis of M&A activity in Japan.

Data highlighted in the newsletter includes:

• In YTD 2014, there were 19 divestiture-related transactions worth ¥297bn (US$2.9bn) in Japan, most involving domestic transfers in ownership, but signaling a potential increase in Japanese assets available for sale. This was an increase over the same period the previous year, which had only 16 similar deals worth ¥79.2bn (US$775m).
• Broken down by sectors, the consumer space saw the most divestiture-focused deal activity with seven deals (37% of deal volume), followed by the tech sector with three deals (16%). In value terms, the tech space saw the most deal dollars with ¥93.7bn (US$916m) (31% of deal value), followed by the financial services (30%) and transportation (26%) sectors.
• Interest from foreign investors maintained its momentum from previous years. Deals totals for YTD 2014 consist of 27 transactions worth ¥706bn (US$6.9bn).
• Bidders from the United States accounted for 41% of inbound deal volume and 96% of inbound deal value.
• Japan’s outbound deal flow has concentrated largely into North America, which accounted for 30% of outbound deal volume and 78% of outbound deal value in YTD 2014 (as of August 2014). Western Europe also saw a large piece of the outbound pie, with 14% of deal volume but only 4% of deal value in YTD 2014.

Kroll and Mergermarket present the latest edition of Spotlight Asia – Kroll’s Quarterly M&A Newsletter featuring Japan into Indonesia: Risks and Rewards

Indonesia has become an increasingly vital investment hub for Japanese companies in Southeast Asia. In 2013, Indonesia was the second highest recipient of Japanese Foreign Direct Investment (FDI) just behind China, and overtaking Thailand as the top destination. While last year saw a deal value of US$2 billion for M&A activity between the two countries, factors still remain that negatively impact the business environment and any decision to enter into Indonesia.  

Kroll, the global leader in risk mitigation and response, has once again teamed up with Mergermarket to analyze the challenges and potential in Indonesia in the latest edition of their Spotlight Asia series.

This issue seeks to understand the shifting landscape and vast potential for investors in the most populous country in the ASEAN region. It includes an in-depth interview with Tadashi Kageyama, Kroll’s Senior Managing Director, who outlines and offers solutions to the most pressing risks in investing and operating in Indonesia.

Trends and highlights in the newsletter include:

• According to Mergermarket data, Indonesia is now the second largest M&A market for Japanese investors in the region. This equates to 17 percent of the regions total M&A deal value share and 18.3 percent of all regional activity.
• The financial services industry shows huge potential even though the sector still has relatively low penetration, particularly among insurance providers. For many investors it is becoming an increasingly enticing proposition.
• Private consumption now makes up around 55 percent of all GDP. An extra 90 million people are expected to move into the middle-income bracket by 2030 further fuelling consumption rates. If current trends continue, it is believed that Indonesia will account for 40 percent of growth in the region.

The volume of activist campaigns is expected to continue to rise over the next 12-24 months. The 2014 Shareholder Activism Insight report, published by Schulte Roth & Zabel LLP in association with Mergermarket, notably reveals that the drivers behind the increased activist activity are numerous and wide-ranging.

The report examines the opinions of corporate executives and activist shareholders from the United States and for the first time, Europe, about their experiences in their respective regions. The report provides deep analysis of the issues impacting activism and unveils expectations for activity in 2015 and beyond.

Some key findings from the report include:

• Some 98% of US respondents expect an increase in activism, with more than half expecting the increase to be substantial
• Fifty-two percent of US respondents say that keeping an open dialogue with shareholders is the best company strategy to counter activist investors
• Europe is set for an activism boom. Among the European respondents, 77% of corporates and 67% of activists expect activism to pick up pace, due largely to the volume of underperforming assets left behind by the Eurozone crisis