Welcome to Octobers Venue® Market Spotlight. This month’s edition focuses on Real Estate and M&A.

Mergermarket, commissioned by RR Donnelley, interviewed professionals based in the US, Europe and Asia-Pacific who predict an increase in real estate deal-making is on the horizon. A recovery in both the residential and commercial real estate markets will drive the expected rise in real estate-related M&A over the next year.

Mergermarket is pleased to present the second edition of the European Goodwill Impairment Study in association with Duff & Phelps. The study examines general goodwill impairment trends across countries and industries within the European market, and includes a survey of 240 European financial executives across a variety of industries.

Highlights from the report include:

• European companies in the STOXX® Europe 600 Index recognised a total of €49.6 billion of goodwill impairments in calendar year 2013, representing a decrease of approximately 25% from the €66.4 billion recorded in 2012.
• 27.4% of companies within the STOXX® Europe 600 recorded goodwill impairments in 2013.
• In terms of geography, companies in Italy recorded the highest aggregate goodwill impairment amount of €16.0 billion, while Financials topped the broad industry sectors with €17.2 billion.
• Respondents to the survey indicated a dramatic decline in the magnitude ofgoodwill impairments from last year: 77% of companies participating in the 2014 Survey impaired less than 20% of their goodwill balance in 2013, while 62% of company respondents in the last year’s survey had reported write-downs of 20% to 50% in 2012.

Mergermarket is pleased to present Masters of the Deal: Part 1, a new study conducted by the M&A Research Centre at Cass Business School and commissioned by Intralinks.

​How do some firms create market-beating shareholder value from M&A? The first instalment of this two-part report explores the relationships between shareholder value creation and M&A and identifies the strategies of M&A outperformers.

​With findings based on an unprecedented 20-year research study of the M&A activity of 25,000+ global firms, this report provides essential and actionable insights that should inform your corporate M&A strategy, and will answer key questions such as:​

• ​What are the real relationships between M&A activity and shareholder value creation?
• How does value creation from acquisitions differ from divestments?
• What M&A strategies should firms pursue depending on their maturity?
• Which M&A strategies result in underperformance?

Acquisitions in the United States have seen a remarkable resurgence after a tough few years​

Mergermarket is pleased to present Back in the game: The rise of US M&A, in association with White & Case. The report looks at key issues and trends driving the recovery of the M&A market in the United States.

The first half of 2014 has witnessed a great dealmaking revival in the US. Using Mergermarket data, the report reveals that deal values are up to their highest levels in five years, the use of shares to finance deals has hit a six-year high and inbound M&A into the United States has posted the best first half on record since 2007.

Other highlights include:

• Megadeals dominate: In Q2 2014 the volume of deals over US$1bn reached the highest level since 2008.  Consolidations in the TMT sector and moves by pharma companies to avoid patent cliffs have supported megadeal volumes.
• Acquisitions being welcomed by investors. So far in 2014, 59% of acquiring companies saw their share price rise the day after a deal announcement, the highest percentage in the last four years.
• Private equity in the exit era: Private equity firms sold 458 deals worth US$155.1bn in H1 2014, a rise of 55% in volume and 200% in value on H1 2013 levels.

Asia’s continued prosperity is intrinsically bound to the major ongoing conversation in the energy markets. Simply put, what needs to happen to ensure energy security at an affordable price for an ever increasingly populous in Asia? This question has become increasingly important for governments and key stakeholders to answer.

‘Fuelling the future: Energy outlook for Asia-Pacific’ was commissioned by Norton Rose Fulbright, and the research conducted by Remark, the research and publications division of Mergermarket. The report roadmaps the major challenges facing the Asia-Pacific region in securing its long-term energy needs and some of the possible answers to these challenges. The report deep dives into the mindset of energy sector practitioners to offer insightful data into what does the short to long-term look like for investors in the Asia-Pacific region. It seeks to understand how new technologies, a changing fuel mix, and a shifting regulatory landscape will shape this sector over the next twenty years.

The report also highlights:

• The financial outlook of the region is improving and this, coupled with the growing demand for resources, led 87% of respondents to agree that market conditions are right to undertake significant new project development in the sector over the next 12 months.
• 35% of respondents felt that regulatory change was the most or second most pressing issue facing the industry over the next 18 months.
• Shale gas will play an important role as innovative technologies make this a cheaper and more viable option. 22% of respondents felt that it showed the greatest potential over the next 20 years.
• Respondents expect solar power to see the largest potential out of possible renewable sources over the next 20 years.

Baker & McKenzie and Mergermarket are proud to present this new report on the changing business landscape for Japanese corporations, and how they can start to apply business transformations in their business activity and operations to become a truly global entity. Becoming a global corporation requires more than the completion of a handful of cross-border transactions. Doing so means re-evaluating internal operations, optimizing business structures, and maintaining best practices that have worked in the past while discarding those that have not. It also involves integrating innovative and international ideas into the existing corporate conscious. This new report identifies issues surrounding these points, and puts a main focus on four areas, compliance, HR management, tax and information technology.

 

Research commissioned by Baker & McKenzie, in collaboration with Mergermarket, has culminated in the report ‘The Global Challenge: Applying business transformations in corporate Japan’. The report also underlines pressing issues when embracing cross-border M&As, and how Japanese corporations can tackle these challenges head on and use this to succeed in taking a lead in transforming business structures and practices. Doing this well can ultimately lead to global success.

Buying the asset is one thing, fitting it into your existing business is a completely separate and often underestimated challenge. What should you integrate, how should you do it, and is it the same for every deal, cross-border or domestic? Toppan Vite commissioned Mergermarket to explore the issues surrounding post-merger integration with leading industry experts.

Points of discussion:

• Varying levels of integration across different transactions
• Insight on who should lead integration efforts
• Crucial communication planning during integration
• Different challenges associated with the integration process
• Unique integration issues in cross-border transactions

The value of global M&A deals through the end of October has surpassed aggregate 2013 numbers and deal sizes have skyrocketed during the year given the many large-cap and transformative transactions. The biggest deal for October is the almost US$12bn acquisition of New Jersey-based medical equipment company Becton, Dickinson and Co. of San Diego-headquartered medical technology company CareFusion Corporation. CEO confidence in the M&A market has boosted the number of these mega transactions in 2014.

• In Latin America, the average deal size of US$379m is the highest since Q1 2010 when it was US$624m, a 26.8% increase from the average deal size in Q3 2014 of US$299m
• North American M&A value for October ended with a total of 362 deals worth US$88.3bn, a year-on-year increase of 31.6% by value and 14.2% by volume from last year
• Industrials & Chemicals still remains a popular investment space in Asia-Pacific. In October, the sector recorded 52 deals to make up 23.1% of the market share at a value of US$9.4bn

The 2014 Latin American M&A Spotlight report, published by Greenberg Traurig LLP in association with Mergermarket, reveals a cautious optimism for Latin American M&A. Despite the uneven economic growth rates, respondents continue to expect an increase in Latin American M&A activity over the next 12 months.

The 2014 Latin American M&A Spotlight examines the opinions of Latin American-focused investors and corporate executives who offer their perspectives on the region’s M&A environment. This report looks at the region’s cross-border and intra-regional M&A activity by analyzing the most active countries and sectors in the context of current challenges while identifying new investment opportunities.

Some key findings from the report include:

• 62% of respondents believe annualized economic growth in Latin America will be in the 3% to 4% range over the next year
• Eighty-six percent of respondents believe that acquisitions by strategic investors in Latin America are likely to be the most common type of transaction over the next 12 months, followed by acquisitions by financial sponsors (54%)
• Intra-regional M&A is poised to grow over the next 12 months as more than half of survey respondents (52%) expect a significant increase in M&A involving Latin American companies transacting with one another

Mergermarket is pleased to present the third edition of Deal Drivers Africa, a comprehensive review of African M&A, published in collaboration with ENSafrica, Nedbank Capital and Control Risks. Based on interviews with 100 M&A practitioners operating in Africa, this report provides invaluable insight into the African M&A market from those who know it best.

Highlights from the report include:

• M&A between Africa countries quadrupled year-on-year (YoY) to US$13.5bn, as volume edged up 3% YoY to 99 deals. The bulk of African domestic M&A took place in Nigeria and South Africa, with a combined value of US$7.9bn, or 59% of total African domestic deal value.
• Fifty-three percent of survey respondents expect dealmaking to increase significantly over the next 12 months.
• Private equity (PE) buyout volume rose 11% to 21 deals in the first three quarters of 2014, while value grew 7% YoY to US$1.3bn. Exits exhibited a similarly positive trend: while there were only eight exits in the first three quarters of 2014, value jumped 75% YoY to US$654m.
• Natural resources M&A activity declined 25% YoY in volume to 30 deals, and 79% YoY in value to US$4bn, due in part to sluggish economic growth in markets such as China and India.