Monthly M&A Insider: H2 2014

26 January 2015

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M&A activity for 2014 surpassed previous years’ figures in terms of total number of global transactions. Last year there were 16,588 deals compared to the next highest year, 2007, that saw 16,060 deals. Many factors contributed to these hyper elevated levels of dealmaking to include the overall improvement of the economy that gave CEOs the confidence needed to execute deals and significant cash piles companies accumulated throughout the crisis.
In looking at the year ahead, the big question for dealmakers becomes whether the positive momentum of deal flow last year will continue throughout 2015.
Highlights include:
  • In Latin America, the most active sector was Consumer with 66 deals totaling US$4.3bn.
  • The top deal of H2 2014 was Actavis’ US$63.2bn acquisition of Allergan in the Pharma, Medical and Biotech sector.
  • Goldman Sachs topped the North American Financial Advisers League Table by volume and value with 136 deals worth US$381.2bn in H2 2014, a 30.5% increase in value from H2 2013 (US$292.1bn)

Inside Corporate – Wolf Theiss Corporate Monitor FY 2014

22 January 2015

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Mergermarket is pleased to present the third edition of INSIDE CORPORATE, a study of M&A activity in Central and Eastern Europe (CEE), alongside macroeconomic and legal developments, published in association with WOLF THEISS. Drawing from extensive data on CEE M&A trends, the report offers insight into the challenges and opportunities facing the region, as well as the outlook for 2015.
Key findings include:
  • While 2013 was a banner year for M&A in the region, activity dropped marginally in 2014, resulting in a decline in volume by 14% to 434 deals while value dropped 26% to €20.8bn. Dealmaking activity was partly weighed down by a slowdown in the eurozone’s economic recovery, particularly in Germany, and the impact of tensions between Russia and Ukraine.
  • Nevertheless, an improved global economic environment and cash-rich corporates, particularly from Asia and the US, supported inbound investment in 2014. Inbound M&A value increased 19% to €13.7bn YoY, despite a 12% drop in volume to 176 deals. This was the highest amount of foreign investment since 2010.
  • Sector trends: The industrial and chemicals sector saw the most deals in 2014 with 19% of total M&A. Meanwhile the real estate sector (22%) and the TMT and energy, mining and utilities sectors (21% each) made up the highest share of total M&A value.
  • According to Mergermarket’s Heat Chart, which logs the number of ‘company for sale’ stories announced over the past six months, the consumer and industrial and chemicals sectors will continue to be among the busiest in 2015, with 61 and 58 potential M&A targets, respectively.

Toppan Vite – The cutting edge

06 January 2016

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Deal value in IT was up 25% in the first three quarters of 2015, as the industry continued its evolution. But what constitutes a sound strategy in this fast-moving sector? What role do link-ups play, and how can established players compete with rising start-ups? Toppan Vite, in partnership with Mergermarket, asked three IT M&A experts for their thoughts on the year ahead.
Points of discussion:
  • Trend of large deals in the traditional IT space
  • Biggest challenges facing the IT industry across the market
  • How can IT companies compete with the new wave of start-ups?
See more and subscribe to Toppan Vite’s Blog here.

Distress and deceleration in China – Houlihan Lokey Quarterly Newsletter

15 January 2016

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China’s Shanghai Composite Index dropped 7% on the first day of trading in 2016, sparking a global selloff and renewing fears over the health of China’s economy, which slipped below 7% GDP growth in Q3 2015 for the first time since 2009. In spite of its slowing growth profile, China’s debt-fuelled economy has yet to embark on a process of deleveraging, compounding concerns over a credit bubble. This may generate an increase in corporate defaults as companies struggle to repay debt, especially in sectors hardest hit amid the slowdown, as indicated by escalating stress in the commodities, real estate and gaming industries.
Houlihan Lokey, in conjunction with M&A intelligence provider Mergermarket, takes a close look at corporate distress and debt restructuring trends in this exclusive thought leadership newsletter, “Distress and deceleration in China”.
Highlights and trends analyzed include:
  • Debt in China’s property sector continues to grow as an oversupply of unsold housing units causes further stress;
  • Trouble brews for commodities as prices continue to fall with diminished demand for construction materials and a global surplus of output;
  • Macau’s floundering gaming industry feels the backlash from China’s anti-corruption campaign; and
  • An exclusive interview with Brandon Gale, Head of Houlihan Lokey’s Asia Restructuring Practice, on considerations and key challenges for both debtors and creditors engaged in distressed restructuring efforts in emerging Asia.

Monthly M&A Insider – January 2016

15 January 2016

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Last year was an extraordinary year for M&A. With 16,837 transactions worth US$4.3tn announced globally, total value rose 30.5% from last year, breaking 2014’s previous record of US$3.3tn, despite a drop in volume by 560 transactions from 17,397.
Highlights from the report include:
  • 2015’s top deal was US-based Pfizer’s announcement that it would acquire Ireland-based Allergan for a staggering US$183.7bn – making it the largest pharmaceutical transaction and second-largest overall in M&A history.
  • The number one financial advisor, Goldman Sachs, advised on 349 transactions and reached a peak value of US$1.7tn, a 78.7% rise from 2014.
  • The Energy, Mining and Utilities sector was the top leading sector capturing 14.9% of market share with 1,331 transactions worth US$637.7bn.

Q4 2015 Baker & McKenzie Cross-Border M&A Index

20 January 2016

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Cross-border deal values in the fourth quarter of 2015 rose to the highest level ever recorded in a single quarter, fuelled by megadeals such as Pfizer’s purchase of Botox maker Allergan for US$183.7bn and Anheuser-Busch InBev’s US$120.3bn merger with SABMiller. These deals pushed Baker & McKenzie’s Cross-Border M&A Index, produced in association with Mergermarket, to a record high of 331.

Defying gravity: Insurance M&A on the rise

27 January 2016

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Mergermarket, in association with Willis Towers Watson, is pleased to present Defying gravity, the latest edition of our investigation of M&A trends in the insurance sector. This year’s report canvassed the opinions of 750 senior-level executives within the insurance industry, split equally across the Americas, Asia and EMEA regions.
Highlights from the report include:
  • By the close of 2015, the value of insurance M&A deals surged to €129.3bn – three times the deal value recorded in 2014, and the highest on record.
  • Activity was buoyed by 33 transactions with a deal value of more than €500m, compared to 18 in 2014. This included four ‘megadeals’ worth more than €5bn, compared to only one in 2014.
  • Survey respondents identified top-line growth and access to new distribution channels as the most important drivers of their recent deals.
  • Looking ahead, respondents expect Latin America and Emerging Asia to see the biggest increase in M&A activity over the coming three years.
  • Meanwhile, some 82% of survey respondents expect to make at least one acquisition in the next three years, with 56% expecting to make two or more acquisitions in the same time frame.

Distress and divestitures: Changing M&A opportunities in ASEAN energy and resources

28 January 2016

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In 2015, divestitures accounted for US$4.7bn worth of ASEAN energy and mining deals. 14% of these divestitures were motivated by varying degrees of distress or a general need to refinance and restructure.
FTI Consulting and Clifford Chance, in collaboration with Debtwire, are proud to present their latest newsletter focusing on the rising distress and changing M&A landscape of the ASEAN energy and resources industry.
The newsletter looks in detail at the changing complexion of ASEAN’s energy market – including the increasing focus on renewables in the region, and at the regulatory challenges facing distressed investors. It also contains an outlook for the ASEAN distressed debt and insolvency market in 2016 and beyond.
Key highlights from the newsletter:
  • Out of 215 deals in the ASEAN energy and resources sector completed from 2012 to 2015, more than half involved the divestment of business assets or energy holdings.
  • Energy and resources asset selloffs in Southeast Asia have been catalyzed by a variety of factors, including currency depreciations, China’s devaluation of the yuan, anticipated higher US interest rates, and a sharp decline in global commodity prices.
  • The main drivers of distressed energy and resources divestitures in Southeast Asia are debt and overcapacity, a result of debt-funded expansion at the height of inflated regional demand, sometimes in foreign denominations at the mercy of foreign exchange fluctuations.
  • A detailed look at the risks and rewards of investing in Malaysia, Indonesia and the Philippines as popular target jurisdictions for energy and resources M&A in the ASEAN.
  • An exclusive interview with Clifford Chance Partner Andrew Brereton and Counsel Sze-Shing Tan, on opportunities in the sector and the key legal risks associated with investing in the ASEAN energy space.

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Market Spotlight: Spinoffs, Carve Outs, Divestitures

28 January 2016

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Amid a record-breaking year for deals in 2015, the value of corporate spinoffs, carve outs, and divestitures rose as well, to US$523.6bn, representing a 30% year-over-year increase. According to this month’s Venue® Market Spotlight, survey respondents universally think corporate asset sales will either remain the same (20%) or increase (80%) in the next 12 months.
The biggest drivers of asset sales are expected to be improving operational efficiency (56% of respondents), focusing on core competencies (40%), and paying down debt (36%). By far the most-cited risk associated with selling assets is low asset valuations (72%).
RR Donnelley commissioned Mergermarket to interview professionals based in the US, Europe and Asia-Pacific to gain insight on their opinions regarding corporate asset sales for the year ahead.


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