Slow but steady: US M&A H1 2016

29 July 2016

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Mergermarket is pleased to present Slow but steady: US M&A H1 2016, in association with White & Case. The report looks at the key factors and trends driving dealmaking in the United States, and what might be in store for the rest of 2016. After two blockbuster years for US M&A, the market reverted to historical norms for the first half of 2016.

Monthly M&A Insider – July 2016

01 August 2016

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Global M&A activity experienced a decline following the record highs of last year, with 7,794 transactions worth US$1.3tn, a 26.8% decrease in value and 936 fewer deals compared to H1 2015. Political action and uncertainty proved a significant influence around the globe throughout H1 2016. Actions by US regulatory agencies upset two potentially high-value transactions in Pfizer/Allergan and Halliburton/Baker Hughes. Similarly, in Europe, potential implications related to the “Brexit” vote added uncertainty to that region’s overall dealmaking activity.
 
Highlights from the report include:
 
  • North America was again the top region for M&A, capturing 44.8% of global market share by value for a total of US$594.5bn.
  • The Canadian market expanded its appetite for targets in the US as well as Central and South America – totaling US$32.6bn for 17 businesses – specifically in the Energy, Mining & Utilities (EMU) sector.
  • China National Chemical (ChemChina) Corporation’s US$45.9bn bid for the Switzerland-based biotech company Syngenta represented H1 2016’s top deal.

Deal Drivers EMEA Half-Year 2016

11 August 2016

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Mergermarket is pleased to release the half-year edition of Deal Drivers EMEA, in association with Merrill Corporation.
 
This report provides an in-depth review of M&A activity for the half-year of 2016, offering key insights into how announced deals for H1 2016 will impact M&A for the year ahead.
 
Highlights from the report include:
 
  • Transatlantic activity dipped in the first half of 2016, partly in anticipation of the UK referendum and November’s US presidential election. Inbound deals from North America into Europe fell to 297 deals during H1 2016, down 18% compared to H1 2015, while deal value also slumped by 27% to €46.8bn. The incumbent Obama administration also became more outspoken against tax inversion deals which made larger corporates more hesitant to look for tax domiciles in Europe. This had a particular effect on the pharma sector.
  • Private equity firms have become increasingly cautious with fund allocation. Compared to H1 2015, PE buyout value was 33% lower (€38.6bn) despite an 8% rise (559) in deal volume in H1 2016.
  • The prolonged depression in crude oil is expected to create opportunities within the Gulf economies. Most notably, Saudi Arabia recently moved to ease restrictions on foreign ownership.

Deal Drivers Americas Half-Year 2016

11 August 2016

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Mergermarket is pleased to release the half-year edition of Deal Drivers Americas, in association with Merrill Corporation.
 
This report provides an in-depth review of M&A activity for the half-year of 2016, offering key insights into how announced deals for H1 2016 will impact M&A for the year ahead.
 
Highlights from the report include:
 
  • The value of deals in the Americas shrank significantly in H1 2016 versus a year ago, due in large part to the absence of so-called megadeals (deals worth over US$5bn). H1 2016 recorded only 23 such deals, a 28% drop in volume compared with the same period last year.
  • Despite political and regulatory uncertainty, deal volumes in the Americas were encouraging when compared to activity from 2008 to 2013. Compared to H1 2013, deal volume rose by 17% in H1 2016, while value increased by 45%.
  • The life sciences and healthcare sector provided the year’s top two deals with Shire’s US$35.3bn bid for Baxalta and Abbott Laboratories’ announcement that it would buy St. Jude Medical, valued for nearly US$30bn.

Aviation and Aerospace M&A Quarterly – Q2 2016

12 August 2016

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ICF International (formerly ICF SH&E) is pleased to present the 12th edition of Aircraft, Airlines, Aerospace & Airport M&A Quarterly, published in association with Mergermarket. The publication highlights activity and trends in aircraft, airlines, aerospace, airport and tourism M&A in Q2 2016.
 
  • 3i Infrastructure and Deutsche Asset & Wealth Management acquire Belgian GSE leasing and services provider TCR International from Chequers Capital and Florac SAS for US$228m. 
  • TUI acquires Transat’s French and Greek units for US$62m.
  • TransDigm Group buys ILC Industries, the parent company of Data Device Corporation, from private equity firm Behrman Capital for US$1bn.
  • HNA Group acquires a 13% stake in Virgin Australia for US$114m, while China’s Nanshan Group buys a further 20% stake in the Australian carrier for US$198m

William Fry Mid-Year Irish M&A Review 2016

31 August 2016

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Mergermarket is pleased to present the William Fry Mid-Year M&A Review. This report provides a comprehensive overview of developments in the Irish M&A market during H1 2016, and offers insight into likely trends in the year ahead.
 
From a slow start in the first two months, M&A value jumped sixfold to €17.7bn in H1 2016 year-on-year, while volume increased 9% to 58 deals. The increase in value was largely attributable to the year’s biggest deal, which saw Johnson Controls purchase Irish fire and security provider Tyco International for nearly €15bn. Absent this one outlier, value for H1 2016 totalled of €2.8bn, similar to the €2.7bn total value seen in H1 2015.
 
In general M&A activity has been more muted in 2016, returning to more normalised levels from the buoyant years of 2014 and 2015. In addition, the UK’s decision to leave the EU had a big short-term effect on global markets. However, from an M&A perspective, it is possible that the weakened sterling in the wake of Brexit may offer some opportunities. Attractive valuations attached to UK companies could pique the interest of foreign buyers, including Irish firms.
 
Highlights from the report include:
 
  • Sector watch: An interesting development this year has been the focus on the industrials and chemicals sector. The industry has had seven transactions in H1 2016 — 23% of total inbound deal volume — compared with just two in the first half of 2015. Deal value in the sector was heavily impacted by the Johnson deal, but removing this deal, value for the sector still saw a rise, standing at €480m in H1 2016, compared with €49m for 2015 as a whole.
  • Private equity snapshot: PE activity has continued to grow in the first half of 2016 with volume increasing to 13 deals from 10 year-on-year. Deal value jumped 106% to €2bn.

Market Spotlight: Healthcare

01 September 2016

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Welcome to the August Venue® Market Spotlight.
 
While overall M&A activity has slowed over the first half of 2016, observers are forecasting strong dealflow in the healthcare industry over the next year. This optimism can be attributed to a variety of factors, including companies’ desire to acquire synergistic technology and longer life expectancies worldwide, which has led to greater demand for care.
 
To further examine the year ahead in healthcare M&A, RR Donnelley commissioned Mergermarket to interview dealmakers and professionals based in the US, Europe and Asia-Pacific. Respondents said attractive sub-segments for the coming year would include digital health and biotechnology, while more than half of respondents signaled that Asia would see the biggest increase in deal activity.
 
According to survey participants, private equity will also be a significant factor in the sector, with 74% saying that valuable assets such as healthcare-related technology would entice these buyers into the market.

Investing in India’s growth story – Kroll Quarterly M&A Newsletter

08 September 2016

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Favorable economic and demographic conditions, plus an encouraging regulatory regime, are turning India into an ideal target market for inbound M&A in Asia-Pacific. Since 2011, inbound transactions have trended up, and overall foreign direct investment (FDI) in the country reached a peak in 2015 that placed India as one of the leading destinations for global FDI, ahead of the region’s economic behemoth China. General sentiment among foreign investors for Indian investments remains strong, creating a bright outlook for inbound M&A through the rest of 2016 and into 2017.
 
Kroll, the global leader in risk mitigation and response, has once again teamed up with Mergermarket to analyse the opportunities and challenges of investing in India in the latest edition of their Spotlight Asia series.
 
In addition to a comprehensive analysis of trends shaping the Indian M&A market, this issue includes exclusive insights from Kroll Managing Director Reshmi Khurana who highlights the key country-specific risks foreign investors are likely to face and the actions needed to uncover them through a thorough due diligence program.
 
Additional M&A trends and highlights in the newsletter include:
 
  • In 2015, inbound M&A totaled 227 deals worth US$19.6bn. In the first half of 2016, 82 deals worth close to US$9bn were announced, putting the country on track for another banner year of inbound investment.
  • India attracted 6% of all US outbound M&A transactions (deal volume) in 2015, surpassing the 2% of outbound M&A directed at China that year. So far in 2016, India has continued to attract US interest, with US$3.1bn through 27 deals compared to similar US investment in China at US$1.3bn and 13 deals.
  • Technology, media and telecommunications companies accounted for 26% of deal value and 22% of deal volume since 2011 led by feverish interest in the country’s e-commerce market.

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Due Diligence Roadmap #2: Managing The Buy-Side

15 September 2016

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Thorough preparation, effective team organization, and clear communication are the driving factors behind successful due diligence. However, defining the universal components of a so-called “diligence dream team” is difficult as no two teams — or deals — are alike.
 
With an emphasis on examining team structure and communication challenges, RR Donnelley, in conjunction with Mergermarket, is pleased to present Due Diligence Roadmap: Managing the Buy-Side. This report, the second in the series, provides important findings on which members of the due diligence team are the most vital to the process and what challenges respondents often face when communicating with teams across the globe.
 
Key findings include:
 
  • About three-quarters of respondents said legal advisors play one of the most important roles during the due diligence process.
  • Half of all respondents indicated that the success of post-merger integration depends entirely or to a large extent on whether the two teams collaborate actively.
  • 50% of respondents indicated that one of the biggest challenges to maintaining effective communication with a target company is the target’s unwillingness to share critical information.

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