Digging Deeper: Chinese cross-border mining M&A steals the spotlight

23 September 2016

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While the commodity super cycle may be a distant memory, China’s recent wave of cross-border resource acquisitions is helping to prop up global mining M&A. Indeed, the country has served as the only legitimate catalyst for deals since January 2015, closing 20 cross-border mining deals worth approximately US$8.3 billion, a 6% share of investment globally into the sector. The momentum continues in 2016 with several major offshore acquisitions announced by Chinese firms, particularly in emerging markets, signaling that a level of confidence is returning to the mining sector. Global law firm White & Case and Mergermarket are proud to present this exclusive thought leadership publication, Digging Deeper: Chinese cross-border mining M&A steals the spotlight, an update of market trends in the mining space and China’s resource ambitions.
Highlights from “Digging Deeper”:
  • Chinese mining companies closed 20 cross-border mining deals worth approximately US$8.3 billion since 2015, with three deals valued at US$4.2bn in H1 2016.
  • 40% of Chinese mining cross-border M&A has targeted Central and Southern Africa since 2015, followed by investments into North Asia (24%) and South America (18%).
  • Copper accounted for 38.3% of target resources by value, followed by iron ore (26.2%), niobium (18.2%) and gold (15.8%) since 2015.

Mid-Market M&A: Riding Out The Downturn

06 October 2016

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North American dealmaking has failed to reach the heights of the past two record-breaking years. This is particularly true for mega-deals. However, mid-market M&A has seen less of a drop-off. Strong deal flows can be seen in the energy, mining & utilities, financial services, healthcare and consumer sectors. The energy sector in particular leads the group with 202 deals made so far, valued at US$18.2bn. This brings about the question, why are middle market deals holding firm while bigger deals tumble?
Mergermarket, on behalf of Firmex, a virtual data room provider, interviewed five top dealmakers to discuss why mid-market conditions have been immune to the overall M&A slowdown.
Points of discussion include:
  • The effect of Brexit and the US presidential vote on North American mid-market M&A.
  • Mid-market deal flow strength in sectors such as consumer, healthcare, energy, and more.
  • Credit availability in various M&A segments.
  • An outlook into M&A for the remainder of 2016 and 2017.

Handling upheaval: The impact of Brexit and the US election on M&A

10 October 2016

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The Brexit referendum on June 23 kicked off a season of significant political events across the globe, including the unpredictable US election. As dealmakers gear up for the busy year-end period, how are these events affecting the M&A environment?
Toppan Vite, a trusted financial printing and communications company, in partnership with Mergermarket, asked five M&A experts to find out.
Points of discussion include:
  • What effect did the Brexit vote have on global and North American M&A?
  • How much of the decline seen in North American deal values is attributed to the uncertainty of an approaching presidential election?
  • How will the current political upheaval in the US and EU affect private equity in North American M&A over the coming 6-12 months?
See more and subscribe to Toppan Vite’s blog here.
Toppan Vite, a leader in financial printing, delivers a hassle-free experience for mission-critical content for capital markets transactions, financial reporting and regulatory compliance filings, investment companies and insurance providers. Part of the world’s largest printing company with over $13 billion in annual sales, we have the scale, financial strength and commitment to be the partner of choice for mission-critical transactions, any size, across the globe. Learn more at us.toppanvite.com

The Global Challenge Part 2: Practical considerations of Japanese business transformations and the impact on target companies

14 October 2016

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To view the Japanese version of the report, click here.
Baker & McKenzie and Mergermarket are proud to present a new report on the evolving and increasingly competitive business landscape for Japanese corporations and how these corporations can revisit their current cross-border M&A doctrines and make the necessary changes to engender change on a transformational and international scale. Faced with growing challenges in their domestic market, not least an aging and shrinking population amid global economic uncertainty and turbulence, Japanese companies are shifting towards a search abroad for growth. As a catalyst for this shift, Japanese corporations are using cross-border M&A to engender the kind of transformational change in operations and organizational structures needed not just to survive but thrive in today’s competitive corporate landscape.
Research commissioned by Baker & McKenzie, in collaboration with Mergermarket, has culminated in the report ‘The Global Challenge Part 2: Practical considerations of Japanese business transformations and the impact on target companies’. The second issue in a flagship thought-leadership series, the report trains its focus on post-merger integration, assessing the tactics used by Japanese businesses and their competitors in the United States and Europe in their pursuit of transformational change via cross-border M&A. Examining perspectives from the sell-side, the report identifies the most pressing issues when engaging in cross-border M&A and analyzes how Japanese corporations can turn these challenges into value opportunities that pave the way to more promising growth as global corporations.
Highlights from the report include:
  • The report underlines four main key areas that affect pre-deal success and post-deal integration – namely, managing corporate cultures, identifying and retaining talent, influencing the IT integration process, as well as addressing challenges and change opportunities during integration.
  • 64% of respondents at companies acquired by US/European corporations and 52% of those at targets acquired by Japanese corporations rated their recent business transformations as exceeding expectations and targets.
  • 68% of respondents at US/European-acquired targets rated the effectiveness of the talent retention program as very effective, compared to 59% of respondents at Japan-acquired targets.
  • 22% of respondents at targets acquired by Japanese corporations and 29% of those at targets acquired by US/European corporations agreed that combining IT platforms and systems created the most setbacks to the transformation process.
  • Integrating research and development (R&D) departments was a far greater challenge for companies acquired by Japanese buyers (26%) than their US/European counterparts (9%). Similarly, human resources was a larger problem area for the former group (22%) than for the latter (11%).

XBRL: Final disclosure

16 October 2016

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There is a new shift in reporting formats that could bring about greater transparency, lower costs, reduced risks, and higher quality data. The SEC recently announced it would allow US listed companies to use Inline eXtensible Business Reporting Language (or XBRL), a computer readable format, to file their quarterly and annual financial statements. This translates to companies no longer needing to file for the same information in two different formats, reducing complexity and the chances of errors.
In order to find out how XBRL format in financial reporting will affect US listed companies, Vintage commissioned Mergermarket to interview five industry experts and the U.S. Securities and Exchange Commission.
Points of discussion include:
  • The main benefits and challenges of using the new filing format.
  • How effective the SEC has been in implementing XBRL.
  • The possibilities of using the new format for broader applications and sectors.
  • The SEC’s perspective on XBRL’s future, response to critics on the format, and more

Shaping The Future: Trends In Digital Media And Frontier Technologies M&A

18 October 2016

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Growing Together: Collaboration Between Regional and Community Banks and Fintech

24 October 2016

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Banks are increasingly turning to fintech to satisfy customer expectations that banking services will be delivered on technology platforms such as phones and tablets. In order to better understand the dynamics between fintech providers and regional and community banks, Manatt, Phelps & Phillips, LLP (in partnership with financial intelligence firm Mergermarket) conducted a survey of C-level executives from the two groups. The results reveal high hopes for the future of collaboration between the two.
Banks see fintech as a way to enhance mobile capabilities, lower capital and operating costs and decrease technology expenditures. Fintech firms see working with banks as an opportunity to gain market credibility and access to the clients of midsized and smaller banks. Senior executives from private equity firms, venture capital funds and investment banks were also surveyed, and they expressed optimism about the potential for bank-fintech partnerships and acquisitions.
The survey findings are highlighted in the report “Growing Together: Collaboration Between Regional and Community Banks and Fintech.”
Four key takeaways that are useful to everyone in the banking and fintech sectors when approaching the challenges that come with collaboration include:
  • Banks are on board with fintech. At 81%, the overwhelming majority of regional and community banks are currently collaborating with fintechs. In addition, 86% of regional and community bank respondents said that working with fintech companies is “absolutely essential” or “very important” for their institution’s success.
  • Lower costs + a better brand = a win-win. For regional and community banks, enhanced mobile capabilities and lower capital and operating costs were highlighted as the benefits of collaborating with fintech companies. Fintechs named market credibility and access to customers in regional markets as the main benefits to partnering with banks.
  • Data security remains a challenge. Both banks and fintech companies are highly sensitive to the ways in which data is shared and secured. This means extra attention must be paid to cybersecurity when the two sides collaborate—especially given the cultural mismatch that can exist between them. Despite the optimism among banks for collaboration, preparedness is a large concern. Almost half of regional and community bank respondents said they are just “somewhat prepared” or even “somewhat unprepared” for this kind of partnership.
  • Regulatory concerns remain paramount. For banks and fintech firms, structuring relationships that are regulatory compliant, including, if required, prior regulatory approval, is critical to ensuring success and the opportunity to change the way financial services are ultimately delivered.

Dealmakers: Mid-market M&A in Asia-Pacific 2016

26 October 2016

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In the midst of economic uncertainty and volatility, dealmakers are taking a more cautious stance in valuations and dealmaking.
As a result of this, the Asia-Pacific deal market has seen fewer headline-grabbing megadeals and more deals in the mid-market (deals valued between US$10m and US$250m).
YTD 2016, mid-market deals make up 58% of Asia-Pacific deal volume and 22% of value, and have consistently contributed to more than half the deal count since 2011. This compares to global totals of 32% by volume and 13% by value.
Baker Tilly International’s exclusive thought leadership publication Dealmakers: Mid-market M&A in Asia-Pacific 2016, produced in collaboration with M&A intelligence provider Mergermarket, analyses the trends and opportunities shaping the mid-market space in Asia-Pacific. The report examines individual markets and the drivers of deal activity, looking ahead to what the rest of 2016 and early 2017 will hold.
Key highlights from Dealmakers: Mid-market M&A in Asia-Pacific 2016:
  • Asia-Pacific mid-market M&A has grown its share of the world’s mid-market total activity by 11% over the last five years, from 28% in 2011 to 39% in 2015.
  • In 2015, the Asia-Pacific mid-market saw 2,405 deals worth US$163.9bn completed, registering an 85.4% increase in value and a 71.9% increase in volume as compared to 2011. Activity in YTD 2016 is following a similar trend, having seen 1,147 mid-market deals worth US$78.5bn.
  • Sectors driving Asia-Pacific mid-market M&A from 2011 to YTD 2016 include industrials and chemicals (22% of total deal volume); technology, media and telecommunications (17% of total deal volume); and consumer (11% of deal total volume).
  • In 2015, Asia-Pacific posted 763 cross-border mid-market deals worth US$52.6bn, accounting for 32% of total mid-market volume and 32% of value in the region. YTD 2016, the region has seen 364 cross-border mid-market deals worth US$25.8bn, or 32% in volume terms and 33% by value.

The Growth Agenda: M&A in Europe, the Middle East and Africa 2016

27 October 2016

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Despite a slowdown in global M&A, deal pipelines for the EMEA region have remained active in 2016. Activity in Europe has decelerated in both value and volume following the UK’s Brexit referendum, leading to more cautious dealmakers. However, deals like SoftBank Group’s US$30.2bn acquisition of the UK’s ARM Holdings show signs of renewed confidence in the region. Also, the mid-market space, particularly within the industrial & chemicals and consumer sectors, is becoming dominant across regions such as Benelux, Italy, and France. In contrast to Europe, deal values in the Middle East and Africa rose, although overall volume decreased. This was due to big-ticket deals worth over US$1bn, coming mostly from Israel, South Africa and UAE.
In order to further explore in-depth M&A trends within Europe, the Middle East, and Africa, Donnelley Financial Solutions in collaboration with Mergermarket is pleased to present the first edition of The Growth Agenda: M&A in Europe, the Middle East and Africa 2016.
Key findings of this report include:
  • Overall deal volume in Europe was 13% lower in the first nine months of 2016 (4,336 deals), while deal values decreased by 16% (US$501.5bn in total) when compared to last year.
  • Deal values in the Middle East and Africa (MEA) spiked 125% to US$59.5bn in the first nine months of 2016 when compared to the same period in 2015, despite a 30% slowdown in volume.
  • While the US and the UK were the most active buyers in the MEA region, Germany and China are gaining momentum, with China alone accounting for one-third of total deal values in the region.


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