Canadian Oil & Gas 2017 Outlook

09 March 2017

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Market observers predict an increase for M&A in Canada’s oil & gas sector for 2017. Key drivers for sector activity include the search for new technologies to reduce costs and emissions as well as ongoing interest from E&P and private equity firms.
 
In order to examine the upcoming trends and opportunities within the Canadian oil & gas sector, Torys LLP commissioned Mergermarket to interview senior Canadian corporate executives and investment bankers for their insights.
 
Key findings from this report include:
 
  • More than half of respondents (54%) believe combined M&A value will also increase over the next 12 months.
  • 52% expect senior E&P companies to be the most active buyer group.
  • A majority of respondents (79%) identify the search for new technologies to create cost savings as a key driver of future M&A in the sector.
  • Dealmaking between Canada and the US remains a top priority, with 73% of respondents confirming this view.

Baltic M&A Monitor 2017

13 March 2017

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Mergermarket is pleased to present the Baltic M&A Monitor, in association with Ellex. This report provides a detailed look at M&A activity in Estonia, Latvia and Lithuania, along with forecasts for the year ahead. Consistent deal activity has characterised M&A in the Baltics in 2016. Deal volume across all three countries is up 24% year-on-year to 63 deals, the highest point in Mergermarket history. Value increased 17% to €716m over the same period. While this increase in value is more modest, it indicates renewed enthusiasm for M&A in the region. In 2016, investor confidence was high, and companies are actively pursuing growth through M&A.
 
Other highlights from the report include:
 
  • A number of sectors helped to support 2016’s activity, but TMT was the highest value sector, at €268m. When comparing combined figures from 2015 and 2016 with those from 2012 through to 2014, TMT’s share of activity rose from 12% to 14% by volume, and from 12% to 21% of total M&A by value – demonstrating the sector’s increased importance for Baltic M&A.
  • Baltic private equity performed well in 2016. There were 12 transactions with a total value of €40m, compared to ten deals valued at €11m in 2015. Activity was particularly pronounced in Estonia, where several PE investment cycles wound down in 2016.
  • Looking ahead, the Mergermarket Heat Chart, which logs ‘companies for sale stories’ for the past six months, shows that the consumer sector is generating the highest number of M&A targets (six), followed by energy, mining and utilities (five).

The New Deal: Driving insurance transformation with strategy-aligned M&A

15 March 2017

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The insurance industry is facing disruption in a variety of forms. New technologies, new competitors, new markets, new regulations, and changing consumer behaviors all offer tremendous opportunities and significant risk to the industry’s legacy business model. This has caused participants to reevaluate their business portfolio and change their strategic objectives, leading experts to conclude that the global insurance industry will soon face a wave of M&A.
 
To find out how this shift towards strategy-aligned M&A is influencing deal activity in the insurance industry, KPMG commissioned Mergermarket to interview 200 insurance M&A decision-makers across all segments and regions.
 
Key findings of this report include:
 
  • 84% of respondents plan to conduct 1-3 acquisitions in 2017, while 94% are looking to plan at least one divestiture.
  • Most insurers (62%) are either active or setting up corporate venture capabilities, with 26% of those with VC activities having more than US$1bn in allocated funding.
  • Transforming business and operating models are the main motivator for deals: 40% of insurance dealmakers plan to do so by way of partnerships and alliances, while 33% plan to undertake M&A.
  • Respondents believe that the top two regions that present the most acquisition opportunities for their company in 2017 are Asia-Pacific and North America.

Dealmakers: Mid-market M&A in Australia 2017

16 March 2017

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Mergermarket is pleased to present Dealmakers: Mid-market M&A in Australia 2017, published in association with Pitcher Partners. Total Australian M&A activity in 2016 closed 12% higher on the prior year, due mainly to a flurry of activity in the last quarter, despite global trends which saw a decline in deal activity of 4%. The nation’s mid-market saw a decline of 17%, with a strong finish towards the end of the year providing solid activity pipelines into 2017. This upswing in mid-market activity experienced in the last quarter of 2016 is expected to continue well into 2017. Current run-rates suggest deal volumes for the first half could be up by 30%-40% on 2016.
 
Key findings:
 
  • Top target sector: Leisure was the top mid-market target sector in the country for 2016, contributing to 17% of total mid-market deal volumes.
  • Top target state: New South Wales continued to be the top target state for the country’s mid-market M&A in 2016, contributing to 33% of total mid-market volume with 109 deals worth AU$5.7bn, though this proportion has shrunk from 37% for volume in 2015.
  • Cross-border deal flows: Inbound M&A occupied 35% of Australian mid-market deals in 2016, up from 33% in 2015, with the top bidder countries being the United States, China and the United Kingdom. Australia’s top target geographies for outbound mid-market M&A in 2016 were the United States, New Zealand and China, with acquirers being most interested in the TMT sector.
  • Industries to watch: Healthcare and fintech, spurred into action by optimism and consumer confidence inspired by low interest rates and cheap and readily available debt.

Prognosis positive: Pharma and biotech M&A outlook

20 March 2017

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Overall M&A activity in 2016 may have fallen short of 2015’s record highs, but dealmaking in the pharma and biotech sector remained consistent. Mid-market activity in this sector showed the most resilience last year, producing 98 deals among pharma and biotech companies in North America. Top targets included Derma Sciences at US$172m, Sentynl Therapeutics at US$171m, and Savara Inc. at US$115m. With deals already in the pipeline and a new year ahead, will the sector continue to hold its ground? Mergermarket, in association with Firmex, a virtual data room provider, interviewed four experienced dealmakers to find out the dynamics at play for North America’s pharma and biotech sector in the year ahead.
 
Points of discussion include:
 
  • What is driving the trend of buying early-stage companies and how long will it continue?
  • Is the decrease in the venture funding of life sciences companies related to the availability of venture dollars or a decline in worthy targets in the market?
  • What can the market expect from biotech IPOs in 2017?

North Asia M&A: Towards technological convergence

23 March 2017

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Click here for the Simplified Chinese version.
 
Mergermarket is pleased to present North Asia M&A: Towards technological convergence, published in association with Merrill Corporation.
 
Five years of roaring M&A growth may finally have found its ceiling as deal totals for acquisitions in North Asia settle into more modest territory, in a year marked by volatility and uncertainty across the globe.
 
At the close of 2016, North Asian deal values had dropped sharply from US$765bn in 2015 to US$533bn, a year-on-year decline of 30%, with a less noticeable drop of 3% in deal volume. Similar declining deal figures have become a feature of individual key economies across North Asia (China, Hong Kong, Macau, South Korea, Japan, Mongolia and Taiwan) as the market begins to steadily rebalance toward more sustainable growth rates.
 
Via an in-depth interview, Marshall Nicholson, Managing Director and Head of Equity Capital Markets at Nomura’s Asia ex-Japan Investment Banking Division, shares insights on charting a path towards deal success.
 
Key findings include:
 
  • Inbound declines: North Asia saw foreign inbound M&A continue on a two-year decline with only 180 transactions worth US$35bn in 2016, compared to 190 transactions worth US$41bn in 2015, registering declines of 15% by value and 5% by volume.
  • Outbound shopping sprees: Globally, China’s outbound acquisition push has reached new heights with 372 deals valued at US$208bn, an increase of 120% in deal value and 19% in deal volume. Japan’s appetite for outbound acquisitions remained strong in 2016, with 317 deals worth US$92.7bn, an increase of 4% by volume and 6% by value.
  • Top sectors: The industrials & chemicals and TMT sectors continue to buttress overall deal figures in North Asia, the two accounting for almost half of acquisition volumes and 40% of values.

Safe Secrets: Dealing With Data Privacy Issues In M&A

28 March 2017

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Data privacy is an important and complex factor to consider in every M&A deal. Concerns can include a lack of appropriate privacy controls on either side of the table, failure to understand the types of security programs being inherited, and specific regulations unique to different sectors or geographies. These issues, if not properly addressed in the early stages of negotiations, can delay and even determine the success of a deal.
 
In order to identify the security risks and vulnerabilities acquirers and targets face in M&A deals, Shearman & Sterling LLP, in association Mergermarket, is pleased to present Safe Secrets: Dealing With Data Privacy Issues In M&A.
 
Key discussions featured in this report include:
 
  • What are some of the most common data privacy concerns raised in M&A?
  • Which sectors pose the most complex issues?
  • How can privacy-related issues during due diligence influence the success of a deal and future integration?

Monthly M&A Insider – March 2017

29 March 2017

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January’s strong M&A record did not carry over its momentum into February as global deal values and activities fell for the month. Meanwhile, private equity buyouts and exits have slowed down when compared to the pace of Q1 2016. Energy, Mining & Utilities experienced the most activity for any sector but also faced a 27.1% decline in value.
The Consumer sector remained strong with deals such as UK-based Reckitt Benckiser’s US$17.8bn purchase of US baby formula maker Mead Johnson. Cross-border activity for February may have declined in terms of value, but still produced four out of the five top deals for the month.
 
Highlights from this report include:
 
  • February saw 843 deals valued at US$135.3bn, a 43.4% decline in value year-over-year and 591 fewer deals when compared to 2016′s 1,434 deals worth US$239.0bn.
  • The Energy, Mining & Utilities sector saw the most activity with 68 deals worth US$29.5bn, down 27.1% in value.
  • Deals in North America accounted for 56.5% of all global value, compared to 22.8% for European tie-ups and 11.2% for Asian deals (excluding those in Japan).

Market Spotlight: The New World of Energy M&A

30 March 2017

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Record dealmaking in the energy sector last year amounted to the second-highest total deal volume (1,141) and the third-highest total deal value (US$512.3bn) in history. This activity was due to a wave of consolidations as oil prices hovered around US$50 a barrel. Meanwhile, 437 transactions in the alternative energy space represented more than a third of the sector’s volume. With a solid year for M&A in the energy sector behind us, dealmakers expect that the 2017 market will continue to be just as robust.
In order to gain an understanding of the opportunities and challenges within the energy sector for 2017, Donnelley Financial Solutions commissioned Mergermarket to interview global dealmakers for their insights.
 
Key findings include:
 
  • More than 80% of respondents believe energy M&A will either increase significantly (20%) or somewhat (64%) over the coming year.
  • A majority of those surveyed (76%) say that North America will experience the most dealmaking (52%) or the second-most dealmaking (24%) in the energy sector.
  • Respondents see consolidation among oil & gas majors and distressed asset purchases by larger companies as the major drivers of energy M&A this year.
  • Companies in the exploration & production segment will see the most M&A activity in the coming 12 months, according to 60% of dealmakers.
For more energy M&A insights, join Donnelley Financial Solutions at the Energy Forum.

Volatility and opportunity: Energy M&A in Asia-Pacific

10 April 2017

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Energy M&A in Asia-Pacific may not have had a record year in 2016, but it was still one for the record books. While dropping 33% in year-on-year value terms, overall announced deals maintained pace with 2015 (196 deals), closing the year with 198 transactions valued at US$77.6bn.
 
Those amounts, despite the decline, were still the second highest annual totals, according to Mergermarket data spanning the past decade. Perhaps more importantly, M&A activity for the year points to the market’s resilience, especially in the oil and gas space where price volatility has plagued national and international oil companies over the past 30 months.
 
Key highlights include:
 
  • Top subsector: Renewable energy transactions—those involving wind, solar, hydro, and geothermal power—accounted for more than half of Asia-Pacific energy M&A transactions in 2016 (52%), increasing from a 44% volume share in 2015.
  • Top Asia-Pacific markets: China maintained its spot as the top market for Asia-Pacific energy M&A in 2016, accounting for 36% of deals and 31% of value. India had the second-largest year-end totals, accounting for 18% of deals and 22% of value, followed by Australia with 11% of deals and 20% of value.
  • Expert Q&A: In an exclusive interview, Eversheds partners Charles Butcher and Jae Lemin share insights on current geopolitical and economic trends shaping Asia-Pacific’s traditional and alternative energy markets.

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