The route to growth: Industry consolidation in Asia Pacific

07 December 2016

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Executives in Asia-Pacific face a difficult decision as they contemplate growth strategies in 2016 and beyond: should they restructure or expand? While increasing M&A hints at the latter, management teams across the region agree that reorganizing their businesses and then consolidating within their respective industries will be necessary to strengthen their positions against economic volatility, financial strains and sector rivals.
In this exclusive report, The route to growth: Industry consolidation in Asia-Pacific, AlixPartners and Mergermarket analyze the trends, challenges and drivers shaping the corporate decision-making process today and into the years ahead.
Results from The route to growth show that:
  • Corporate Asia will grow in stages, utilizing performance improvement, corporate restructuring, and divestments in the short-term to achieve growth, and then following this up by consolidating within their primary industries.
  • Key industries are forecasted to consolidate to survive, including Asia Pacific’s information and communications technology, consumer goods, and shipping industries, all of which are expected to experience a wave of mergers within the next five years.
  • Troubling economic conditions will drive consolidation, with 54% of respondents saying current conditions are worse than 12 months ago and 29% saying they expect these conditions to worsen in the year ahead.

Crossing Over: Canadian Cross-Border Dealmaking

14 December 2016

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Canadian cross-border dealmaking has seen a steady uptick in recent years, particularly for outbound transactions. One prime example is the energy, mining & utilities sector, where falling prices and the rise of renewables are reshaping the industry, spurring further consolidation and causing companies to make tough decisions about how to face the future.
In order to gain an understanding of the trends and issues Canadian companies are facing in cross-border M&A, Citi commissioned Mergermarket to interview three experts for their thoughts.
Points of discussion include:
  • Will there be further consolidations involving Canadian energy firms trying to compete in North America?
  • What are the main drivers behind the continued flow of Canadian deals involving US banks, insurers, and wealth management funds?
  • Which factors will impact future Canadian cross-border M&A activity?
  • What sorts of challenges do Asian acquirers face in entering the Canadian market?

Taking Center Stage: M&A in Asia-Pacific

14 December 2016

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Dealmaking in the APAC region reached the second highest Q1-Q3 on Mergermarket record (since 2001). While activity from China has dominated the region recently, Australia has become the second largest APAC M&A market in 2016 by volume, due to its government pledging billions to overhaul transportation networks. India is also poised for a record-breaking year, with deal volumes up 80% from Q1-Q3 2015. Meanwhile, lending and outbound deals by Japan’s cash-rich corporates have been supported by negative interest rates. Overall, activity has been robust throughout Asia-Pacific and the expectation is that increased connectivity, especially among the ASEAN economies, will produce further deal flow in the coming months.
In order to explore M&A trends in the APAC region, Donnelley Financial Solutions in collaboration with Mergermarket is pleased to present Taking Center Stage: M&A in Asia-Pacific.
Key findings include:
  • The technology and industrial & chemicals sectors made up 40% of the APAC region’s total deal volume combined, and similarly provided 39% of deal values combined.
  • Japan saw robust domestic dealmaking with US$43.3bn — the highest combined deal value for the first three quarters of the year since 2012.
  • As the Southeast Asian economies continue to integrate, frontier markets in ASEAN are expected to yield a range of interesting and accessible targets.

Southeast Asia M&A: Trends shaping the region

15 December 2016

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Search publications All Region All Types All Sectors Search Southeast Asia M&A: Trends shaping the region Southeast Asia M&A: Trends shaping the region 15 December 2016 Download (2Mb) In a year marked by volatility and uncertainty across the globe, Southeast Asia has been dealt a mixed hand of challenges and opportunities, both testing the region’s ability to overcome increasingly difficult economic conditions and offering new pathways towards growth. In terms of mergers and acquisitions (M&A), the region posted 388 deals worth US$47.6bn in 2015. 2016 looks on track for a comparable finish in value, with Q1–Q3 2016 already seeing US$43.8bn from 281 deals.
Merrill Corporation, a global provider of secure content sharing, regulated communications and disclosure services, in close collaboration with Mergermarket, the leading independent M&A intelligence service, today released Southeast Asia M&A: Trends shaping the region, the second issue in a thought-leadership newsletter series. The publication includes an in-depth interview with Srividya Gopalakrishnan, Managing Director at Duff & Phelps, who presents a market update on investment trends in Southeast Asia, with insights on the ways of mitigating risks and maximizing investment potential in the region.
Highlights from Southeast Asia M&A:
  • Southeast Asia saw 322 inbound deals from Asia (ex Japan) worth US$44.8bn from 2011–Q3 2016.
  • Significant interest from Japan – accounting for 224 inbound deals worth US$31.6bn from 2011–Q3 2016 – as cash-rich corporates sought growth abroad in the face of a crowded and weak domestic consumer market.
  • Singapore is the region’s top target jurisdiction with 647 deals worth US$125.9bn from 2011–Q3 2016, and 83 deals worth US$15.2bn in Q1–Q3 2016. The nation-state also contributed to more than half the region’s outbound investment in Q1–Q3 2016, with 70 deals worth US$6.78bn.
  • Thailand overtook Singapore to become the top target jurisdiction for intraregional deals in Southeast Asia, recording US$9.9bn worth of deals from Q1–Q3 2016.
  • In private equity, Southeast Asia saw 27 buyouts worth US$5.8bn from Q1–Q3 2016.
  • How technological advancement, such as the use of virtual data rooms, expedites the due diligence and deal-making processes.

Monthly M&A Insider – December 2016

19 December 2016

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M&A activity in November decreased in both volume and value following October’s surprising burst of high-value dealmaking. With 1,098 deals worth a total US$223.5bn, November’s totals represented a 49.3% decrease on 176 fewer deals compared to last month. The energy, mining and utilities (EMU) sector provided one bright spot, however, with 83 total deals worth US$76.5bn — a 26.9% increase over November 2015. Meanwhile, North America achieved the third-best November on Mergermarket record while Japan reached its second-highest deal value for November in Mergermarket history.
Highlights from this report include:
  • US pipeline company Sunoco’s US$51.4bn move for rival Energy Transfer Partners was the only November deal to break the US$10bn threshold.
  • European M&A activity saw a sharp 81.8% drop in value during November, with 370 deals valued at US$34.5bn.
  • November saw US$27.6bn in outbound deals announced within the APAC region, representing a 389.5% increase from the same month last year.

Due diligence roadmap: Optimizing the sell-side

20 December 2016

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Sell-side due diligence has grown in popularity in recent years. Companies are increasingly seeing it as a way to improve their chances of impressing buyers while also boosting sales prices and reducing the potential for any slowdown in the transaction process.
Both buyers and sellers are beginning to recognize the value in sell-side diligence, which is why Donnelley Financial Solutions, in conjunction with Mergermarket, is pleased to present Due Diligence Roadmap: Optimizing the sell side, the third edition in a series. This report provides the key roles that sell-side diligence plays in preparing a company for a sale, finding a buyer, and lifting value.
Key findings include:
  • Companies are starting sell-side due diligence early. Seventy-two percent of respondents indicated that they started the process once a decision was made to sell the company or when the Confidential Information Memorandum was drafted.
  • Tax issues are a priority. Thirty-two percent of respondents named the tax situation of a company as the number one or two priority.
  • Sell-side due diligence can increase the value of a sale. Forty percent of respondents said that the most important benefit of carrying out sell-side diligence is the early identification of value critical issues.

A question of quality: How to improve SEC disclosure

21 December 2016

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Financial reporting has evolved in the 83 years since Congress passed the Securities Act of 1933, yet the SEC has been slow to adopt changes to corporate disclosure requirements. Progress is being made, however, through the “disclosure effectiveness” project started in 2013, which prompted a release regarding Regulation S-K in April 2016 and a proposal to eliminate overlapping provisions in July 2016. These efforts to revise disclosure requirements have led to debate among key stakeholders on the right way forward.
In order to understand how the reporting community is reacting to the SEC’s proposed changes, Vintage in collaboration with Mergermarket interviewed five industry professionals on their views.
Key topics discussed include:
  • How effective are the disclosure changes being proposed by the SEC?
  • How can disclosure reform help investors as well as filers?
  • What kinds of measures can companies take on their own?
  • Should there be a sustainability disclosure requirement?

Market Spotlight: 2017 M&A Outlook

22 December 2016

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Despite 2016 falling short of the M&A boom of last year, experts predict M&A activity to increase in 2017. Amid political uncertainty through the UK’s vote to break away from the European Union and the results of the US presidential election, 2016 produced a 20% year-over-year drop in global deal values. However, 2017 is expected to bring a bounce-back in activity, a competitive environment focused on technology, as well as challenges involving political upheaval and regulation.
In order to gain a further understanding of these trends and challenges that are expected to shape M&A dealmaking in 2017, Donnelley Financial Solutions commissioned Mergermarket to interview global dealmakers for their insights.
Key findings of this survey include:
  • 96% of respondents believe the US will be one of the top three countries/regions to see the biggest increase in M&A activity in 2017.
  • Fintech is the sector that will see the greatest increase in global M&A activity, as indicated by 36% of those surveyed.
  • 52% of respondents believe that sluggish growth in emerging markets will be one of the two biggest impediments to global M&A for 2017.

Mid-Market M&A: Dealmaking opportunities in 2017

03 January 2017

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Uncertainty looms over North American mid-market M&A activity for the year ahead amid sliding deal activity and worldwide political volatility. 2016 saw North American mid-market dealmaking decrease through Q3, declining 25% in volume and 19% in value, year-over-year. Despite this drop, however, private equity activity remained strong with 781 PE deals valued at US$1bn. Also, inbound mid-market M&A increased throughout the year, up 21% in North America from Q1-Q3. With a new year ahead, how will these trends continue to shape the market?
Mergermarket, on behalf of Firmex, a virtual data room provider, interviewed five experienced dealmakers to find out what they expect from North American mid-market M&A in 2017.
Points of discussion include:
  • Opportunities, challenges, and trends in the mid-market M&A landscape for 2017.
  • Will increased competition for targets affect private equity volume?
  • The growing role of private debt funds in the mid-market.
  • Analysis of the industrials, consumer, technology and healthcare sectors.

Divesting for growth

10 January 2017

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Divestments can be an important tool to develop value and propel an overall growth strategy. Whether driven by a need to realign a company’s core focus, rising asset valuations, or the impact of the greater digital transition of industry, market observers noted an uptick in divestments over the course of 2016.
As we head into 2017, how will this trend evolve? Toppan Vite, a trusted financial printing and communications company, in partnership with Mergermarket, asked four M&A experts to find out.
Points of discussion include:
  • How effective are divestments as part of a growth strategy?
  • Which elements in the market are driving recent divestment activity?
  • How is the pressure for digital transformation impacting the decision to divest?
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