A mergermArket report on globAl m&A Activity Monthly M&A ... · a provider of telecommunications...

Monthly M&A InsIderA mergermArket report on globAl m&A Activity

AUgUSt 2010

Monthly M&A InsIdermergermarket

GlobAl overvIew 01

AmericAS: lAtin AmericA 05

north AmericA 12

ASiA-pAcific 23

eUrope 34

middle eASt & AfricA 46

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CONTENTS

Monthly M&A Insider

global overview

01

global overview

Head of Research – elias latsis

Editor – rory McNeil

For advertising opportunities contact:

Erik Wickman

Tel: + (1) 212 6863329

[email protected]

Global overview: Tom Coughlan

Latin America: Mathew albert

North America: Jason Cozza

Asia-Pacific: Shunsuke okano and anita wong

Europe: Samuel Tedjasukmana and Damien Julliard

Middle East & Africa: Marie-laure Keyrouz and lars lundqvist

The top deal was announced in the Canadian industrials & Chemicals space with bHP billiton launching a US$41.91bn hostile takeover bid for Potash Corporation of Saskatchewan, the world’s largest fertiliser company by capacity. The outcome of the situation is uncertain after Potash’s board rejected bHP’s US$130.00 per share offer, claiming that it undervalues the company and does not reflect its future growth prospects. while bHP still has to convince Potash shareholders and Canadian antitrust regulators over the merits of the deal, the proposed tie-up would accelerate bHP’s entry into the fertiliser industry. Furthermore, Potash’s mining operations are thought to be a natural fit with the australian mining giant’s existing greenfield holdings in Saskatchewan.

interestingly, bHP’s bid for Potash is indicative of a wider trend that has seen a number of hostile offers announced in recent weeks. The european M&a market is also witnessing another ongoing high profile situation after Korea National oil Corporation moved to make a US$2.92bn bid for Dana Petroleum, the UK-based oil and gas exploration and production company. in total, a remarkable eight hostile bids have come to the market since the beginning of July, carrying an aggregate disclosed valuation figure of US$48.90bn. Put into context, the preceding 6 months of 2010 witnessed just 19 hostile situations, illustrating to good effect the recent marked uptick in activity.

outside of the corporate M&a sphere, it is also telling that private equity houses have also been busying themselves over the summer break. after months of predominantly scouring targets in the mid-market space, it seems that financial investors are increasingly eager to target sizeable firms in the public arena. indeed, four of the top five take privates of 2010 have been announced in July and august with all major regional M&a markets witnessing significant transactions, driven exclusively by North american investors on the buy-side.

Casting an eye to specific individual transactions, the largest take private deal currently stands as blackstone group’s US$4.85bn acquisition of Dynergy, the US-based provider of wholesale power, capacity and ancillary services. elsewhere, in a deal valued at US$4.77bn, the european market saw onex Partners and Canadian Pension Plan investment board take private UK engineering firm Tomkins. US private equity heavyweights Carlyle group and TPg Capital have also been acquisitive in recent weeks with the firms acquiring Healthscope, the listed australia-based hospitals operator, via a cash scheme of arrangement. valued at US$2.35bn, the deal stands as the largest private equity buyout announced in the asia-Pacific region so far in 2010.

by Tom Coughlan, Remark, The Mergermarket Group

GLobAL ovERvIEW

THe ToP eND oF THe global M&a MarKeT HaS SeeN SigNiFiCaNT aCTiviTy iN reCeNT weeKS wiTH a NUMber oF HigH ProFile TraNSaCTioNS aNNoUNCeD. NoTably, Two oF THe THree largeST DealS oF 2010 Have CoMe To MarKeT SiNCe THe begiNNiNg oF JUly, iNDiCaTiNg THaT CaSH-riCH CorPoraTe aND PrivaTe eqUiTy bUyerS Feel iNCreaSiNgly well PlaCeD To MaKe a reTUrN To broKeriNg large-CaP M&a.

Monthly M&A Insider 02

globAl overvieW

TrEND graPHS

GlobAl M&A quArterly trend

valUE vOlUME

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Q310*

Q210

Q110

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Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

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Q104

Volu

me

of d

eals

GlobAl M&A quArterly MId-MArket trend

valUE vOlUME

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

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Q306

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Q106

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Q305

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Q105

Q404

Q304

Q204

Q104

Valu

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S$m

)

0

500

1,000

1,500

2,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

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Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

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Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

Moving average trend line


globAl overvieW

TrEND graPHS

GlobAl M&A seCtor breAkdown ytd 2010

valUE vOlUME

9.4%

6.4%

16.9%

11.4%

3.2%

1.4%

1.8%

1.0%0.5%3.3%

10.7%

23.6%

10.4%

Industrials & Chemicals

TMT

Consumer

Business Services

Energy, Mining & Utilities

Financial Services

Pharma, Medical & Biotech

Construction

Leisure

Transportation

Real Estate

Agriculture

Defence


TMT

Consumer

Business Services


Financial Services


Construction

Leisure

Transportation

Real Estate

Agriculture

Defence

12.3%

14.9%

18.0%

4.1%

3.5%

2.2%

2.9%

0.5%1.3%

10.8%

10.6%

11.4%

7.5%

GlobAl M&A quArterly PrIvAte equIty trend

valUE vOlUME

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Q310*

Q210

Q110

Q409

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Q109

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Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

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Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

Global buyouts

Global exits

0

100

200

300

400

500

600

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Q310*

Q210

Q110

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Q408

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Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

Global buyouts

Global exits


globAl overvieW

TrEND graPHS

GlobAl M&A deAl sIze breAkdown

valUE vOlUME

0

500

1,000

1,500

2,000

2,500

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> US$501m

US$251m-US$500m

US$101m-US$250m

US$15m-US$100m

US$5m-US$14.9m

Valu

e (U

S$bn

)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> US$501m

US$251m-US$500m

US$101m-US$250m

US$15m-US$100m

US$5m-US$14.9m

Value not disclosed

Num

ber

of d

eals

LATIN AM

ERICA

LATIN AMERICAA MERgERMARkET M&A REpoRT oN


Months of tough negotiations and even threats of arbitration to dissolve the JV ended when the portuguese government – which enjoys de facto veto power over such plays as a bearer of golden shares in pT – finally relented, allowing the telco to accept Telefónica’s revised bid of US$9.75bn. While the portuguese government blocked the deal on the grounds the asset and presence in the Brazilian market was strategically important for pT, company shareholders were not so averse to accepting the handsomely priced bid, which is almost a third higher than the initial offer price in May and roughly 11 times expected EBITDA.

Telefónica, the largest telco by market capitalisation in the Eurozone, will now move to buyout Vivo’s minority free float shareholders and integrate the mobile operator with Telesp, Telefónica’s fixed line business headquartered in São paulo. The merger will grant Telefónica ‘undisputed leadership of the Brazilian telecommunications markets,’ according to a press release by the firm.

Clearly, such a feat has not gone unnoticed by pT. The company is moving straight back into the dealmaking fray with a US$4.80bn investment for a 22.40% stake in oi, another leading Brazilian telco. According to mergermarket intelligence, oi may use proceeds from the sale to expand its presence elsewhere in Latin America.

It is not surprising that Telefónica and pT are set on staying in the region. Latin America has been a hot spot for overseas investors eager to offset languid business activity in home markets blighted by recession and sluggish recoveries. For instance, Banco Santander struck such a deal with Bank of America in June to acquire the 24.90% stake in Mexico-based grupo Financiero for US$2.50bn not already owned by the Spanish banking group.

Brazil, especially, has been a key investment destination for buyers sourcing transactions in the region. The country has an amazing growth story – gDp is expected to grow by some 7.0% in 2010 – and its long-term prospects make it strategically important for multinational corporate groups such as Telefónica to gain a presence. And with large-scale investments needed to gain a sizable foothold in the market, prospects for deal flow in the large-cap transaction space remain bright.

IN JULy, ThE LATIN AMERICAN M&A MARkET SAW oNE oF ThE MoST FRAUghT AND DRAWN-oUT DEALS oF RECENT TIMES WRAppED Up. ThE TRANSACTIoN, ThE SECoND LARgEST BRokERED IN ThE REgIoN ThIS yEAR, SAW SpANISh TELECoMS gIANT TELEFóNICA BRokER A DEAL To ACqUIRE poRTUgAL TELECoM’S (pT) 50.00% STAkE IN JoINT VENTURE BRASILCEL, A hoLDINg CoMpANy WITh A CoNTRoLLINg INTEREST IN BRAzIL’S LARgEST WIRELESS opERAToR VIVo.

06

LATIN AM

ERICA

Monthly M&A Insider

Target: Brasilcel NV (50.00% stake) Announced: 28-Jul-10

Bidder: Telefonica SA Deal value: US$9.75bn

Seller: portugal Telecom SgpS SA Deal nature: Acquisition, Cross-border, private

STRUCTURE• Telefonica, S.A. has signed a definitive agreement to

acquire a 50.00% stake in Brasilcel, N.V. from portugal Telecom, SgpS, S.A.

• Brasilcel, N.V., the Netherlands-based company headquartered in Amsterdam, is a holding company and a provider of telecommunications services with a special focus on the Brazilian market.

• portugal Telecom, SgpS, S.A., the listed portugal-based company headquartered in Lisbon, is a global telecommunications company engaged in fixed-line and mobile telephone services, as well as in data and multimedia services.

TERMS

• This transaction has an implied equity value of €15.00bn.

• of the purchase price, €4.50bn will be paid on closing, €1.00bn will be paid on 30 December 2010 and the remaining €2.50bn will be paid no later than 31 october 2011.

• The net present value of the consideration is €7.30bn.

• The acquired 50.00% stake in Brasilcel brings Telefonica’s total stake holding in the target company to 100.00%.

• Telefonica is to pay portugal Telecom a total consideration of €7.50bn for the 50.00% stake in Brasilcel.

RATIONALE

• This acquisition is in line with Telefonica’s strategy to obtain a leadership position in the telecommunications market in Brazil.

• Telefonica plans to combine Vivo participacoes, S.A., the listed Brazil-based provider of cellular telecommunications services, which is approximately 60.00% owned by Brasilcel (directly or indirectly), with Telesp, the Brazil-based telecommunications company, which is owned by Telefonica.

• This will create the largest integrated operator in Brazil by the number of customers and turnover.

CONDITIONS

• Regulatory approval in Brazil.

EXPECTED COMPLETION

• The transaction is expected to close within the next 60 days.

DEAL oF ThE MoNTh

Advisers

Target/Seller Bidder

Financial Morgan StanleyBanco Espirito Santo de InvestimentoBank of America Merrill Lynch

Financial SgUBS Investment Bank

Financial Skadden Arps Slate Meagher & Flomgarrigueshouthoff Buruma

Legal Uria MendendezDe Brauw Blackstone WestbroekCuatrescasas, goncalves pereira

mergermarket/dealReporter Intelligence

28-Jul-10 pT/Vivo: No extraordinary dividend seen in the short-term

27-Jul-10 portugal Telecom needs to materialise cross-shareholding deal with oi before it can revisit Vivo deal with Telefonica

22-Jul-10 pT should sell Vivo to prevent hostile bid, shareholder says

21-Jul-10 Vivo: TEF could acquire control after Brasilcel dissolution - analysis

16-Jul-10 Vivo: Telefonica deadline extension possible pending talks

15-Jul-10 Vivo: portugal wants pT to stay in Brazil; TI stake offered

8-Jul-10 Vivo: Neither party pushing for new EgM

07

LATIN AM

ERICA

Monthly M&A Insider

TOP 15 LATIN AMERICAN ANNOUNCED DEALS YTD 31 JULY 2010Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia

1-day beforeDeal value

(US$m)Revenue EBITDA P/E

13-Jan-10 C Carso global Telecom SAB de CV

TMT America Movil SA de CV 1.7 4.9 14.4 3.1% 28,055

28-Jul-10 p Barsilcel NV (50.00% stake)

TMT Telefonica SA portugal Telecom SgpS SA

- 9,746

11-Jan-10 C FEMSA Cerveza SA de CV

Consumer heineken NV Fomento Economico Mexicano SAB de CV

- 7,692

13-Jan-10 C Telmex Internacional SAB de CV (39.30% stake)

TMT America Movil SA de CV 2.6 10.6 23.6 2.2% 6,533

2-May-10 p Alumina do Norte do Brasil SA (57.00% stake); Aluminio Brasileiro SA (51.00% stake); Companhia de Alumina do para (61.00% stake); and paragominas bauxite mine (60.00% stake)


Norsk hydro ASA Vale SA - 4,900

22-Jan-10 C polibutenos SA Industrias quimicas (33.33% stake); quattor participacoes SA (60.00% stake); and Unipar Comercial e Distribuidora SA


Braskem SA Uniao de Industrias petroquimicas SA

- 4,238

27-Jan-10 C Bunge participacoes e Investimentos SA


Vale SA Bunge Limited - 3,800

14-Mar-10 p Bridas Corporation (50.00% stake)


CNooC International Limited

Bridas Energy holdings Ltd

- 3,100

9-Jun-10 p grupo Financiero Financial Services

Banco Santander Bank of America Corporation

n/a n/a n/a - 2,500

3-May-10 p Agre Empreendimentos Imobiliarios SA

Real Estate pDg Realty SA Empreendimentos e participacoes

n/a n/a 13.8 1.5% 1,955

15-Jul-10 p BAC Credomatic gECF

Financial Services

grupo Aval Acciones y Valores SA

gE Capital global Banking

n/a n/a n/a - 1,900

10-Feb-10 C Fertilizantes Fosfatados SA (36.79% stake)


Vale SA The Mosaic Company; and yara Brasil Fertilizantes SA

7.2 - 1,834

18-May-10 p plena Transmissoras SA (Seven Brazilian transmission companies)


State grid Corporation of China

plena Transmissoras SA

- 1,721

15-Feb-10 p Comunicaciones Nextel de Mexico SA de CV (30.00% stake)

TMT grupo Televisa SA de CV NII holdings Inc - 1,440

18-May-10 p Itau Unibanco holding SA (2.50% stake)

Financial Services

Itausa - Investimentos Itau SA

Bank of America Corporation

n/a n/a 15.0 27.7% 1,115

C = Completed; p = pending; L = Lapsed Source: mergermarket

Top DEALS & ExpECTED DEALS

LATIN AM

ERICA



TOP 5 LATIN AMERICAN ANNOUNCED DEALS OF ThE MONTh (JULY 2010)Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia



28-Jul-10 p Barsilcel NV (50.00% stake)

TMT Telefonica SA portugal Telecom SgpS SA

- 9,746

15-Jul-10 p BAC Credomatic gECF Inc

Financial Services

grupo Aval Acciones y Valores S.A

gE Capital global Banking

n/a n/a n/a - 1,900

22-Jul-10 p Sistema Educacional Brasileiro SA (Learning systems division)

Business Services

pearson plc Sistema Educacional Brasileiro SA (Shareholders)

- 498

19-Jul-10 C Lojas Maia Ltda Consumer Magazine Luiza SA 0.5 - 164

29-Jul-10 p Medidata Informatica SA (79.70% stake)

TMT eLandia International Inc Amper SA - 66


PIPELINE OF EXPECTED DEALS Situation Target

companySector Potential bidder

companyFinancial adviser to bidder (B); target (T); seller (S)

Seller company Market cap/ est. value (US$m)

Comments

Auction Aguas Nuevas


Macquarie Capital, Morgan Stanley Infrastructure or Marubeni

Banco Santander US$350m Banco Santander is negotiating with a few buyers on the sale of Aguas Nuevas, the Chilean utility, and it is close to sealing a deal, said a source close to the situation. In February, Banco Santander sent out an information memorandum on Aguas Nuevas and bids were expected the following month, as previously reported by this news service. Likely buyers are infrastructure funds such as Macquarie Capital and Morgan Stanley Infrastructure, as also previously reported. A published report in December 2009 tagged Japanese conglomerate Marubeni as a potential buyer. The source could not comment on a potential deal value, but it has been reported that Aguas Nuevas could be worth US$350m. The utility has 356,000 customers and an 8.8% share of the Chilean water market. Santander Infrastructure Fund II, which specialises in infrastructure assets, acquired the Chilean utility last year from grupo Solari.

Rumoured takeover target

Express de Santiago Uno

Transportation grupo Rios US$34m (target revenue)

It was reported that grupo Rios, the Colombia-based conglomerate, is in talks to acquire Chilean mass transportation company Express de Santiago Uno. According to the article, sources say grupo Rios is currently restructuring the conglomerate's management and is preparing a strategy to spur growth in Chile through acquisitions. It also states that the group is already in advanced negotiations and, following the deal, may seek to merge Express de Santiago Uno with Alsacia, its mass transportation subsidiary Express Santiago Uno, the operator of the Troncal 4 bus line, which has annual revenues of US$34m.

Expected deals based on confirmed announcements by companies involved

09

LATIN AM

ERICA

Monthly M&A Insider

LEAgUE TABLES

VALUEYTD

31-Jul-10house Value

(US$m)Deal count

1 Credit Suisse 59,211 22

2 Citigroup 48,690 7

3 Bank of America Merrill Lynch 23,728 13

4 Morgan Stanley 16,111 6

5 UBS Investment Bank 10,768 7

6 Banco Espirito Santo de Investimento 9,836 3

7 Sg 9,746 1

8 Rothschild 9,761 8

9 Allen & Company 9,132 2

10 Jp Morgan 8,343 9

11 Deutsche Bank 6,855 6

12 Santander global Banking and Markets 4,338 4

13 Banco Bradesco 4,254 3

14 goldman Sachs 3,209 5

15 hopu Investment Management Co 3,100 1Source: mergermarket

VoLUME

The financial advisor league tables by value and volume have been run from 1 January 2010 to 31 July 2010 and exclude lapsed and withdrawn deals. The tables cover all sectors andare based on the geography of either the target, bidder or seller being Latin American-based.

YTD 31-Jul-10

house Value (US$m)

Deal count


2 Bank of America Merrill Lynch 23,728 13

3 JpMorgan 8,343 9

4 Rothschild 9,671 8






10 hSBC Bank 2,576 5

11 Crdit Agricole CIB 1,916 5

12 Santander global Banking and Markets 4,338 4

13 Lazard 1,715 4

14 patria-Banco de Negocios 1,049 4

15 Banco Espirito Santo de Investimento 9,836 3Source: mergermarket

TOP 15 FINANCIAL ADVISORS – LATIN AMERICA

VALUEYTD


(US$m)Deal count

1 Dewey & LeBoeuf 34,628 3

2 Skadden Arps Slate Meagher & Flom 18,938 7

3 Allen & overy 14,742 3

4 Cleary gottlieb Steen & hamilton 14,567 6

5 Freshfields Bruckhaus Deringer 12,592 2

6 Uria Menendez 11,548 6

7 Cuatrecasas, goncalves pereira 9,746 3

8 De Brauw Blackstone Westbroek 9,746 1

9 garrigues 9,746 1

10 houthoff Buruma 9,746 1

11 Simpson Thacher & Bartlett 9,495 6

12 gibson Dunn & Crutcher 8,321 3

13 Davis polk & Wardwell 8,300 5

14 Loyens & Loeff 7,692 1

15 Latham & Watkins 6,800 4Source: mergermarket

VoLUME

The legal advisor league tables by value and volume have been run from 1 January 2010 to 31 July 2010 and include lapsed and withdrawn deals. The tables cover all sectors andare based on the geography of either the target, bidder or seller being Latin American-based.

YTD 31-Jul-10

house Value (US$m)

Deal count

1 Mattos Filho, Veiga Filho, Marrey Jr. e quiroga Advogados

1,716 13

2 Machado Meyer Sendacz e opice 4,187 11

3 Tozzini Freire Teixeira E Silva Advogados 5,786 10

4 pinheiro Neto Advogados 3,591 10

5 Estudio Muniz, Ramirez, perez-Taiman & olaya Abogados

466 9

6 Barbosa, Mussnich & Aragao 5,395 8


8 Cleary gottlieb Steen & hamilton 14,567 6

9 Uria Menendez 11,548 6


11 Demarest e Almeida 1,257 6


13 Linklaters 1,284 5

14 Latham & Watkins 6,800 4

15 pinheiro guimaraes Advogados 3,873 4Source: mergermarket

TOP 15 LEgAL ADVISORS – LATIN AMERICA

10

LATIN AM

ERICA

Monthly M&A Insider

TREND gRAphS

LATIN AMERICAN M&A qUARTERLY TREND

VALUE VoLUME

0

10,000

20,000

30,000

40,000

50,000

60,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q4 05

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

25

50

75

100

125

150

175

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals


LATIN AMERICAN M&A qUARTERLY MID-MARkET TREND

VALUE VoLUME

0

1,000

2,000

3,000

4,000

5,000

6,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

20

40

60

80

100

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

11

LATIN AM

ERICA

Monthly M&A Insider

TREND gRAphS

LATIN AMERICAN M&A SECTOR BREAkDOwN YTD 2010

VALUE VoLUME

10.0%

10.2%

17.1%

0.7%0.8% 1.9%

0.1%2.4%

0.7%

46.9%

8.2%

1.1%


Consumer


Financial Services

Business Services

TMT

Leisure

Agriculture


Transport

Real Estate

Construction

15.7%

19.9%

0.9%0.9%

2.8%5.1%

5.1%

10.2%

11.6%14.4%

5.6%

7.9%


Consumer


Financial Services

Business Services

TMT

Leisure

Agriculture


Transport

Real Estate

Construction

LATIN AMERICAN M&A qUARTERLY PRIVATE EqUITY TREND

VALUE VoLUME

0

3

6

9

12

15

Q3 10*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

Latin American buyouts

Latin American exits

0

500

1,000

1,500

2,000

2,500

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

Latin American buyouts

Latin American exits

NORTH

AMERICA

NORTH AMERICAA MERgERMARkET M&A REpORT ON

12Monthly M&A Insider

It should be noted that the volume of buyout deals did not expand at the same rate as the value of the deals themselves. The first half of 2010 had 281 buyout transactions during the first half of 2010; a 19.0% increase over the 228 deals witnessed during the same period last year.

The average North American buyout deal size is at the highest level it has been in three years. Q3 2007 had an approximate average buyout deal value size of US$288 and although the average is distant from 2007’s second quarter high of US$707m, the increase compared to last year is a sure sign that access to capital is returning because investors are willing to take on higher valued targets.

Avis antitrust case more challenging than HertzAvis Budget may face a more challenging antitrust review to acquire Dollar Thrifty than rival bidder Hertz based on the firms’ proposed divestitures, sources said.

During the last week of July, Avis announced a formal rival bid for Dollar Thrifty that is 7.0% higher than Hertz’s existing US$2.20 bid for the car rental company. In a merger document filed with the SEC, Avis proposed airport location divestitures representing US$325m in global revenue, including US$250m worth of divestitures earmarked for the US.

The Federal Trade Commission is running a concurrent antitrust review of Avis and Hertz’s bids. A source familiar with the reviews said he does not expect the FTC to be in a position to advise either company on the status of their respective approaches before September at the earliest.

A second source following the duelling bids said that the government may place a 40.0% ceiling on market share at airport locations on the company that acquires Dollar Thrifty. This requirement would require more drastic divestitures than already outlined, the source said.

The first source said Avis’s proposed US$325m in revenue divestitures may be part of a larger divestiture plan the company has yet to make public, given the scrutiny both parties are expecting from the review and the concentration Avis already has in the leisure car rental market.

Hertz has proposed the divestiture of its Advantage brand, which contributed US$140m in revenue to the company in the most recent financial year, in addition to business lines that generate US$175m of revenue. The second source said Hertz’s decision to divest the brand may give it a leg up over Avis, which has just publicly proposed to divest airport locations.

A separate person briefed on matter pointed out that Avis has not put any restrictions on the location and profitability of the airport locations it is willing to divest, while Hertz has been prescriptive in its divestiture plan by earmarking the Advantage brand.

Still, the two sources and an industry banker said the concentration of the car rental industry generally is likely to make it uncertain whether the FTC will allow either Hertz or Avis’s bids to go through.

The second source said the FTC will consider the higher pricing environment in the rental market since Enterprise Rent-A-Car’s acquisition of National and Alamo in 2007 as rationale to consider blocking either deal or requesting further remedies than the ones already proposed.

Both rival rental car companies have a presence in the leisure market where Dollar Thrifty’s business is focused; however, Avis is the only bidder with an established leisure brand in the form of Budget.

Overall, Avis derived approximately 60.0% of its revenue from leisure customers in 2009, while Hertz derived 57.0% of its revenues from the leisure segment in the same period, according to the respective companies’ most recent 10-k filings.

NortH AMerIcAN Buyouts INcreAse IN DeAl VAlue

WITH AppROxIMATEly 44 BUyOUT TRANSACTIONS vAlUED OvER US$9.20BN, NORTH AMERICA HAD AN AvERAgE BUyOUT DEAl vAlUE OF US$210M FOR THE MONTH OF JUly. THIS IS A SlIgHT INCREASE OvER THE SECOND QUARTER FIgURE OF US$203M, AND A SIgNIFICANT BOOST FROM Q1 2010 WHICH HAD AN AvERAgE vAlUE OF ONly US$69M. FOR THE SAME pERIOD IN 2008, NORTH AMERICAN BUyOUT’S HAD AN AvERAgE DEAl vAlUE OF US$78M.

13

NORTH

AMERICA

Monthly M&A Insider

target: Hewitt Associates Inc Announced: 12-Jul-10

Bidder: Aon Corporation Deal value: US$4.49bn

seller: Deal nature: Acquisition, Domestic, public

structure• Hewitt Associates, Inc. (HEW), a Delaware corporation,

have signed a definitive agreement to be acquired by Aon Corporation (AON), a Delaware corporation. The boards of directors of both companies have approved the merger.

• Hewitt Associates, a US-based company headquartered in lincolnshire, Il, provides human resources benefits, outsourcing, and consulting services primarily in the US and the United kingdom.

• Aon, a US-based company headquartered in Chicago, Il, is the leading global provider of risk management services, insurance and reinsurance brokerage, and human capital consulting.

terMs• US$25.61 and 0.6362 AON shares will be exchanged for

each HEW share.

• This represents a value of US$50.00 for each HEW share based on AON’s closing share price on 9-Jul-10 of US$38.34.

• The offer provides a premium of 41.2% based on HEW’s closing share price on 9-Jul-10 of US$35.40.

• The implied equity value of the transaction is approximately US$4.60bn.

• If a superior offer were to emerge for HEW, the company would be required to give AON at least 5 business days to make adjustments to its current offer before HEW’s board of directors could effect a change of recommendation of the deal.

FINANcING• Financing commitments from Credit Suisse and Morgan

Stanley for 100% of the cash consideration are in place for a three-year US$1.00bn bank term loan and a US$1.50bn bridge loan facility.

• Aon expects to issue unsecured notes prior to drawing on the bridge loan facility.

rAtIoNAle• Aon believes the combination of Aon and Hewitt creates

a global leader in human capital solutions, benefitting clients, associates and stockholders. The combined client base and product portfolio will provide significant cross-sell opportunities. The transaction is expected to generate approximately US$355m in annual cost savings across Aon Hewitt in 2013, primarily from reduction in back-office areas, public company costs, management overlap and leverage of technology platforms.

coNDItIoNs • HSR (US)

• EC (Europe)

• CA (Canada)

• ICA (Canada)

• HEW EgM (majority affirmative vote required to approve)

• AON EgM (majority affirmative vote required to approve)

eXPecteD coMPletIoN • The transaction is expected to close in mid-November

of 2010.

terMINAtIoN DAte • The termination date for the transaction is 31 March 2011.

terMINAtIoN Fee • Hewitt must pay Aon a termination fee of US$85m or

US$190m, as applicable. This represents 1.8% or 4.1% of the implied equity value of the deal. The per-share increase required to cover the fee in a superior offer would be US$0.92 or US$2.05.

• If the Merger Agreement is terminated under certain other specified circumstances, Aon must pay Hewitt a termination fee of US$190m or, if the Merger Agreement is terminated under certain specified circumstances relating to Aon’s failure to obtain the requisite financing for the Merger, a termination fee of US$225m.

DEAl OF THE MONTH


NORTH

AMERICA

DEAl OF THE MONTH

Advisors

target/seller Bidder

Financial Citigroup Financial Credit Suisse

legal Shearman & Sterling (Advising Ctigroup); Debevoise & plimpton; paul Weiss Rifkind Wharton & garrison

legal Davis polk & Wardwell (Advising Credit Suisse);Sidley Austin

exit multiples – y/e 30-sep-09 Premium analysis

Multiples Value (us$m) offer price per share (us$) 50.00

revenue 1.5 x 3,073 1 day before 41.24%

eBItDA 7.5 x 599 1 month before 41.44%

eBIt 10.3 x 434 1 day after 4.69%

earnings 18.0 x 262 Pre-rumour -

mergermarket/dealreporter Intelligence

28-Jul-10 Hewitt: Aon launches loan syndication, source says

13-Jul-10 Hewitt/Aon finance timing linked to shareholder vote, source says

timetable and expected events

regulatory Date Notes

HSR (US) 23-Aug-10 30 calendar days waiting period; further 30 calendar days following compliance with the request for additional information; filed on 23-Jul-10

CA (Canada) Refers to Competition Act of Canada, 14 calendar days for short form application, 42 calendar days for long form application

ICA (Canada) Refers to Investment Canada Act, 45 calendar days initial investigation; can be extended by further 30 calendar days

EC Notification (Europe) Refers to approval by the European Commission; 25/35 trading days for phase-1 decision, further 90 trading days if referred to phase-2

Last date for Art. 9/Art. 22 request

15 trading days from EC notification

Last day for remedies within phase 1

20 trading days from EC notification, will cause 10 trading day extension if remedies submitted

Art. 9/Art. 22 decision 10 trading days from request

EC Decision 25 trading days from notification standard

offer timetable

Plan of merger 12-Jul-10 Refers to plan of merger filed with SEC Form 8-k

Debt commitment letter 12-Jul-10 Refers to debt commitment letter filed with SEC Form 8-k

Prelim proxy 26-Jul-10 Refers to preliminary proxy statement filed with SEC, reviewing process typically lasts at least 30 calendar days, and can be as long as 60 calendar days S-4

Termination date 31-May-11 Refers to date by which merger must be completed before agreement must be amended

Def proxy Refers to definitive proxy statement declared effective by SEC

Effective date Refers to date merger becomes effective, normally 2 trading days after EgM approval

Settlement date Refers to date payment can be expected by, normally within 4 business days of Effective Date in state of Delaware

company events

HEW 3Q-10 5-Aug-10 Refers to third quarter 2010 earnings

AON EGM record date 16-Aug-10 Refers to date shares must be held by in order to vote at the EgM

HEW EGM record date 16-Aug-10 Refers to date shares must be held by in order to vote at the EgM

HEW EGM 20-Sep-10 Refers to approval of merger by target's shareholders; majority affirmative vote required to approve; normally 1 month from def proxy

AON EGM 20-Sep-10 Refers to approval of merger by bidder's shareholders; majority affirmative vote required to approve; normally 1 month from def proxy

15

NORTH

AMERICA

Monthly M&A Insider

toP 15 NortH AMerIcAN ANNouNceD DeAls For ytD 31 July 2010 Announced status target company sector Bidder company seller company exit multiples (x) Bid premia


(us$m)revenue eBItDA P/e

22-Apr-10 p Qwest Communications International Inc

TMT Centurylink 1.8 5.2 15.9 15.0% 22,153

8-Mar-10 p American life Insurance Company

Financial Services

Metlife American International group

n/a n/a - 15,544

25-Feb-10 p Coca-Cola Enterprises Inc (North American operations)

Consumer The Coca-Cola Company

Coca-Cola Enterprises

- 12,280

21-Feb-10 p Smith International Inc Energy, Mining & Utilities

Schlumberger limited

1.5 12.7 67.4 18.1% 12,198

19-Jan-10 C The Williams Companies Inc (certain gas pipeline and domestic midstream businesses)


Williams partners The Williams Companies

- 11,750

11-Feb-10 p Allegheny Energy Inc Energy, Mining & Utilities

FirstEnergy Corp 2.6 7.5 12.0 31.6% 8,960

9-Mar-10 p Merial limited; and Intervet/Schering-plough Animal Health

pharma, Medical & Biotech

Merial-Intervet Merck & Co; and Sanofi-Aventis SA

- 8,250

28-Apr-10 p E.ON US llC Energy, Mining & Utilities

ppl Corporation E.ON Ag - 7,625

11-Mar-10 p Devon Energy Corporation (Assets in the deepwater gulf of Mexico, Brazil and Azerbaijan)


Bp plc Devon Energy Corporation

- 7,000

11-Feb-10 p Airgas Inc Industrials & Chemicals

Air products & Chemicals

1.8 10.8 27.1 3.6% 6,834

28-Feb-10 C Millipore Corporation pharma, Medical & Biotech

Merck kgaA 4.1 16.3 34.0 13.3% 6,760

31-Mar-10 p general growth properties Inc (65.00% Stake)

Real Estate Brookfield Asset Management; Fairholme Capital Management llC; and pershing Square Capital Management

n/a n/a [loss] -7.5% 6,550

14-Jun-10 C QEp Resources Inc Energy, Mining & Utilities

Questar Corporation (Shareholders)

Questar Corporation

3.8 6.6 29.9 - 6,438

3-May-10 p Continental Airlines Inc Transportation UAl Corporation 0.5 17.8 [loss] 1.5% 6,192

12-May-10 C Sybase Inc Business Services

SAp Ag 4.4 13.1 34.9 56.4% 5,102

C = Completed; p = pending; l = lapsed Source: mergermarket

TOp DEAlS & ExpECTED DEAlS

16

NORTH

AMERICA

Monthly M&A Insider


toP 5 NortH AMerIcAN ANNouNceD DeAls oF tHe MoNtH (July 2010) Announced status target company sector Bidder company seller company exit multiples (x) Bid premia

1-day before

Deal value

(us$m)revenue eBItDA P/e

12-Jul-10 p Hewitt Associates Business Services Aon Corporation 1.5 7.5 18.0 41.2% 4,487

15-Jul-10 p NBTy Consumer The Carlyle group llC

1.4 10.9 23.9 46.8% 3,627

22-Jul-10 p AmeriCredit Corporation Financial Services general Motors Company

n/a n/a 222.7 24.4% 3,306

20-Jul-10 p Bp plc (Western Canadian upstream gas assets)


Apache Corporation Bp plc - 3,250

20-Jul-10 C Bp plc (permian Basin assets in Texas and south-east New Mexico)


Apache Corporation Bp plc - 3,100

9-Jul-10 p Multiplan Inc pharma, Medical & Biotech

BC partners limited; and Silver lake partners

The Carlyle group llC; and Welsh, Carson, Anderson & Stowe

- 3,100

C = Completed; p = pending; l = lapsed Source: mergermarket

17

NORTH

AMERICA

Monthly M&A Insider

situation target company sector Potential bidder company

Financial advisor to bidder (B); target (t); seller (s)

seller company

Market cap/ est. value (us$m)

comments

Expected Deal Novell TMT Elliott Associates

(T) JpMorgan 2,084 Elliott Associates, l.p. (together with funds under common management), a significant institutional stockholder of Novell, offered to purchase the entire company for US$5.75 per share in cash, which implies an enterprise value net of cash of US$1.00bn. The firm sent a letter to the Board of Directors of the Company explaining its offer.

Expected Deal Dollar Thrifty Automotive group


Avis Budget group,

(B) Citigroup 1,281 Avis Budget group would like to make a substantially higher offer to acquire Dollar Thrifty. Dollar Thrifty had recently signed a definitive agreement to be acquired by Hertz for approximately US$41.00 per share.

Expected Deal playboy Enterprise Media The Hefner Family

187 playboy Enterprises, Inc. (pEI) announced that its board of directors has formed a special committee consisting of Sol Rosenthal and Shing Tao to evaluate and determine the company’s response to the proposal made by Hugh M. Hefner (‘Hefner’) on 9 July 2010 to acquire all of the outstanding shares of Class A and Class B common stock of pEI not currently owned by Hefner for US$5.50 per share in cash.

Expected Deal California pizza kitchen

leisure Undisclosed Bidder

(B) Moelis & Company

439 California pizza kitchen (CpkI) announced that its Board of Directors has authorised management to consider a wide range of financial and strategic alternatives to enhance shareholder value. The Company has engaged Moelis & Company, a global investment bank, to be its exclusive financial advisor in this review. California pizza kitchen, a US-based company headquartered in los Angeles, California, is a casual dining restaurant chain with a particular focus on the pizza segment.

Expected Deal Mediacom Communications Corporation

TMT Media's founder, Chairman and CEO, Rocco B. Commisso

(B) Bank of American Merrill lynch, (B) J.p. Morgan Securities, (T) Barclays Capital

475 Mediacom Communications Corporation’s Board of Directors received a non-binding proposal from Mediacom’s founder, Chairman and Chief Executive Officer, Rocco B. Commisso, for a go-private transaction. The proposal contemplates the acquisition of all of the Class A and Class B shares of Mediacom common stock not already beneficially owned by Mr. Commisso at a price of US$6.00 per share in cash.

Expected Deal galleon Energy Energy, Mining & Utilities

Undisclosed Bidder

(T) Cormark Securities, gMp Securities, Macquarie Capital Markets Canada

410 galleon Energy’s financial advisors are already talking with potential buyers. galleon announced it had retained gMp Securities, Cormark and Macquarie Capital to review strategic alternatives, which will alude a number of options; including an outright sale or disposal of a material portion of its assets.

Expected deals are based on confirmed announcements by companies involved.

PIPelINe oF NortH AMerIcAN eXPecteD DeAls


18

NORTH

AMERICA

Monthly M&A Insider

lEAgUE TABlES

vAlUEytD

31-Jul-10House Value

(us$m)Deal count



3 Barclays Capital 116,516 58



6 JpMorgan 104,224 63

7 Bank of America Merrill lynch 103,358 74


9 lazard 72,582 53


11 Evercore partners 37,770 12

12 perella Weinberg partners 35,507 10

13 Blackstone group Holdings 30,894 13

14 Tudor, pickering, Holt & Co 22,832 12

15 RBC Capital Markets 22,665 43

16 greenhill & Co 20,780 17

17 HSBC Bank 18,245 11

18 Jefferies & Company 16,064 40


20 Rothschild 13,537 41Source: mergermarket

vOlUME

The financial advisor league tables by value and volume have been run from 1 January 2010 to 31 July 2010 and exclude lapsed and withdrawn deals. The tables cover all sectors andare based on the geography of either the target, bidder or seller being US or Canadian-based.

ytD 31-Jul-10

House Value (us$m)

Deal count






6 JpMorgan 116,516 58

7 Bank of America Merrill lynch 61,991 57


9 lazard 72,582 53


11 Evercore partners 22,665 43

12 perella Weinberg partners 13,537 41


14 Tudor, pickering, Holt & Co 8,389 34

15 RBC Capital Markets 9,094 31

16 greenhill & Co 4,587 27

17 HSBC Bank 7,461 26

18 Jefferies & Company 746 24


20 Rothschild 821 23Source: mergermarket

toP 20 FINANcIAl ADVIsors – NortH AMerIcA

vAlUEytD


(us$m)Deal count


2 Sullivan & Cromwell 102,244 54

3 latham & Watkins 101,453 85


5 Cleary gottlieb Steen & Hamilton 91,349 37

6 Weil gotshal & Manges 86,882 59

7 Wachtell, lipton, Rosen & katz 85,852 35


9 Cravath Swaine & Moore 78,036 29

10 Debevoise & plimpton 72,256 22

11 Dewey & leBoeuf 72,252 52

12 Shearman & Sterling 60,390 43

13 Blake, Cassels & graydon 54,556 55

14 Slaughter and May 50,540 15

15 Baker Botts 46,757 24

16 Herbert Smith/gleiss lutz/Stibbe 44,570 17

17 Fried Frank Harris Shriver & Jacobson 39,901 27

18 paul Weiss Rifkind Wharton & garrison 37,500 33


20 Norton Rose 35,500 5Source: mergermarket

vOlUME

The legal advisor league tables by value and volume have been run from 1 January 2010 to 31 July 2010 and lude lapsed and withdrawn deals. The tables cover all sectors andare based on the geography of either the target, bidder or seller being US or Canadian-based.

ytD 31-Jul-10

House Value (us$m)

Deal count

1 Jones Day 32,323 90

2 latham & Watkins 101,453 85

3 kirkland & Ellis 17,823 85

4 DlA piper 5,935 84



7 Weil gotshal & Manges 86,882 59



10 Dewey & leBoeuf 72,252 52




14 k&l gates 12,474 40

15 Stikeman Elliott 15,578 39

16 Morgan lewis & Bockius 9,001 39

17 Osler, Hoskin & Harcourt 27,290 38


19 Hogan lovells 7,195 37

20 Wilson Sonsini goodrich & Rosati 3,629 36Source: mergermarket

toP 20 leGAl ADVIsors – NortH AMerIcA

19

NORTH

AMERICA

Monthly M&A Insider

lEAgUE TABlES

vAlUE vOlUME

The private equity buyout activity tables by value and volume are based on private equity firms advising the bidder on buyout deals where the dominant geography of the target company is US or Canadian-based. The tables by value and volume have been run from 1 January 2010 to 31 July 2010 and exclude lapsed and withdrawn deals.

toP 5 PrIVAte equIty FIrMs By NortH AMerIcAN Buyouts

vAlUE

ytD 31-Jul-10

House Value (us$m)

Deal count

1 kohlberg kravis Roberts & Co 4,700 1

2 Cerberus Capital Management 4,048 3

3= Arclight Capital partners 2,774 1

3= kelso & Company 2,774 1

5 Thomas H lee partners 2,560 2Source: mergermarket

vOlUME

The private equity exit activity tables by value and volume are based on private equity firms advising the vendor on exit deals where the dominant geography of the target company is US or Canadian-based. The tables by value and volume have been run from 1 January 2010 to 31 July 2010 and exclude lapsed and withdrawn deals.

ytD 31-Jul-10

House Value (us$m)

Deal count

1 kohlberg kravis Roberts & Co 4,700 1

2 Thomas H lee partners 4,500 2

3 Cerberus Capital Management 4,046 3

4= Hellman & Friedman 3,525 2

4= JMI Equity 3,525 2Source: mergermarket

toP 5 PrIVAte equIty FIrMs By NortH AMerIcAN eXIts

ytD 31-Jul-10

House Value (us$m)

Deal count

1 Silver lake partners 6,259 4



4 Centerbridge partners 3,925 3

5 The Carlyle group 3,772 3Source: mergermarket

ytD 31-Jul-10

House Value (us$m)

Deal count

1 Tpg Capital 2,949 6

2 HIg Capital 149 6


4 gS Capital partners 2,769 5

5 Sun Capital partners 179 5Source: mergermarket

20

NORTH

AMERICA

Monthly M&A Insider

TREND gRApHS

NortH AMerIcAN M&A quArterly treND

0

100,000

200,000

300,000

400,000

500,000

600,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

200

400

600

800

1,000

1,200

1,400

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

of d

eals

NortH AMerIcAN M&A quArterly MID-MArket treND

vAlUE vOlUME

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

100

200

300

400

500

600

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals


vAlUE vOlUME

21

NORTH

AMERICA

Monthly M&A Insider

TREND gRApHS

NortH AMerIcAN M&A sector BreAkDowN ytD 2010

vAlUE vOlUME

31.9%

5.7%

8.1%

10.0%

9.5%15.0%

1.0%2.0%0.2%

0.7%

12.3%

2.0%

1.7%


Financial services

Business services

Consumer

Energy, Mining & Utilites

TMT

Leisure

Transportation


Construction

Agriculture

Real Estate

Defence

14.3%

12.1%

8.4%

14.2%

12.1%

19.2%

3.3%

9.3%

3.2%

0.5%1.0%

0.9%

1.6%


Financial services

Business services

Consumer


TMT

Leisure

Transportation


Construction

Agriculture

Real Estate

Defence

NortH AMerIcAN M&A quArterly PrIVAte equIty treND

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

225,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

North American buyouts

North American exits

0

25

50

75

100

125

150

175

200

225

250

275

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

North American buyouts

North American exits

vAlUE vOlUME

22

NORTH

AMERICA

Monthly M&A Insider

TREND gRApHS

NortH AMerIcAN M&A DeAl sIze BreAkDowN

vAlUE vOlUME

0

100

200

300

400

500

600

700

800

900

1,000

H2 2010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> US$501m

US$251m-US$500m

US$101m-US$250m

US$15m-US$100m

US$5m-US$14.9m

Valu

e (U

S$bn

)

0

500

1,000

1,500

2,000

2,500

3,000

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

Num

ber

of d

eals

> US$501m

US$251m-US$500m

US$101m-US$250m

US$15m-US$100m

US$5m-US$14.9m

Value not disclosed

ASIA-PAcIfIc

A mergermArket m&A report on


ASIA-pAcIfIc

FortIs quIts the bIddIng wAr leAvIng KhAzAnAh to tAKe over PArKwA

on 26 July 2010, fortis Healthcare Limited, the listed Indian hospital operator, withdrew its SgD3.2bn (US$2.3bn) offer to acquire the remaining shares of parkway, leaving Integrated Healthcare Holdings, a subsidiary of the malaysian sovereign fund khazanah nasional Berhad, to acquire all the outstanding shares.

parkway is one of largest hospital operations throughout Asia with 16 hospitals, offering more than 3,400 beds in places such as Singapore, china, malaysia, Brunei and India. Its healthcare spending is increasing in Asian markets by up to 17.0% a year, making parkway an attractive acquisition target for both fortis and khazanah to spearhead their regional expansion in the growing healthcare market.

khazanah, through Integrated Healthcare, had originally offered SgD1.18bn (US$835m) to increase its stake in parkway from 23.90% to 51.50% in may 2010. fortis then announced a counter offer of SgD3.8 (US$2.70) per share for all the remaining parkway shares. parkway would be the jewel asset of khazanah’s healthcare business, but there was obvious concern raised by the fortis offer. pantai Hospitals, a malaysian joint venture currently 60.00% owned by khazanah and 40.00% by parkway, is a significant earnings contributor, making up approximately 25.0% of revenue and 30.0% of earnings before interest, tax, depreciation, amortisation and rent (eBItDAr) at parkway.

However fortis decided to withdraw after is was discovered that the shareholders agreement of the joint venture between parkway and khazanah contained possible deadlock provisions that could be triggered by the purchase. the agreement is understood to have contained russian roulette clauses, whereby a change of control at parkway would allow khazanah to exercise an option to either takeover the stake it currently does not own in pantai, or sell its 60.00% stake to parkway or a third party. this meant that even if fortis succeeded in the acquisition, it could have ended up losing a significant portion of parkway.

In the end, khazanah offered SgD3.95 (US$2.90) per share on 26 July, valuing all the shares it does not own at a total of SgD3.5bn (US$2.57bn), which led to fortis deciding to sell its 283m parkway shares.

PAnAsonIc FInAlly ProceedIng to AcquIre sAnyoon 29 July, panasonic corporation announced its plan to turn Sanyo electric into a wholly owned subsidiary for over JpY400bn. Despite the deal size, however, the announcement was seen as part of the course already set by the firm and was thus of no great surprise.

When panasonic approached to acquire the company in 2008, Sanyo had two classes of preference shares that, when converted, would make up for more than 50.0% of common shares. these preference shares were largely controlled by Daiwa Securities SmBc principal Investments and goldman Sachs, and although Sanyo electric was a listed entity, any potential bidder needed to secure the agreement of these two investors of preferential shares. the parties agreed to value the preference share at JpY1,310 per share, which meant JpY131 per common share when converted. the agreement in 2008 was completed a year later on 21 December 2010 when panasonic converted them to 50.10% stake in Sanyo electric.

With the tender offer on 29 July 2010, panasonic intend to acquire the remaining common shares at JpY138, representing a 21.9% premium over the closing price the previous day, or a 5.3% premium over the price offered in 2008 to holders of preference share. the offer will be open until the 6 october 2010.

ASIA-PAcIfIc


xxtarget: Sanyo electric co Ltd Announced: 29-Jul-10

bidder: panasonic corporation deal value: US$4.84bn

seller: deal nature: recommended

• panasonic corporation, the Japan-listed electronic and electric products manufacturer, has made an offer to acquire a 49.95% stake not already owned Sanyo electric co Ltd, the Japan-listed consolidated electronic and energy products manufacturer, for a consideration of JpY428.48bn (US$4.84bn).

• the transaction will be conducted via a cash offer.

• JpY138 in cash per Sanyo electric share.

• the offer term represents a discount of 7.4% upon the closing price of JpY149 on 29-Jul-10, the last trading day prior to trading halt before the announcement.

• the offer term also represents a premium of 5.1% over the offer term of the last successful tender offer of JpY131 on 19-Dec-10.

• A maximum cash consideration of JpY424.52bn (US$4.86bn) will be financed.

• panasonic corp currently owns 50.05% of Sanyo electric co Ltd.

condItIons:• Unconditional as to acceptances.

DeAL of tHe montH

Advisers

target/seller bidder

Financial ABeam m&A consulting corp fin Financial nomura Holdings

legal mori Hamada & matsumoto legal

Pr Pr

exit multiples – y/e 31-dec-09 Premium analysis

Multiples value (JPym) offer price per share (JPy) 138

revenue 0.7x 1,594,640 1 day before 149

ebItdA 10.3x 107,668 1 month before 116

ebIt 34.4x 32,282 1 day after 136

earnings -48,789 Pre-rumour n/a

25

ASIA-PAcIfIc

Monthly M&A Insider

DeAL of tHe montH

mergermarket/dealreporter Intelligence

29-Jul-10 Sanyo electric: panasonic requires no antitrust approvals

29-Jul-10 panasonic to prioritise cash and treasury stock to fund subsidiary buyouts

timetable and expected events

offer timetable date completed

Target's official response 29-Jul-10 Y reference Board of directors agrees with the tender offer to be made by panasonic corp

Offer period commences 23-Aug-10 from company; offer commencement notice issued on the same day, Article 27-9

Last day for revising/extending/competing offer

6-oct-10 Latest at closing date, Article 27-6(3)

closing date 6-oct-10 30 trading days, Article 27-10(3)

Offer results 7-oct-10 normally next calendar day from closing date of offer

Settlement 13-oct-10 reference transfer of JpY138 per share to shareholders of Sanyo electric who participated in tender offer

company events

6752 Q1 results 8-Jun-10 Y dealreporter estimate: expected mid Aug-10, reference 1st quarter financial results of panasonic corp, ended 30-Jun-10


ASIA-PAcIfIc

toP 15 AsIA-PAcIFIc Announced deAls For ytd 31 July 2010Announced status target company sector bidder company seller company exit multiples (x) bid premia

1-day beforedeal value

(us$m)revenue ebItdA P/e

1-mar-10 L American International Assurance company Limited

financial Services

prudential plc American International group Inc

n/a n/a 20.2 - 35,500

30-mar-10 p AXA Asia pacific Holdings (Asian businesses)

financial Services

AXA SA AXA Asia pacific Holdings Limited

n/a n/a 24.7 - 8,645

4-may-10 p Lihir gold Limited energy, mining & Utilitie

newcrest mining Limited

8.5 19.9 54.2 9.5% 8,286

10-mar-10 p Shanghai pudong Development Bank (20.00% Stake)

financial Services

china mobile group guangdong co Ltd

n/a n/a 11.1 -13.1% 5,831

29-Jul-10 p Sanyo electric co Ltd (49.95% Stake)

Industrials & chemicals

panasonic corporation

0.7 11.0 (loss) -7.4% 4,839

29-Jul-10 p panasonic electric Works Ltd (49.00% Stake)


panasonic corporation

-1.2% 4,657

25-Jan-10 c Jupiter telecommunications co Ltd (37.80% Stake)

tmt kDDI corporation Liberty global Inc

3.6 8.3 32.6 64.5% 4,014

21-may-10 p piramal Healthcare Solutions business

pharma, medical & Biotech

Abbott Laboratories piramal Healthcare Limited

8.3 - 3,720

30-mar-10 p AXA Asia pacific Holdings Limited

financial Services

national Australia Bank Limited

n/a n/a 21.8 1.3% 3,579

22-mar-10 c Arrow energy Limited energy, mining & Utilities

royal Dutch Shell; and petrochina

36.9 7.4 10.5 -11.2% 3,352

18-may-10 p Denway motors Limited (62.10% Stake)

Automotive guangzhou Automobile group co Ltd

62.1 (loss) 23.6 53.0% 3,293

31-mar-10 c emobile Limited (57.45% Stake)

tmt eAccess Limited temasek Holdings pte Ltd; and gS capital partners

3.3 (loss) - 3,051

6-may-10 p Hua Xia Bank co Limited (27.15% Stake)

financial Services

Deutsche Bank Luxembourg SA; Shougang group corporation; and State grid Asset management company Limited

n/a n/a 14.9 - 3,042

27-may-10 p parkway Holdings Ltd (77.66% Stake)


khazanah nasional Berhad

4.3 22.5 35.9 26.1% 2,861

17-mar-10 c Astro All Asia networks plc

tmt Astro Holdings Sdn Bhd

3.0 (loss) (loss) 20.3% 2,649

c = completed; p = pending; L = Lapsed Source: mergermarket

top DeALS & eXpecteD DeALS


ASIA-PAcIfIc

toP 5 AsIA-PAcIFIc Announced deAls oF the Month (July 2010)Announced status target company sector bidder company seller company exit multiples (x) bid premia

1-day beforedeal value

(us$m)revenue ebItdA P/e

29-Jul-10 p Sanyo electric co Ltd (49.95% Stake)


panasonic corporation 0.7 11.0 (loss) -7.4% 4,839

29-Jul-10 p panasonic electric Works Ltd (49.00% Stake)


panasonic corporation 0.6 9.9 103.2 -1.2% 4,657

1-Jul-10 L parkway Holdings Ltd (74.73% Stake)


fortis Healthcare Limited 4.9 25.7 36.3 6.5% 2,626

30-Jul-10 p tanjong plc (52.82% Stake)

energy, mining & Utilities

Usaha tegas Sdn Bhd 3.3 8.5 13.9 22.1% 2,474

19-Jul-10 p Healthscope Limited pharma, medical & Biotech

carlyle group; and tpg capital

1.7 12.4 23.3 15.9% 2,284

c = completed; p = pending; L = Lapsed Source: mergermarket


28

ASIA-PAcIfIc

Monthly M&A Insider

PIPelIne oF AsIA-PAcIFIc exPected deAlssituation target company sector Potential bidder

companyFinancial adviser to bidder (b); target (t); seller (s)

seller company Market cap/ est. value (us$m)

comments

expected deal

transurban group

construction canada pension plan Investment Board (cppIB); and ontario teachers’ pension plan (otpp)

Lazard (t); UBS Investment Bank (t); goldman Sachs (B); Jpmorgan (B)

6,500 transurban group in november received a conditional and non-binding joint takeover proposal from cppIB and otpp. the Board then evaluated the proposal and rejected it on the original terms. the future fund Board of guardians has subsequently considered supporting the proposal by cppIB and otpp. transurban continues to insist a bona fide proposal is needed before talks can proceed. In may 2010, cppIB and otpp raised its offer from AU$5.25 per transurban share to AU$5.57 per share. However, the revised takeover proposal was again rejected bytransurban as transurban considered that their offer was still too low.

expected Deal

chuo mitsui trust Holdings Inc

financial Services

Sumitomo trust & Banking

5,709 chuo mitsui trust and Sumitomo trust have announced a plan to consolidate the business by creating a holding company by April 2011.

expected Deal

SgIS Songshan co Ltd


guangdong Hengjian Investment Holding co Ltd

932 SgIS Songshan will raise up to cnY2.5bn from private placement of 570m new shares. Heng Jian Investment will acquire up to 341.69m new shares in the company for a maximum of cnY1.5bn (US$220.6m) and become second largest shareholder.

expected Deal

nufarm Limited


Sumitomo chemical company Ltd

818 nufarm was a rumoured takeover target for Sumitomo chemical company Ltd; following the completion of a partial offer.

expected Deal

measat global Berhad

tmt measat global network Systems Sdn

482 measat global Bhd received a conditiona voluntary proposal from measat global network Systems Sdn for mYr4.2 per share in cash.

expected Deal

Wai chun mining Industry group co. Ltd.

consumer Undisclosed bidder

404 Wai chun mining has signed a memorandum of understanding in relation to the possible issue of new shares which may lead to a change in control of the company.

expected Deal

redflex Holdings Limited

tmt macquarie group Limited

206 redflex Holdings Limited received an indicative, non-binding and confidential proposal to acquire all of the issued capital of redflex by scheme of arrangement from a wholly owned subsidiary of macquarie group Limited at a price of AU$2.50 per share.

expected Deal

Boom Logistics

transport Archer capital and mcAleese group

200 Boom Logistics, the Australian-listed crane hire business, has received a takeover offer from Archer capital and mcAleese group. Boom Logistics has received two conditional proposals from Archer in April. the company rejected the first bid outright due to its conditionality. Boom Logistics has not yet formalised its response to the second offer of AU$0.52 per Boom Logistics share.

expected deals based on confirmed announcements by companies involved


29

ASIA-PAcIfIc

Monthly M&A Insider

LeAgUe tABLeS

vALUeytd

31-Jul-10house value

(us$m)deal count


2 Jpmorgan 33,499 24


4 morgan Stanley 30,637 24

5 HSBc Bank 27,471 15

6 macquarie group 24,623 21

7 Barclays capital 19,141 11


9 Bank of America merrill Lynch 18,109 16

10 credit Suisse 16,865 22

11 nomura Holdings 16,834 11

12 Standard chartered 16,599 8

13 Bnp paribas 15,174 10

14 Lazard 14,179 5

15 china International capital 13,803 8

16 cImB group 12,098 17

17= global Investment House kScc 10,700 1

17= State Bank of India 10,700 1

19 Bmo capital markets 10,282 2

20 citigroup 9,910 14Source: mergermarket

voLUme

the financial adviser league tables by value and volume have been run from 1 January 2010 to 31 July 2010 and exclude lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being Asia-pacific-based, excluding Japan.

ytd 31-Jul-10

house value (us$m)

deal count



3 kpmg 4,065 28


5 ernst & Young 2,635 27



8 credit Suisse 16,865 22

9 Deloitte 6,880 22

10 macquarie group 24,623 21

11 pricewaterhousecoopers 2,677 21

12 cImB group 12,098 17


14 HSBc Bank 27,471 15

15 rothschild 6,779 15

16 citigroup 9,910 14

17 Barclays capital 19,141 11



20 optima capital 715 9Source: mergermarket

toP 20 FInAncIAl AdvIsers – AsIA-PAcIFIc excl JAPAn

toP 20 legAl AdvIsers – AsIA-PAcIFIc excl JAPAnvALUe

ytd 31-Jul-10

house value (us$m)

deal count

1 Herbert Smith/gleiss Lutz/Stibbe 50,166 8


3 Slaughter and may 44,006 14

4 norton rose 42,269 22

5 Sullivan & cromwell 38,361 6

6 Simpson thacher & Bartlett 37,546 7

7 cravath Swaine & moore 36,988 2

8 Weil gotshal & manges 36,379 5

9 cleary gottlieb Steen & Hamilton 35,950 3


11 Allens Arthur robinson 24,154 17

12 mallesons Stephen Jaques 24,072 31


14 freehills 21,737 35

15 AZB & partners 19,398 40

16 Skadden Arps Slate meagher & flom 16,038 13

17 Allen & overy 15,909 15

18 Baker & mckenzie 12,336 25

19 Blake Dawson 10,992 15

20 talwar, thakore and Associates 10,700 2Source: mergermarket

voLUme

the legal adviser league tables by value and volume have been run from 1 January 2010 to 31 July 2010 and include lapsed and withdrawn deals. the tables cover all sectors and are based on the geography of either the target, bidder or seller being Asia-pacific-based, excluding Japan.

ytd 31-Jul-10

house value (us$m)

deal count

1 DLA piper 1,430 42


3 freehills 21,737 35

4 mallesons Stephen Jaques 24,072 31

5 Wongpartnership 8,451 31


7 minter ellison 5,906 25

8 kim & chang 3,725 24

9 Jones Day 3,311 24


11 freshfields Bruckhaus Deringer 4,959 20

12Amarchand & mangaldas & Suresh A Shroff & co 6,028 19

13 clayton Utz 4,435 19

14 Allens Arthur robinson 24,154 17


16 Allen & gledhill 5,952 17

17 clifford chance 4,112 16

18 Allen & overy 15,909 15

19 Blake Dawson 10,992 15

20 Slaughter and may 44,006 14Source: mergermarket

30

ASIA-PAcIfIc

Monthly M&A Insider

LeAgUe tABLeS

vALUe

ytd 31-Jul-10

house value (us$m)

deal count

1 nomura Holdings 21,157 422 Jpmorgan 10,713 93 morgan Stanley 7,322 164 Daiwa Securities group 6,683 195 Bank of America merrill Lynch 6,104 46 citigroup 5,467 57 ABeam m&A consulting corp fin 5,228 28 goldman Sachs 4,328 79 UBS Investment Bank 4,014 110 Deutsche Bank 3,521 311 greenhill & co 3,510 312 Lazard 3,390 313 centerview partners 3,301 114 Sangyo Sosei Advisory 3,297 215 mizuho financial group 2,516 25

Source: mergermarket

voLUme

the financial adviser league tables by value and volume have been run from 1 January 2010 to 31 July 2010 and exclude lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being Japan-based.

ytd 31-Jul-10

house value (us$m)

deal count


2 mizuho financial group 2,516 25

3 Daiwa Securities group 6,683 19

4 Sumitomo mitsui financial group 2,071 17


5 gcA Savvian 1,429 11

7 Jpmorgan 10,713 9


9 kpmg 732 7

10 pricewaterhousecoopers 624 7

11 citigroup 5,467 5

12 ernst & Young 602 5


14 A.g.S. consulting 254 4

15 Deutsche Bank 3,521 3Source: mergermarket

toP 15 FInAncIAl AdvIsers – JAPAn

vALUe

ytd 31-Jul-10

house value (us$m)

deal count

1 mori Hamada & matsumoto 15,292 36


3 nagashima ohno & tsunematsu 8,384 19


5 nishimura & Asahi 7,517 20

6 Anderson mori & tomotsune 6,012 11


8 gibson Dunn & crutcher 5,131 3

9 kikkawa Law offices 4,774 2

10 morrison & foerster 4,293 10




14 Webber Wentzel 2,853 2

15 eversheds 2,822 1Source: mergermarket

voLUme

the legal adviser league tables by value and volume have been run from 1 January 2010 to 31 July 2010 and include lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being Japan-based.

ytd 31-Jul-10

house value (us$m)

deal count

1 mori Hamada & matsumoto 15,292 36

2 nishimura & Asahi 7,517 20

3 nagashima ohno & tsunematsu 8,384 19

4 tmI Associates 2,115 12

5 Anderson mori & tomotsune 6,012 11

6 morrison & foerster 4,293 10



9 Baker & mckenzie 379 7




13 kitamura & Hiraga 323 5


15 DLA piper 648 4Source: mergermarket

toP 15 legAl AdvIsers – JAPAn

31

ASIA-PAcIfIc

Monthly M&A Insider

trenD grApHS

AsIA-PAcIFIc M&A quArterly trend

vALUe voLUme

0

50,000

100,000

150,000

200,000

Q310*

Q210

Q110

Q409

Q3 09

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q2 05

Q 05

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

100

200

300

400

500

600

700

800

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

AsIA-PAcIFIc M&A quArterly MId-MArKet trend

vALUe voLUme

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Q310*

Q2 10

Q1 10

Q4 09

Q309

Q209

Q1 09

Q408

Q308

Q208

Q1 08

Q407

Q307

Q207

Q107

Q406

Q306

Q2 06

Q1 06

Q405

Q305

Q205

Q1 05

Q404

Q304

Q2 04

Q104

Valu

e (U

S$m

)

0

100

200

300

400

500

Q3 10*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q2 07

Q 07

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

moving average trend line

32

ASIA-PAcIfIc

Monthly M&A Insider

trenD grApHS

AsIA-PAcIFIc M&A sector breAKdown ytd 2010

vALUe voLUme

17.1%

12.0%

7.5%

17.4%

19.7%

6.5%

2.1%

2.6%

6.1%

4.8%

1.2% 2.9%


TMT

Consumer


Financial Services

Business Services


Construction

Real Estate

Transport

Leisure

Agriculture

20.5%

13.2%

11.9%

7.3%

9.2%

2.5%

11.2%

6.5%

5.3%

4.9%

4.3%3.0%


TMT

Consumer


Financial Services

Business Services


Construction

Real Estate

Transport

Leisure

Agriculture

AsIA-PAcIFIc M&A quArterly PrIvAte equIty trend

vALUe voLUme

0

5,000

10,000

15,000

20,000

25,000

Q3 10*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

Asia-Pacificbuyouts

Asia-Pacificexits

0

20

40

60

80

100

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

Asia-Pacificbuyouts

Asia-Pacificexits

33

ASIA-PAcIfIc

Monthly M&A Insider

trenD grApHS

AsIA-PAcIFIc M&A geogrAPhIc breAKdown ytd 2010

vALUe voLUme

China

Australia

Japan

South Korea

India

Hong Kong

Singapore

Malaysia

Indonesia

Taiwan

Other

20.6%

6.9%

4.8%

8.6%

3.6%

7.5%

6.1%

2.4%

1.1%

22.9%

15.4%

26.8%

9.9%

10.7%

14.5%

15.4%

5.3%

5.3%

4.1%

4.0%

2.5%

1.6%

China

Australia

Japan

South Korea

India

Hong Kong

Singapore

Malaysia

Indonesia

Taiwan

Other

AsIA-PAcIFIc M&A deAl sIze breAKdown

vALUe voLUme

0

50

100

150

200

250

300

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> US$501m

US$251m-US$500m

US$101m-US$250m

US$15m-US$100m

US$5m-US$14.9m

Valu

e (U

S$bn

)

0

300

600

900

1200

1500

H2 2010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> US$501m

US$251m-US$500m

US$101m-US$250m

US$15m-US$100m

US$5m-US$14.9m

Value not disclosed

Num

ber

of d

eals


europe

A mergermArket m&A report on

eUrope

the most active sector last July was Industrials & Chemicals, representing circa 18.0% of european m&A activity. this area has historically been the most active in the region, representing 20.0% of the european m&A activity both in 2009 and YtD 2010 and our deal of the month is a tribute to these figures: the €3.70bn take-private acquisition of tomkins by a consortium of Canadian investors.

things are slightly different in terms of m&A value. So far this year, most european m&A value has came from the energy, mining & Utilities space (19.0%), which is represented three times in the top 10 deals of the year-to-date, and twice in the top five deals of July.

The (maybe) biggest European investment by Hong Kong companies on record:energy, mining & Utilities is on the track to lead european m&A in value all year. Indeed, on the 30 July, a binding offer was made by a consortium led by Cheung kong Infrastructure (CkI) and Hongkong electric, the two listed Hong kong-based groups, to acquire the Uk distribution network of eDF for about €6.90bn.

mr. Li ka-shing, the richest man in Hong kong and one of Asia’s wealthiest men, is behind the offer made by the Hong kong consortium. mr. Li ka-shing controls CkI, which itself owns a 39.00% stake in the smaller Hongkong electric. Under the terms of the offer, Hongkong electric and CkI would respectively control two-fifths of eDF’s Uk distribution networks, while mr. Li’s charity foundation would own the remainder.

eDF has granted the consortium a period of exclusivity for the finalisation of the transaction after mr. Li’s offer outbid Scottish & Southern energy and another consortium comprising of sovereign-wealth fund Abu Dhabi Investment Authority, macquarie Capital and Canada pension plan, according to sources close to the deal.

According to media sources, mr. Li ka-shing would raise a £665m (€800m) debt from rBS, Deutsche Bank, Bnp paribas, Barclays, Lloyds, mizuho Bank and Santander to fund the acquisition. Its irrevocable offer is above the £5.00bn (€6.00bn) that eDF was expected to sell its Uk network for and would help to reduce the French electricity giant’s record net debt of €44.00bn, as well as meet in a single transaction its €5.00bn announced disposals target.

the offer remains open for acceptance until 24 october. If the offer is accepted by the French group, in terms of value, energy, mining & Utilities might take a serious lead on other sectors.

Spanish conquistador Santander buys more assets:Financial Services represented, by far, the european sector with the highest value of deals in 2009 (about €87.00bn, representing 28.0% of the european m&A value last year), but the niche has fallen to a disappointing fifth position in the YtD 2010.

the space only represents 11.0% of total european m&A value since the beginning of the year, this is despite Banco Santander’s best efforts to boost m&A within the sector. Indeed, the listed Spanish bank has been on somewhat of a charge this summer, acquiring the remaining 25.00% stake in its mexican subsidiary for about €2.00bn in June; buying the retail banking operations of SeB group in July for €555m; and it acquired 318 of rBS’s Uk branches for nearly €2.00bn on 4 August.

moreover, according to a source close to Bank millennium, Santander has already sent a preliminary approach to acquire the polish bank, which has a market capitalisation of about €1.00bn. In north America, according to one person close to the matter, the Spanish group is considering a deal to buy m&t, the new York state-based bank and according to the Financial times, Banco Santander is also keen on building its presence in Latin America over the next two or three years.

In eUrope, JULY wAS not A greAt montH In termS oF m&A ACtIvItY wItH onLY 296 DeALS AnnoUnCeD – tHe SeConD weAkeSt montH In termS oF DeAL FLow tHIS YeAr, JUSt BeHInD JAnUArY wHen onLY 280 DeALS were InkeD. wHen CompAreD to JULY 2009, (m&A ACtIvItY From JAnUArY-JULY wAS 6.5% Lower tHAn tHIS YeAr), tHe nUmBer oF DeALS AnnoUnCeD wAS 16.0% HIgHer tHAn 2010’S FIgUre.

35

europe

Monthly M&A Insider

Beside its external growth strategy, the Spanish bank is offering greater power to local units through Ipos of its individual subsidiaries in their main markets. According to the wall Street Journal, Santander Brazil’s Ipo in 2009 gave the bank very good publicity and raised more than €5.00bn in capital for the parent company, as well as lifting the worth of the franchise. Like HSBC, Santander follows the strategy of having foreign units work as subsidiaries instead of branches in the belief that it is a good way of identifying the franchise as local, instead of foreign.

the strategy that began in Brazil last year is now being considered for the Uk as well as other markets. the Spanish group is actually consolidating the operations it has acquired in the Uk – Abbey, Alliance & Leicester and part of Bradford & Bingley. According to the Financial times, Santander is considering a part-listing of Santander Uk as early as this autumn to help fund its acquisition strategy. According to bankers, floating 20.00% of the business could raise £3.00bn (€3.60bn).

In the end, if Santander’s acquisitions are consolidating the sector, the Spanish bank is, in a way, decentralising.

eUrope

36

europe

Monthly M&A Insider

Target: tomkins plc Announced: 27-Jul-10

Bidder: onex partners Lp; and Canada pension plan Investment Board Deal value: €3.67bn

Seller: - Deal nature: Cross-border, IBI, public, take-private, transatlantic

pinafore Acquisitions Limited, the consortium comprising onex partners Lp and Canadian pension plan Investment board, and tomkins plc, the Uk engineering company, have agreed on the terms for a recommended scheme to acquire the entire issued and to be issued ordinary share capital of tomkins plc.

STrucTurE:• the transaction will be conducted via a scheme of

arrangement under Uk law.

TErMS:• Shareholders of tomkins plc will receive £3.25 in cash per

each share held.

• Holders of tomkins plc ADrs will receive £13.00 in cash per each ADr held.

• the offer values the fully diluted capital of tomkins plc at £2.89bn.

• It represents a premium of 5.7% over tomkins plc’s closing share price of £3.075 on 26-Jul-10, the last trading day prior to the firm announcement of the offer.

• It represents a premium of 41.1% over tomkins plc’s closing share price of £2.303 on 16-Jul-10, the last trading day prior to tomkins receiving an approach from the consortium.

BAcKgrounD:• on 19-Jul-10, tomkins plc received an approach about

a possible offer for the company from a consortium comprising onex partners Lp and the Canada pension plan Investment Board to acquire the Company at £3.25 in cash per share. the Board has considered the terms of the proposal and allowed the consortium to conduct due diligence on the company.

PoST DEAl DETAIlS:• If pinafore receive the necessary acceptances and all

conditions are fulfilled, then they will apply to de-list tomkins plc from the London stock exchange.

• It is expected that the tomkins ADr programme will be terminated following the Acquisition becoming effective and the ADrs are to be delisted from the nYSe and de-registered with the SeC.

FInAncIng:• the cash consideration payable will be financed through a

combination of equity and debt financing.

• the debt financing, consists of facilities of US$3.00bn, arranged and fully underwritten by Bank of America merrill Lynch, Citigroup global markets Inc., Barclays Capital, rBC Capital markets and UBS Securities LLC.

• equity financing of approximately US$2.20bn, will be provided in equal shares by onex and CppIB. onex’s equity financing will be funded from its onex partners III, L.p. private equity fund and from onex Corporation. CppIB’s equity financing will be funded from its existing cash resources.

conDITIonS:• tomkins egm approval

• High Court approval

• Clearance by competition authority in Canada, China, Japan, mexico, russia, South korea, Ukraine, and the United States

• eC phase I clearance

DeAL oF tHe montH

37

europe

Monthly M&A Insider

DeAL oF tHe montH

Exit multiples – Y/E 31-Mar-10 Premium analysis

Multiples Value (€m) offer price per share (€) 3.90

revenue 1.3x 2,910 1 day before 5.69%

EBITDA 18.7x 197 1 month before 37.30%

EBIT 62.3x 59 1 day after 0.31%

Earnings - 8 Pre-rumour 43.90%

Advisers


Financial morgan StanleyJpmorgan CazenoveJamieson Corporate Finance

Financial CitigroupUBS Investment BankrBC Capital marketsBarclays Capital

legal Slaughter and may legal Latham & watkinsFreshfields Bruckhaus Deringer

Pr Finsbury group Pr maitland (Amo)

Mergermarket/dealreporter Intelligence

27-Jul-10 tomkins: Standard Life continues opposition to bid

22-Jul-10 tomkins: Standard Life says 325p is too low from onex and Cpp

19-Jul-10 tomkins: Lower future earnings factored into 325p/share bid

08-Jan-10 tomkins takeover chatter unfounded, people familiar say

10-Dec-09 tomkins bid rumours ‘wide of the mark’, person says

Timetable and expected events

regulatory Date notes

Announcement 27-Jul-10 Yes

Scheme of arrangement document issued

6-Aug-10 Yes

Court meeting estimates: normally 1 month after Scheme of Arrangement (SoA) document issued, simple majority of voting minority shareholders present and 75.0% of value of votes cast required

High court estimates: normally 3-4 weeks after Court meeting & egm, ref sanction of SoA

effective date estimates: normally next trading day from High Court sanction

Settlement estimates: 14 calendar days from effective Date at the latest, 180 calendar day after SoA doc issued

end date estimates: normally next trading day from High Court sanction

company Events

Target ex-vote date estimates: 4 trading days before egm

Target ex-record date estimates: 2 trading days before egm

Target eGM estimates: alongside Scheme meeting, normally 1 month from SoA doc issued; 75.0% of votes cast required

38

europe

Monthly M&A Insider

ToP 15 EuroPEAn AnnouncED DEAlS YTD 31 JulY 2010Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia


(€m)revenue EBITDA P/E

4-Jan-10 p Alcon Inc (52.00% Stake)


novartis Ag nestle SA 8.0 20.9 26.9 9.5% 18,247

30-Jun-10 p oJSC polyus gold energy, mining & Utilities

kazakhgold group Limited

9.8 22.8 35.0 5.4% 8,367

5-Jan-10 C nk russneft oAo energy, mining & Utilities

mikhail gutseriyev (private Investor)

en+ group Ltd 4,595

14-Jun-10 C JSC Uralkali (53.20% Stake)


kaliha Finance Limited; Aerellia Investments Limited; and Becounioco Holdings Limited

madura Holding Limited

10.5 21.7 37.9 21.4% 4,254

18-mar-10 p ratiopharm gmbH pharma, medical & Biotech

teva pharmaceutical Industries Ltd

2.6 - 4,200

27-Jul-10 p tomkins plc Industrials & Chemicals

onex partners Lp; and Canada pension plan Investment Board

1.3 18.7 5.7% 3,672

8-Apr-10 p Iberia Lineas Aereas de espana SA

transportation British Airways plc 0.9 0.9% 3,598

24-Jun-10 p AXA SA (Uk life and pensions businesses)

Financial Services

resolution Limited AXA SA n/a n/a 20.4 - 3,330

20-Jan-10 C Areva t&D SA Industrials & Chemicals

Schneider electric SA; and Alstom SA

ArevA SA 0.6 - 3,180

21-Jul-10 p SSL International plc

Consumer reckitt Benckiser plc 3.4 19.5 37.4 32.8% 3,046

24-Feb-10 C edenred SA Business Services

Accor SA (Shareholders)

Accor SA 3.7 9.2 2,937

22-Apr-10 p Arriva plc transportation Deutsche Bahn Ag 0.8 7.7 14.6 1.2% 2,819

23-Jun-10 p Cognis gmbH Industrials & Chemicals

BASF Se permira; gS Capital partners; and Sv Life Sciences

0.9 7.5 28.0 - 2,408

15-mar-10 C tommy Hilfiger Corporation

Consumer phillips-van Heusen Corporation

Apax partners LLp 1.3 7.9 - 2,200

21-Jun-10 p Subsea 7 Inc energy, mining & Utilities

Acergy m.S. Limited 1.2 5.5 10.0 1.8% 2,008


top DeALS & eXpeCteD DeALS

39

europe

Monthly M&A Insider


ToP 5 EuroPEAn AnnouncED DEAlS oF THE MonTH (JulY 2010)Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia


(€m)revenue EBITDA P/E

27-Jul-10 p tomkins plc Industrials & Chemicals

onex partners Lp; and Canada pension plan Investment Board

1.3 18.7 5.7% 3,672

21-Jul-10 p SSL International plc

Consumer reckitt Benckiser plc 3.4 19.5 37.4 32.8% 3,046

29-Jul-10 p bwin Interactive entertainment Ag

tmt partygaming plc 4.0 18.4 35.3 31.9% 1,688

1-Jul-10 p endesa Distribucion electrica SL (electricity distribution assets)


red electrica de espana SA

endesa Distribucion electrica SL

- 1,270

7-Jul-10 p northern Ireland electricity plc


electricity Supply Board of Ireland

viridian group Limited

- 1,243


40

europe

Monthly M&A Insider

Situation Target company Sector Potential bidder company

Financial adviser to bidder (B); target (T); seller (S)

Seller company Market cap/ est. value (€m)

comments

expected deal

eDF energy plc (Uk network activities)


Consortium of Cheung kong Infrastructure Holdings Ltd, Hongkong electric Holdings Ltd, and Li ka-Shing Foundation

electricite de France SA

6,900 eDF group has received a €6.90bn irrevocable offer and has granted exclusivity to the Cheung kong group in respect of its Uk electricity distribution networks.

expected deal

Dana petroleum plc


korea national oil Corporation

Bank of America merrill Lynch (B); royal Bank of Scotland group (t); rBC Capital markets (t)

2,161 Dana petroleum and its suitor korea national oil Corporation (knoC) are in talks over knoC’s £18 per share indicative offer, according to people close to both companies.

expected deal

Bank millennium SA

Financial Services

Banco Santander SA

Banco Comercial portugues SA

1,076 Bank millennium's portuguese parent company Banco Commercial portugues (BCp) has received a preliminary approach from Spain’s Santander, said a source at the polish-listed lender.

potential takeover target

Uktv tmt BBC worldwide Limited

virgin media Inc

420 BBC worldwide may look to increase its 50.00% stake in Uktv, but is not considering taking full ownership of the company, a source close to the situation said.


gascan - gases Combustiveis SA

Business Services

the riverside Company; and gALp energia SgpS SA

Banco millennium BCp Investimento (S)

explorer Investments SCr SA

100 gascan, the portuguese distributor of liquefied petroleum gas (Lpg), is up for sale by portuguese private equity firm explorer, who have mandated BCp and Cuatrecasas.

note: expected deals based on confirmed announcements by companies involved

PIPElInE oF EuroPEAn ExPEcTED DEAlS


41

europe

Monthly M&A Insider

LeAgUe tABLeS

vALUeYTD


(€m)Deal count

1 goldman Sachs 74,712 522 Credit Suisse 74,471 663 Citigroup 62,551 364 morgan Stanley 57,427 655 Jpmorgan 54,947 486 Deutsche Bank 46,868 487 Bank of America merrill Lynch 38,532 278 Lazard 35,697 579 UBS Investment Bank 34,465 4410 rothschild 34,078 8411 Barclays Capital 34,052 2812 greenhill & Co 22,257 1013 HSBC Bank 19,246 2114 Sg 17,352 1215 nomura Holdings 15,181 2316 Bnp paribas 12,608 2517 Credit Agricole CIB 11,674 1418 rBC Capital markets 10,952 1619 Bmo Capital markets 9,318 320 Blackstone group Holdings 8,765 4


voLUme

the financial adviser league tables by value and volume have been run from 1 January 2010 to 31 July 2010 and exclude lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being europe-based.

YTD 31-Jul-10

House Value (€m)

Deal count

1 rothschild 34,078 84

2 kpmg 5,746 73

3 pricewaterhouseCoopers 6,188 72



6 Deloitte 4,197 58

7 Lazard 35,697 57






13 ernst & Young 1,393 35

14 DC Advisory partners 4,117 30




18 global m&A 80 24


20 HSBC Bank 19,246 21Source: mergermarket

ToP 20 FInAncIAl ADVISErS

vALUeYTD


(€m)Deal count


2 Simpson thacher & Bartlett 57,082 25


4 Cravath Swaine & moore 55,605 11

5 Skadden Arps Slate meagher & Flom 51,633 28






11 weil gotshal & manges 40,486 32

12 Davis polk & wardwell 37,364 12




16 Latham & watkins 27,303 42

17 wachtell, Lipton, rosen & katz 26,732 6


19 Homburger 21,421 9

20 Uria menendez 18,310 19Source: mergermarket

voLUme

the legal adviser league tables by value and volume have been run from 1 January 2010 to 31 July 2010 and exclude lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being europe-based.

YTD 31-Jul-10

House Value (€m)

Deal count



3 DLA piper 4,189 80


5 CmS 4,920 64

6 Clifford Chance 17,529 56

7 Jones Day 8,466 45

8 SJ Berwin 6,187 44

9 Latham & watkins 27,303 42


11 Hogan Lovells 8,852 40


13 mannheimer Swartling 6,106 38


15 white & Case 7,013 35


17 weil gotshal & manges 40,486 32


19 vinge 3,196 30

20 Skadden Arps Slate meagher & Flom 51,633 28Source: mergermarket

ToP 20 lEgAl ADVISErS

42

europe

Monthly M&A Insider

LeAgUe tABLeS

vALUe

YTD 31-Jul-10

House Value (€m)

Deal count

1 onex partners 3,672 1

2 Advent International 1,818 4

3 CvC Capital partners 1,600 3

4 tpg Capital 1,559 2

5 triton partners 1,456 4

6 kohlberg kravis roberts & Co 1,423 4

7 Cinven 1,401 2


9 niam 1,088 1

10 Bridgepoint Capital 898 4Source: mergermarket

voLUme

the private equity buyout activity tables by value and volume are based on private equity firms advising the bidder on buyout deals where the dominant geography of the target company is europe-based. the tables by value and volume have been run from 1 January 2010 to 31 July 2010 and exclude lapsed and withdrawn deals.

YTD 31-Jul-10

House Value (€m)

Deal count

1 HgCapital 606 8

2 Lloyds tSB Development Capital 289 6

3 edmond de rothschild Investment partners 183 5

4 Barclays private equity 160 5

5 Sovereign Capital partners 50 5

6 procuritas 28 5

7 Capman group - 5

8 Advent International 1,818 4

9 triton partners 1,456 4

10 kohlberg kravis roberts & Co 1,423 4Source: mergermarket

ToP 10 PrIVATE EquITY FIrMS BY EuroPEAn BuYouTS

vALUe

YTD 31-Jul-10

House Value (€m)

Deal count

1= permira 2,408 2

1= Sv Life Sciences 2,408 2


4 Apax partners 2,200 3

5 the Carlyle group 1,879 4

6 riverstone Holdings 1,759 1

7 Candover Investments 1,200 2

8 3i group 1,133 2

9 montagu private equity 1,117 2

10 Bridgepoint Capital 1,074 1Source: mergermarket

voLUme

the private equity exit activity tables by value and volume are based on private equity firms advising the vendor on exit deals where the dominant geography of the target company is europe-based. the tables by value and volume have been run from 1 January 2010 to 31 July 2010 and exclude lapsed and withdrawn deals.

YTD 31-Jul-10

House Value (€m)

Deal count

1 the Carlyle group 1,879 4

2 ISIS private equity partners 44 4

3 Apax partners 2,200 3

4= Duke Street 404 3

4= parcom Capital 404 3

6 Barclays private equity 363 3

7 Azulis Capital 150 3

8 endless Investments 28 3

9= Capman group - 3

9= perfectis private equity - 3Source: mergermarket

ToP 10 PrIVATE EquITY FIrMS BY EuroPEAn ExITS

europe


trenD grApHS

EuroPEAn M&A quArTErlY TrEnD

vALUe voLUme

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q4 04

Q3 04

Q2 04

Q104

Valu

e (€

m)

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

EuroPEAn M&A quArTErlY MID-MArKET TrEnD

vALUe voLUme

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

0

100

200

300

400

500

600

700

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

moving average trend line

europe

Monthly M&A Insider

EuroPEAn M&A SEcTor BrEAKDown YTD 2010

vALUe voLUme

14.9%

0.3%0.5%

14.3%

1.7%2.2%

5.3%3.4%

11.1%

10.7%

5.3%

10.9%

19.3%


Consumer

TMT

Business Services

Financial Services



Construction

Leisure

Transportation

Real Estate

Agriculture

Defence

15.6%

20.4%

1.0%0.4%3.2%

1.7%

3.8%

7.1%

4.8%

11.0%

9.3%

8.2%

13.0%


Consumer

TMT

Business Services

Financial Services



Construction

Leisure

Transportation

Real Estate

Agriculture

Defence

trenD grApHS

EuroPEAn M&A quArTErlY PrIVATE EquITY TrEnD

vALUe voLUme

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

European buyouts

European exits

0

50

100

150

200

250

300

350

400

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

European buyouts

European exits

44

europe


EuroPEAn M&A DEAl SIzE BrEAKDown

vALUe voLUme

0

50

100

150

200

250

300

350

400

450

500

550

600

650

700

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> €501m

€251m-€500m

€101m-€250m

€15m-€100m

€5m-€14.9m

Valu

e (€

bn)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> €501m

€251m-€500m

€101m-€250m

€15m-€100m

€5m-€14.9m

Value not disclosed

Num

ber

of d

eals

trenD grApHS

EuroPEAn M&A gEogrAPHIc BrEAKDown YTD 2010

vALUe voLUme

Iberia

Benelux

Italy

Other

SEE

UK & Ireland

Nordic

France

CEE

Germany

9.0%

10.8%

7.4%

9.1%

8.1%

6.3%

2.5%

2.8%

17.1%

27.8%

11.7% 7.7%

6.7%

5.3%

5.2%

12.6%

3.1%

22.9%

12.3%

12.3%

Iberia

Benelux

Italy

Other

SEE

UK & Ireland

Nordic

France

CEE

Germany

46

Mid

dle east &

africa

THE MIDDLE EAST & AFRICA

A MERgERMARkET M&A REpoRT on

Monthly M&A Insider

nipon Telegraph and Telecom have made an offer to acquire the South African-listed IT Company Dimension Data in a US$2.80bn deal. Following the announcement, Dimension’s shares jumped over 18.0%. The rdeal rationale was hinted at by nTT president Satoshi Miura in a BBC interview when he stated that Dimension’s brand power in emerging markets is stronger than nTT’s. Although, there is not much overlap between the operations of the two firms, nTT intends to make Dimension Data’s available to its existing customers in order to strengthen the services it is offering and gain access to Africa, Latin America and the Middle East markets.

Another telecom’s deal last month saw the Indian telecom giant Bharti complete the acquisition of Zain Africa, which has operations in 15 African countries, valued at US$10.70bn.

Additional African telecom deals look set to be in the pipeline with the Moroccan government looking to sell its 8.00% stake in Maroc Telecom. The stake has an estimated value of around US$1.80bn. Currently, the majority of the Maroc is held by the French-listed telecom firm Vivendi SA, who hold a 53.00% stake, and the Moroccan telecom firm Etat marocain who own 30.00%. other deals expected to complete soon are the ongoing privatisations of guinea’s state-owned telecom company Sotelgui SA and the Republic of Benin’s government-owned Benin Telecom. Maroc Telecom has also expressed interest in these privatisations.

Meanwhile in other sectors, Bp has begun to try and secure its position in anticipation of claims resulting from the gulf of Mexico oil spill, repairing its cash position, via an asset disposal plan. The first deal has seen the sale of US$7.00bn worth of energy assets, including their Egyptian business and other exploration concessions in the Western Desert and East Badr El-din to the US-based Apache Corp for US$650m.

There is a slight stir in the MEA Financial Services sector as there is expected to be a consolidation of Qatari banks. The listed International Bank of Qatar is in preliminary talks with the Al-khalij Commercial bank to merge their operations and although the valuation process and due diligence procedure is yet to be completed, the merger is expected to create an entity with US$11.10bn worth of assets. The transaction is expected to be finalised either this year or in 2011.

According to mergermarket data, the TMT, Financial Services, Consumer and Energy, Mining & Utilities sectors represent around 56.0% of overall activity in the region by volume for the year-to-date. Similarly, the TMT and Energy, Mining & Utilities spaces witnessed the largest deal values, constituting 52.0% of overall activity alone, suggesting that the focus on emerging markets will continue to largely concentrate on these sectors.

For the year-to-date on the outbound M&A front, Israel and South Africa have been the most active investors with 33 and 45 deals, respectively. Within the MEA region, South Africa carried out the largest number of deals with 38.

JULy SAW THE SEConD LARgEST TRAnSACTIon In THE MIDDLE EAST AnD AFRICA (MEA) So FAR THIS yEAR AnD THE FIRST DEAL In SUB-SAHARAn AFRICA By A JApAnESE TELECoM CoMpAny.

47

Mid

dle east &

africa

Monthly M&A Insider

Target: Dimension Data Holdings plc Announced: 11-Jun-10

Bidder: nippon Telegraph and Telephone Corporation Deal value: US$2.82bn

Deal nature: Cross-border, public

DESCRIPTION • nTT group, the Japanese telecommunications company,

has announced it will acquire the entire outstanding share capital of Dimension Data, the South African IT infrastructure services company. The transaction will be conducted via a recommended public offer under Uk law.

TERMS• Dimension Data shareholders will receive £1.20 (US$1.86)

per each share held.

• The offer values the existing issued ordinary share capital of Dimension Data at £2.05bn.

• The offer represents a premium of 18.1% to Dimension Data’s £1.016 closing price on 14-Jul-10, the last day before the offer announcement.

IRREVOCABLES • Dimension Data directors have irrevocably undertaken

to accept the offer in respect of their own beneficial holdings, representing in aggregate approximately 1.1%.

• nTT has received irrevocable undertakings from the following institutional shareholders: VenFid DD Holdings Limited (25.19%); Allan gray limited (discretionary -4.54%, non-discretionary -21.21%).

• Therefore, total irrevocables amount to 50.95%

CONDITIONS• 90.0% acceptances

• EC

• South African Competition Authority

• Independent Communication Authority (RSA)

• HSR (US)

• CFIUS clearance received

DEAL oF THE MonTH

Advisers


Financial JpMorgan Cazenovenomura Holdings

Financial Morgan Stanley

Legal Eversheds Legal LinklatersWebber Wentzel

PR FD PR

Exit multiples – Y/E 30-Jun-09 Premium analysis

Multiples Value (US$m) Offer price per share (US$) 1.86

Revenue 0.7x 3,973 1 day before 18.11%

EBITDA 11.5x 246 1 month before 19.76%

EBIT 154.7x 193 1 day after -2.04%

Earnings 0.2x 145 Pre-rumour n/a

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DEAL oF THE MonTH

mergermarket/dealReporter Intelligence

3-Aug-10 Dimension Data/nTT offer document expected to be issued next week

29-Jul-10 DD/nTT: Deal to be notified in SA and US soon, nTT official says analysis

20-Jul-10 Dimension Data: Venfin shareholder meeting 13-Aug-10

16-Jul-10 Dimension Data: SA competition review expected to take 2-3 months

15-Jul-10 Dimension Data/nTT: Competition filings already started

15-Jul-10 Dimension Data: nTT offer unsolicited; irrevocable deadline 'sufficient'

Timetable and expected events

Regulatory Date Notes

ec notification 19-Jul-10 y

ec clearance provisional deadline

24-Aug-10 under EC Simplified procedure

south african competition commission and competition tribunal

South African Competition Commission; formally 60/85 td for decision from filing: 40/55 td for SACC recommendation to Tribunal; 10/20 td for Tribunal hearing; 10 td for decision (20 td for publication of reasoning) - in practice decision within 10td from SACC recommendation, i.e. 50/65 td from filing

Offer timetable

announcement 15-Jul-10 y

soa doc issued dealReporter est.: 12-Aug-10 latest 28 cd from announcement

court meeting dealReporter est.: 13-Sep-10 normally 1m after SoA doc issued, simple majority of voting minority shareholders present and 75.0% of value of votes cast required

High court dealReporter est.: 11-oct-10, normally 3-4w after Court Meeting & EgM, ref sanction of SoA

effective date dealReporter est.: 12-oct-10, normally next td from High Court sanction

settlement dealReporter est.: 26-oct-10, latest 14 cd from Effective Date

end date dealReporter est.: 8-Feb-11, normally 180 cd after SoA doc issued

Company events

target ex-vote date dealReporter est.: 7-Sep-10, 4td before EgM

target ex-record date dealReporter est.: 09-Sep-10, 2td before EgM

target eGM dealReporter est.: 13-Sep-10, alongside Scheme Meeting, normally 1m from SoA doc issued; 75.0% of votes cast required

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TOP 15 MIDDLE EASTERN & AFRICAN ANNOUNCED DEALS FOR YTD 31 JULY 2010Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia



30-Mar-10 C Zain Africa BV TMT Bharti Airtel Limited Mobile Telecommunications Company k.S.C.

11.2 - 10,700

15-Jul-10 p Dimension Data Holdings plc

TMT nippon Telegraph and Telephone Corporation

0.7 11.5 0.2 18.1% 2,822

18-Feb-10 p Tsogo Sun Holdings pty Ltd

Leisure gold Reef Resorts Limited

Hosken Consolidated Investments Limited; and SABMiller plc

19.7 21.9 59.0 - 2,721

28-Mar-10 p Sonangol Sinopec International Limited (55.00% stake)


Sinopec Corporation Hongkong International Limited

Sinopec overseas oil & gas Limited

- 2,457

31-Mar-10 p Momentum group Limited

Financial Services

Metropolitan Life Limited

FirstRand Limited n/a n/a - 2,408

10-May-10 p Anglo American Zinc Energy, Mining & Utilities

Hindustan Zinc Limited

Anglo American plc 2.0 6.3 - 1,338

25-Mar-10 p Hyprop Investments Limited (66.70% stake)

Real Estate Redefine Income Fund Limited

15.3 2.5% 942

21-Mar-10 C Qatar Shipping Company QSC

Transportation Qatar navigation Company QSC

-24.0% 917

10-Jan-10 C Qatar Real Estate Investment Co

Real Estate Barwa Real Estate Company QSC

n/a n/a 10.1 30.6% 862

20-Jul-10 p Bp plc (Western Desert business concessions and East Badr El-din exploration concession in Egypt)


Apache Corporation Bp plc 650

11-Jul-10 p Aabar Investments pJSC

Financial Services

International petroleum Investment Company

n/a n/a 3.3 545

20-May-10 C Shadeed Iron & Steel LLC


Jindal Steel & power Ltd

Al ghaith Holding pJSC

- 464

10-Mar-10 C Foodcorp (proprietary) Limited (77.00% stake)

Consumer new Foodcorp Holdings (proprietary) Limited

pamodzi Investment Holdings (proprietary) Limited

0.6 5.8 - 453

18-Jan-10 p Bank Audi SAL - Audi Saradar group (13.95% stake)

Financial Services

M1 group Ltd EFg-Hermes Holding Company

n/a n/a 3.4% 450

15-Mar-10 C kingdom Hotel Investments (43.90% stake)

Leisure kingdom Holding Company

4.1 14.3 0.4 25.0% 375



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Monthly M&A Insider

Situation Target company Sector Potential bidder company Financial adviser to bidder (B); target (T); seller (S)

Seller company Market cap/ est.

value (US$m)

Comments

Rumoured takeover

International Bank of Qatar

Financial Services

Al-khalij Commercial Bank

Simmons & Simmons (B), Barclays Bank (B)

11,100 Al khalij to be advised by Barclays, Simmons & Simmons on its merger with IBQ.


Maroc Telecom (8.00% stake)

TMT government of Morocco

1,800 Moroccan government is planning to sell up to an 8.00% stake in the Moroccan telecom company Maroc Telecom.

Rumoured takeover

Amraz Industrials & Chemicals

Cargal group 127 Cargal, the privately held Israeli packaging company, is holding talks to acquire the Israeli plastic packaging firm Amraz.


Days Inn Hotel Ramallah

Leisure Tiger group 22 Tiger group, a palestine-based investment company, is considering bringing on board a strategic investor to help complete its Days Inn Hotel in Ramallah.

Expected deals based on confirmed announcements by companies involved

PIPELINE OF MIDDLE EASTERN & AFRICAN ExPECTED DEALS


TOP 5 MIDDLE EASTERN & AFRICAN ANNOUNCED DEALS OF ThE MONTh (JULY 2010)Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia

1-day before

Deal value


15-Jul-10 p Dimension Data Holdings plc

TMT nippon Telegraph and Telephone Corporation

0.7 11.5 0.2 18.1% 2,822

20-Jul-10 p Bp plc (Western Desert business concessions and East Badr El-din exploration concession in Egypt)


Apache Corporation Bp plc 650

11-Jul-10 p Aabar Investments pJSC

Financial Services

International petroleum Investment Company

n/a n/a 3.32 545

4-Jul-10 C Link Dot net; and Link Egypt

TMT Egyptian Company for Mobile Services

orascom Telecom Holding SAE

130

13-Jul-10 p CIC Holdings Limited Industrials & Chemicals

Imperial Holdings Limited

0.3 7.0 0.1 15.2% 96


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LEAgUE TABLES

VALUEYTD


(US$m)Deal count





5 Standard Chartered 11,650 3

6 HSBC Bank 11,617 3


8= global Investment House 10,700 1

8= State Bank of India 10,700 1

10 Royal Bank of Scotland group 5,715 2

11 Commerzbank 5,715 1

12 Lazard 4,791 5

13 JpMorgan 4,631 4


15 Rand Merchant Bank 4,589 8Source: mergermarket

VoLUME

The financial adviser league tables by value and volume have been run from 1 January 2010 to 31 July 2010 and exclude lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being Middle East (including Israel) & African-based.

YTD 31-Jul-10

house Value (US$m)

Deal count


2 Rand Merchant Bank 4,589 8

3 Lazard 4,791 5

4 Investec 4,038 5




8 JpMorgan 4,631 4



11 nedbank Capital 295 4

12 Deloitte 100 4

13 pricewaterhouseCoopers 78 4

14 Standard Chartered 11,650 3

15 HSBC Bank plc 11,617 3Source: mergermarket

TOP 15 FINANCIAL ADVISERS – MIDDLE EAST & AFRICA

VALUEYTD


(US$m)Deal count





5 Talwar, Thakore and Associates 10,700 1


7 Edward nathan Sonnenbergs 6,815 7



10 Stikeman Elliott 5,748 2

11= goERg Rechtsanwaelte 5,715 1

11= kirkland & Ellis 5,715 1

11= noerr 5,715 1

11= Willkie Farr & gallagher 5,715 1

15 Eversheds 2,853 2


VoLUME

The legal adviser league tables by value and volume have been run from 1 January 2010 to 31 July 2010 and include lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being Middle East (including Israel) & African-based.

YTD 31-Jul-10

house Value (US$m)

Deal count



3 Werksmans 866 8

4 Edward nathan Sonnenbergs 6,815 7

5 Bowman gilfillan 1,702 7





10 DLA Cliffe Dekker Hofmeyer 785 5


12 gibson Dunn & Crutcher 735 4

13 Jones Day 597 4

14 norton Rose - 4

15 Sullivan & Cromwell 6,365 3Source: mergermarket

TOP 15 LEgAL ADVISERS – MIDDLE EAST & AFRICA

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Monthly M&A Insider

LEAgUE TABLES

VALUE

VALUE

YTD 31-Jul-10

house Value (US$m)

Deal count

1 Capitau 453 1

2 Actis Capital 30 1

3 Tene Capital 23 1

4 Capinnova Investment Bank 20 1

5= good Energies 15 1

5= new Energies Invest 15 1

5= Zouk Ventures 15 1Source: mergermarket

VoLUME

The private equity buyout activity tables by value and volume are based on private equity firms advising the bidder on buyout deals where the dominant geography of the target company is Middle East (including Israel) & African-based. The tables by value and volume have been run from 1 January 2010 to 31 July 2010 and exclude lapsed and withdrawn deals.

YTD 31-Jul-10

house Value (US$m)

Deal count

1 Capitau 453 1

2 Actis Capital 30 1

3 Tene Capital 23 1

4 Capinnova Investment Bank 20 1

5= good Energies 15 1

5= new Energies Invest 15 1

5= Zouk Ventures 15 1Source: mergermarket

TOP 5 PRIVATE EqUITY FIRMS BY MIDDLE EASTERN & AFRICAN BUYOUTS

VALUEYTD 31-Jul-10

house Value (US$m)

Deal count

1 pamodzi Investment Holdings 453 1

2 Radius Ventures 160 1

3 pitango Venture Capital 100 2

4 Cedar Fund 89 2

5= Ant Capital partners 60 1

5= Bridge Capital Fund 60 1

5= Marathon Venture Capital Fund 60 1

5= Mitsubishi UFJ Capital 60 1

5= nippon Venture Capital 60 1

5= Teuza - A Fairchild Technology Venture 60 1

5= yozma group 60 1Source: mergermarket

VoLUME

The private equity exit activity tables by value and volume are based on private equity firms advising the vendor on exit deals where the dominant geography of the target company is Middle East (including Israel) & African-based. The tables by value and volume have been run from 1 January 2010 to 31 July 2010 and exclude lapsed and withdrawn deals.

YTD 31-Jul-10

house Value (US$m)

Deal count

1 pitango Venture Capital 100 2

2 Cedar Fund 89 2

3 Evergreen Venture partners 29 2

4 pamodzi Investment Holdings 453 1

5 Radius Ventures 160 1Source: mergermarket

TOP 5 PRIVATE EqUITY FIRMS BY MIDDLE EAST & AFRICA ExITS

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TREnD gRApHS

MIDDLE EAST & AFRICA M&A qUARTERLY TREND

VALUE VoLUME

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q4 4

Q304

Q204

Q104

Valu

e (U

S$m

)

0

30

60

90

120

150

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q1 06

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

of d

eals

MIDDLE EAST & AFRICA M&A qUARTERLY MID-MARkET TREND

VALUE VoLUME

0

1,000

2,000

3,000

4,000

5,000

6,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

10

20

30

40

50

60

70

80

Q310*

Q2 10

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

of d

eals


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Monthly M&A Insider

TREnD gRApHS

MIDDLE EAST & AFRICA M&A SECTOR BREAkDOwN YTD 2010

VALUE VoLUME

2.8%0.2%

0.4%0.1%

3.9%

16.8%

12.1%

34.8%

9.4%

3.5%

5.9%

1.1%

9.0%



Financial Services

TMT

Consumer

Business Services

Real Estate


Leisure

Transportation

Construction

Agriculture

Defence

15.7%

14.5%

15.7%

9.0%

0.6%1.8%2.4%

2.4%2.4%

3.8%

6.0%

12.7%

13.3%



Financial Services

TMT

Consumer

Business Services

Real Estate


Leisure

Transportation

Construction

Agriculture

Defence

MIDDLE EAST & AFRICA M&A qUARTERLY PRIVATE EqUITY TREND

VALUE VoLUME

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

-

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Valu

e (U

S$m

)

Middle East& Africa buyouts

Middle East& Africa exits

0

2

4

6

8

10

12

14

16

18

20

-

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Num

ber

of d

eals

Middle East& Africa buyouts

Middle East& Africa exits

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Monthly M&A Insider

TREnD gRApHS

MIDDLE EAST & AFRICA M&A gEOgRAPhIC BREAkDOwN YTD 2010

VALUE VoLUME

1.6%

0.8%

7.3%

4.4%

1.7% 33.5%

4.0%

2.9%

3.7%

0.9%

5.3%0.7%

32.3%

South Africa

Israel

Egypt

United Arab Emirates

Kuwait

Qatar

Saudi Arabia

Nigeria

Oman

Namibia

Angola

Lebanon

Zambia

31.1%

27.0%

8.8%

6.1%

4.7%

3.4%

3.4%

2.7%

2.7%

2.0%

2.0%

2.0%

1.4%

1.4%1.4%

South Africa

Israel

Egypt

United Arab Emirates

Kuwait

Qatar

Saudi Arabia

Nigeria

Oman

Namibia

Jordan

Syrian Arab Republic

Angola

Lebanon

Sierra Leone

MIDDLE EAST & AFRICA M&A DEAL SIZE BREAkDOwN

VALUE VoLUME

0

10

20

30

40

50

60

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> US$501m

US$251m-US$500m

US$101m-US$250m

US$15m-US$100m

US$5m-US$14.9m

Valu

e ($

bn)

0

50

100

150

200

250

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> US$501m

US$251m-US$500m

US$101m-US$250m

US$15m-US$100m

US$5m-US$14.9m

Value not disclosed

Num

ber

of d

eals

www.mergermarket.comRemark, part of The Mergermarket group

80 StrandLondon, WC2R 0RLUnited Kingdom

t: +44 (0)20 7059 6100f: +44 (0)20 7059 [email protected]

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t: +1 212 686-5606f: +1 212 [email protected]

Suite 2401-3Grand Millennium Plaza181 Queen’s Road, CentralHong Kong

t: +852 2158 9700f: +852 2158 [email protected]

Disclaimer

This publication contains general information and is not intended to be comprehensive nor to provide financial, investment, legal, tax or other professional advice or services. This publication is not a substitute for such professional advice or services, and it should not be acted on or relied upon or used as a basis for any investment or other decision or action that may affect you or your business. Before taking any such decision you should consult a suitably qualified professional adviser. Whilst reasonable effort has been made to ensure the accuracy of the information contained in this publication, this cannot be guaranteed and neither Mergermarket nor any of its subsidiaries nor any affiliate thereof or other related entity shall have any liability to any person or entity which relies on the information contained in this publication, including incidental or consequential damages arising from errors or omissions. Any such reliance is solely at the user’s risk.

Remark, the events and publications arm of The Mergermarket group, offers a range of publishing, research and events services that enable clients to enhance their own profile, and to develop new business opportunities with their target audience.

The following notes pertain to data contained in this publication:

• Deals are included where the deal value is greater than or equal to €5m.

• Where no deal value has been disclosed, deals are included if the turnover of the target is greater than or equal to €10m.

• Deals are included in the graphs and Top Deals in each section based on the dominant geography and dominant sector of the target company. Data underlying the League Tables are based on deals where the bidder, target or parent geography of either is that of the geography in focus.

• H1 2010 refers to the period 31 January 2010 to 31 July 2010.

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