Insights, Q3 2016
Transcript of Insights, Q3 2016
Insights, Q3 2016
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Regional insights8 Western Europe9 AsiaPacific(IncludingGreaterChina)11 U.S. 11 CEEandCIS12 MiddleEastandNorthAfrica13 Sub-SaharanAfrica14 India15 Latin America
A global snapshot24 Top20globalinboundtargetmarkets
andoutboundacquirers26 Toptargetmarketsforthe
world’slargestacquiringcountries
Sector insights16 Privateequity16 Consumer 18 Energyandinfrastructure18 Financialservices19 Lifesciences20 Mining21 Telecoms,mediaandtechnology
6In focus6 Cyberbecomesabigdeal
4Executive summary4 Inaholdingpattern5 GlobalM&AinnumbersQ32016
Contents
M&A Insights | Q3 20162
© Allen & Overy LLP 2016
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In most regions and sectors the values of deals continued to shrink in the third quarter, although deal volumes have fared better. While some investors are ploughing on with significant transactions, others appear to be holding back while they try to make sense of current political and economic uncertainties.
In a holding pattern
Q3 KEY THEMES INCLUDE:
DEALVALUESDOWNFROM2015HIGH
Dealvalueshavefallenby24%intheyeartodatecomparedtolastyear’srecordbreakingroundofhugetransactions,althoughtheyremainrelativelysteadywhencomparedtothesameperiodin2014.Thenumberofdealsheldupbetter,indicatingthat wearenowseeingalargerspreadofsmallerdeals.Confidentinvestorscontinuetopressahead,aswehaveseenwiththeBayer/Monsantodeal(thebiggestcashonlytakeoverinhistory),SoftBank’sacquisitionofARMandDanone’stakeoverofWhiteWaveFoods.
ASTEADYQUARTERFORPRIVATEEQUITY ANDINFRASTRUCTURE
Theprivateequitysectorremainsactiveandpipelinesforthecomingquarterlookstrong,withfundsmakingaflightforscaleandquality,andtransactionvaluesincreasing,althoughdealvolumeshavedeclined.ThevalueoflifesciencesandTMT dealshave,asexpected,droppedfromtheirrecordlevelsofrecentyearsandBrexitishavingaparticularlystrongimpactonthefinancialservicessector.Othersectorshaveheldupbetter,includinginfrastructurewhereanincreasinglybroadrangeofinvestorsarechasingyieldinalow-interestrateenvironmenthelpedbyanabundanceofcheapfinance.
WITHDRAWNDEALSALSO ONTHERISE
Thenumberoftransactionsthathavefailedtocompletehasalsorisensharply,atotalofUSD687billionsofarin2016,largelyduetoincreasedscrutinybycompetitionregulatorsandthestricterrulesontaxinversionsannouncedbytheU.S.TreasuryDepartment.Abigproportionofthatfigureisattributableto twodeals–Pfizer/AllerganandUnitedTechnologies/Honeywell–butsettingthesedealsaside,thevalueofwithdrawndealshasalreadyoutstrippedthe2015totalandthevolumeofwithdrawndealshasreachedasix-yearhigh.
POLITICALANDECONOMICWORRIESMOUNTINQ3
AlthoughQ3istraditionallyaquietquarter,thedeclineintheoverallvalueoftransactionshasbeenparticularlymarkedthisyear.Itisclearthatinvestorsaretryingtocometotermswithsignificantpoliticalandeconomicworries–notleastthelong-termeffectofBrexit,theimpactofafractiousU.S.presidentialrace,on-goingpressureoncommoditypricesandcontinuedconcernaroundeconomicslow-downinChina.
ALLREGIONSSEEINGADECLINE INDEALACTIVITY
Theslowdownindealactivityisbeingfeltacrossallregions, withtheU.S.–forsolongtheengineroomofglobaldealmaking– seeinga32%declineintransactionvaluescomparedtothesameperiodlastyear,Chinaa26%fallandWesternEurope an18%contraction.Chineseoutboundinvestmentcontinuesapace,however,asinvestorscontinuetopursueanincreasinglydiverserangeofassetsinmarketsacrosstheworlddespitegrowingsensitivityinsomejurisdictionsovernationalsecurity. Intheyeartodate,outbounddealshavesoaredandarealreadyatUSD141bncomparedwithUSD110bnforallof2015.
INCREASEOFINBOUNDINVESTMENT TOTHEUKPOST-BREXIT
TheUKisnowthesecondmostattractiveglobalinbound targetmarketbehindtheU.S.,overtakingSwitzerlandinQ3. TheplungeinthevalueofsterlinghasmadeUKassetsincreasinglyattractivetointernationalinvestors,asevidenced bytheGBP691mtakeoverofPremierFarnellbyAvnet,Inc.aftertheU.S.companytoppedanofferfromSwissgroupDaetwyleratthelastminute.
M&A Insights | Q3 20164
© Allen & Overy LLP 2016
Global M&A in numbers Q3 2016
Note:Thesefiguresrepresentthetotalnumberofdealsannouncedbetween1January2016and20September2016.
Deal volumes by region
Region %ofdeals byregion
U.S. 43%
Western Europe 20%
GreaterChina 19%
AsiaPacific(excl.China) 10%
Latin America 2%
MENA 2%
CEEandCIS 1%
Sub-SaharanAfrica 1%
Other 2%
Over 25%
Less than 10%
Between 10% and 25%
2%
2%
1%
1%
43%20%
19%
10%
Dataprovidedby
Top 6 sectors by value (USD) Global deal values (USD) Q1toQ3
240bnFinancialservices
232bnRealestate
214bnLifesciences
782bnEnergyandinfrastructure
236bnConsumer
508bnTMT
2012 2013 2014 2015 2016
2.26
tn
2.99
tn
2.32
tn
1.63
tn
1.64
tn
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Cyber becomes a big deal
It was probably not the most comfortable piece of news to come out just before the biggest ever social media M&A deal was unveiled in June – the giant USD26.5bn takeover of the professional social network,
LinkedIn, by Microsoft.
Butafewweeksearlier,itemergedthatahackerwasactiveonthedarkwebtryingtosellsome117millionemailaddressesandpasswordsstolenfromtheLinkedInsite.InSeptember,itwastheturnofYahoo!,intheprocessofbeingboughtbyVerizon, toannounceanevenbiggerhack–thistimeinvolvingthedataofsome500millionusers.
Thetwoannouncementsserveasyetanotherreminderofthespeedatwhichthecyberthreat isgrowing.Ifeventhemostsophisticatedtechcompanies–forwhomdataisliterallytheirmostvaluableasset–arestrugglingwithsuchthreats,whatchancedoothercompanieshave?
Butthenewsalsoshinesalightonanotheraspectofthecyberthreat–thefactthatitisbecomingavitallyimportantriskmanagementissueinthecontextofM&A.
A growing threat
Mostcompaniesarenowawareofhowfastthis riskisgrowing.Despitethisrealisation,thesheerscaleoftheproblemisstillhair-raising.
Symantec’s2016InternetSecurityThreatReportsuggeststhatoverhalfabillionpersonalinformationrecordswerestolenorlostin2015.Thisyearalso
sawanew“zero-day”vulnerability–onewherehackersexploitanotherwiseundiscoveredflaw insoftwarebeforeafixhasbeencarriedout–discoveredeveryday.Therewasalsoa55%increasein“spear-phishing”campaignstargetingemployees.“Ransomware”attacks,wheremalicioussoftwareblocksaccesstoacomputeruntilafeeispaid,wereupby35%.Wehavealsoseenanunendingstreamofhigh-profilecorporatesecuritybreachesbeingreported.
Allthismeansmorecompaniesarelearningthe painfulpriceofsufferingacyberbreachfirsthand–tarnishedreputation,lossofcustomerconfidence,theftofvaluablecorporateinformation,regulatoryactionandfines,legalactionbyemployees,customersandinvestorsandseverebusinessdisruption.AndmanycompaniesarealsolearningitsimportanceinthecontextofM&A.
Morecompaniesarelearningthepainfulpriceofsuffering acyberbreachfirsthand.
Due diligence is not an archaeological exercise
Understandingthecybervulnerabilitiesofatargetcompanyisnowanincreasinglyimportantaspect oftheduediligenceworkwearedoingforclientsandithasarealbearingonwhetherthedealgoesaheadandatwhatvalue.Whilepartofthatwork isaboutidentifyingperhapsundisclosedpastbreaches,thisisnotanarchaeologicalexercise.
Justasimportantisdiscoveringhowwellthetargetcompanyhasprepareditselftofacefuturethreats,whathiddenliabilitiesmightcometolightinthe faceofchangesindataprotectionregulationandhowcompatibletechnicaldefencemechanisms,policiesandproceduresmightbewhentwoITarchitecturesaremerged.
Cybersecurity is now an increasingly big concern in M&A, sometimes a deciding factor in whether a deal actually goes ahead and on what terms, and a crucial concern in the vital integration phase that follows completion. More companies are aware of the risk. Not all are managing it well.
M&A Insights | Q3 20166
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Sufferingacyberattackmaynotbeadealbreaker.Whatthebuyerwillwanthelpinascertainingis:whatisthenatureandthelikelyscaleoftheliability?Whatwillthecostbe?Whatarethechancesoffurthersanctionsorinvestigations?Andwhathasbeenandshouldhavebeendonebythetargetcompanytostrengthenitsdefencesandriskmanagementprocedures?
Sufferingacyberattackmaynotbeadealbreaker.
Allthesequestionsarebecomingmorefraught inthefaceofchangingregulation.ThenewEUGeneralDataProtectionRegulation,duetocomeintoforceintwoyearstime,includespunitivefinesforbreachesofpersonaldatasetatbetween 2%and4%ofagroup’sannualglobalturnover (andpostcompletion,thatwouldlikelybethe newlyenlargedgroup’srevenue).
Makingtheduediligenceprocessreallyeffectiverequiresaholisticapproach,bringingtogethermultipleworkstreamsincluding,crucially,operationalexpertise.Thebuyer’sITandsecurityteam,oftenworkingwithexternaladvisers,needtobeabletocheckthatthetargethaseffectivetechnology, suchasencryption,andtherightpoliciesandproceduresinplace.
Well-runcompanieswithanambitiontogetboughtoutatalaterstageneedtothinkstrategicallytomakesuretheywillpassmusterwhenputunder thespotlight.
Mid-deal security and the integration challenge
Therearemanypointsofvulnerabilitythroughoutthedealprocessandbeyond.Withcrowdsofadvisersworkingonboththebuyandsellside,includinginvestmentbanks,lawyers,techadvisersand
PRandcommunicationsteams,itisimportant tohaverobustsecurityproceduresinplacewhilethedealisnegotiated,withsensitivematerialappropriatelysafeguarded.
Perhapsthebiggestchallengecomesafteradealhascrossedthefinishingline.BringingtwoormoredifferentITinfrastructurestogetherandcreatingacommonsecurityculturepresentsanopportunity forbusinessestoaddressfundamentalissues.
Buthighlyacquisitivecompaniesaren’talwaysgoodatthistaskanditisnotuncommonforthemtoendupwithapatchworkofsystemsthatleavethemveryvulnerable.Alltheevidenceshowsthatexternalhackersareincreasinglytargetingthisintegrationphase,knowingtheremaywellbeweaknessestoexploit.Andtheremaybebiginternalthreatstoo, forexamplefromdisgruntledemployeeswhofeelthedealisnotintheirinterests.
There’sbeenagrowingtrendinthelastfiveyears formorecomplicatedprocedurestobeputinplacetosafeguardthispartofthetransaction.Transitionalserviceagreementsnowtendtohaveaheavyfocusoncyberissues,andthisislikelytoincrease.
Cybersecurity M&A – consolidation likely
Investmentincybersecuritybycompanies,governmentsandotherpublicbodiescontinues tomultiply.Securitycompanies,oftensmallboutiqueoperations,haveattractedbillionsofdollarsofventurecapitalinvestmentinrecentyears,buttheirprogresstowardspossibleIPOorre-investmenthasslowedinthelastyearorso.
Asaresultthisremainsahighlyfragmentedsector,ripeforconsolidation.Forestablishedplayersthisistendingtotaketwoforms–consolidationamongstpeers,aswesawintherecentAVG/Avastcombination,orbigplayerstakingoversmalleroperators(Symantec/BlueCoat).
PEfundsarealsoactiveespeciallywheretheyseeanopportunitytoexploitstrongcashflowsfromthecorporatecustomersofestablishedcybercompanies.VistaEquityPartners,forinstance,recentlyboughtPingIdentity,acloud-basedidentitymanagementsoftwaregroup.
Thisspikeinactivitywillcontinuewithplentyoftargets,particularlyintheU.S.,UKandIsrael, likelytocomeintoplay.
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Regional insightsWhile Q3 saw a pretty steep decline in deal values in nearly all regions, we still saw a raft of significant transactions across the board with Chinese outbound investors remaining by far the most active of all.
WESTERN EUROPE Wait and see
GiventhepotentialdisruptioncausedbytheUK’svotetoleavetheEuropeanUnion,it’sperhapssurprisingthatM&Aactivityacrosstheregion,andintheUK inparticular,didnotsuffergreaterdeclinesinQ3.
Overalldealvalueshavefallenquitesharplyand, incontrasttothelastfewyears,therewasaverysignificantslowdowninM&Aactivityduringthesummer.However,thefeedbackwehavereceivedfromclientsindicatesthatinvestorsarenotabandoningthemarketbutareinsteadassessingthelikelylonger-termimpactofBrexit.IndeedactivitylevelsreboundedquicklyinthefirstfewweeksofSeptember.
AcrossEurope,bothinboundandoutbound,strategicdealsarestillgettingdoneasshownbyBayer’sdecisiontocompleteitsUSD66bntakeoverofMonsanto,thelargestcash-onlyofferonrecordandDanone’sUSD12.4bntakeoveroftheU.S.organicandnaturalfoodsgroup,WhiteWave,thebiggest dealbytheFrenchfoodgiantin10years.
Investorsarenotabandoningthemarketbutareinsteadassessingthelikelylonger-termimpactofBrexit.
InbounddealsintotheUKhavebenefitedfrom theplungeinthevalueofsterlingfollowingthereferendumvoteandtheUKisnowthesecondmostattractiveglobalinboundmarket.Avnet,Inc oftheU.S.,forexample,outbidtheSwissgroupDaetwyler,totakecontroloftechgroupPremier
Farnellatthelastminute,and,atGBP691m, paidconsiderablylessintothebargainthanks tothemuchweakerpound.
OutsidetheUK,otherEuropeanmarketsremainedsurprisinglyactiveanddealpipelinesarestillstrong.
TheNetherlandsforinstancewasbusyoverthesummer,withPEfundsremainingonthefront foot.OnesignificantdealwasPAIPartners’acquisitionofthehotelsandresortsbusiness,Roompot,fromGildeBuyOutPartners.
TheBayertransactionaside,theGermanmarketisalsofulloflifewithsomeobserverspredicting2016couldstillbearecordyearfortransactions.Dealmakersappeartoremaininconfidentmood, arewellfundedandconvincedthatM&Aisstillthebestwaytoachievegrowth.ChineseinvestmentinGermanycontinuestogrowexponentially,with27dealsworthUSD10.6bnalreadyrackedupbytheendofAugust.
GermanoutboundinvestorshavebeenparticularlybusyandthereisalargepipelineofdealsbuildingwithsignsthatdealmakerstargetingtheU.S.wanttoorganisefinancingbeforetheU.S.presidentialraceendsortheFederalReserveraisesinterestrates.StandoutdealsincludedVonovia’s USD3.1bnbidforAustrianrealestategroup,Conwert,Henkel’sUSD3.6bnacquisitionof SunProductsCorp,FreseniusbuyingSpanishhospitalsgroup,Quironsalud,forUSD6.5bnandVW’spurchaseofaUSD256mstakeinU.S.truckmaker,Navistar.
Inboundwasonlyslightlyquieteroverall, withChinesebuyerscontinuingtheirinvestmentspree.ThebiggestChineseinvestmentinGermanyever,Midea’sEUR4.5bnbidforrobotmakerKuka,hasnowreceivedforeigninvestmentcontrolclearance.BigPEfundswerequieteroverthesummer,butsmallerfundsremainedhighlyactive.
M&A Insights | Q3 20168
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Politicaldeadlockhasledto abottleneckindealsintheSpanishregulatedsector.
InSpain,therealestatemarkethasbeguntosparkbackintolifeforthefirsttimesincethefinancialcrisis,and,withthebankingsystemstronger, itsrecoveryshouldbeonamorestablefooting.Evidenceofreturningconfidencecamewiththecreationofthecountry’slargestpropertygroup,followingthemergerofMerlinandMetrovacesa toformanentitywithEUR5bnofcombinedassets.
PoliticaldeadlockhasledtoabottleneckindealsintheSpanishregulatedsector,althoughsomeenergyandinfrastructuretransactionslooklikelytogoaheadintheautumn.ThereisalsolittlepublicM&Aactivity,although,withanumberofPEfundslookingtodisposeofportfolioassets,thisshouldleadtobothtradesalesandIPOsinthenearfuture.
Italy’smobilephonemarketisbeingreshapedfollowingtheEuropeanCommission’sdecisiontocleartheEUR20bnmergerofVimpelCom’sWindsubsidiaryandHutchison’s3,thelargestmerger intheItalianmarketsince2007.
MeanwhiletheENAVIPOinJulywasthefirstlistingofanairtrafficcontrollerinEuropeandthefirstdirectprivatisationof2016,ayearinwhichthegovernmentaimstoraiseEUR8bnfromsell-offs.FinancialserviceslookssettobebusierinthecomingmonthsasItalianbanksseektodisposeofnon-performing loanportfolios,anareawhereweareseeinggrowinginterestfromPEfunds.
ASIA PACIFIC (INCLUDING GREATER CHINA) Outbound dominates
Acontinuingstreamofincreasinglydiverseoutbounddeals–particularlyfromChina,butalsoJapan–haskeptthetideofM&Aactivityatrelativelyhighlevels,despiteasharpfallintheoverallvalueofdealsintheregionintheyeartodate.
Dealvolumeshaveheldtheirown,withoutboundactivitycontinuingatarapidpace,eventhoughinboundanddomesticdealswithinChinahaveshownclearsignsofsofteninginrecentmonths.
ThatslowdownreflectsinvestorworriesaboutslowergrowthinChina,thebubblebuildingupinChina’soverheatedpropertymarket,moredistantfearsabouttheoutcomeoftheU.S.presidentialelection,alikelyincreaseinU.S.interestrates,and,toalesserextent,Brexit.Noneofthesefearsseemtobeaffectingoutboundinvestorsunduly,however.
OneofthelargesttransactionsofthequarterwasSoftBank’sGBP24.3bnacquisitionofUK’sARM, aboldmovebytheJapanesetechnologygroup tobuildacommandingpositionintheglobalsoftwaresector.
Dealvolumeshaveheld theirown,withoutboundactivitycontinuingata rapidpace,eventhoughinboundanddomestic dealswithinChinahave shownsignsofsoftening.
ButtheincreasingoutboundactivitybyChineseinvestors,bothstate-ownedandprivate,acrossadiverserangeofsectorscontinuestobeastandoutfeatureoftheglobalM&Amarketthisyear.
Q3sawagroupofChineseinvestors,ledbyGiant,payUSD4.4bntotakecontroloftheIsraelionlinegaminggroup,Playtika.Thelifesciencessectorisalsoahotbedofactivity,whereFosunPharma’sUSD1.3bnbidforGlandPharmainIndiaisjustonemanifestationofgrowingactivityinthisareaaswellasanexampleofanexpectedbuildupofM&AactivitybetweenChinaandIndia.
InAustralia,wesawChinaResourcesandMacquarieagreetobuyupto74%ofthecancerandcardiacservicesgroup,GenesisCare. ThiscontinuesatrendofChineseinvestmentinAustralia’slifesciencessectorwhichhasseen astringofdealsinthelastyear,includingLuyeMedical’sacquisitionofprivatehospitalsgroupHealtheCare,andHongKong-basedBiostime’sacquisitionofSwisseVitamins.
Chineseoutboundinvestmenthasitscomplicationsand,increasingly,nationalinterestandsecurityissuesarehighamongthem.ThenewUKgovernmenthasraisedsecurityconcernsoverChineseinvolvement
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intheUKnuclearindustry.InAustralia,ChinesebidsforKidman&Co.,thegiantlandholdingandcattlefarmconcern,andAusgrid,theNewSouthWaleselectricitygrid,havebothbeenblocked.
U.S.PEfund,Carlyle,hasappointedBrianWilson,chairmanofAustralia’sForeignInvestmentReviewBoard,asanadvisertoitsAsiabuyoutteam. Themovehighlightstheimportanceofunderstandingthepoliticaldecision-makingprocesssittingbehindAustralia’sforeigninvestmentregime.NotwithstandingtheKidmanandAusgriddecisions,theoverwhelmingmajorityofforeigninvestmentapplicationscontinuetobeapproved.
Chineseinvestorsarebecomingmuchmoreadeptatplanningandexecutingoutbounddealsandcompetitionbetweenthemforsought-afterassets isnowmorecommon.AuctionprocesseswilloftenattractseveralChinesebiddersamongtheroster ofpotentialbuyers.
Chineseoutboundinvestmenthasitscomplicationsand,increasingly,nationalinterestandsecurityissuesarehighamongthem.
ChinaisnowthelargestforeigninvestorintotheASEANregionandQ3sawdealsinIndonesia,Singapore,CambodiaandMalaysiaaspartofthegovernment’sprogrammeofsoftpowerdiplomacytosupportitsinterestsintheSouthChinaSea.
Recenthigh-profileinvestmentsincludethoseby DidiChuxingintoGrabandAliBaba’sinvestmentintoLazada,theSingaporebasedregionalonline
shoppingplatform.However,China’sslowdownandreportedmovestocontroltheoutflowofRMBisexpectedtoimpactdealsintheASEANregioninQ4.
InSoutheastAsia,techcompanieshavebeendoinglargefund-raisingsthisyear.InAugust,Go-Jek, theIndonesianmobileride-hailinganddeliveryplatform,raisedUSD550mfrominvestorswhichincludeKKR,WarburgPincus,FarallonCapital andCapitalGroupPrivateMarkets.Itscompetitor, Grab,immediatelyfollowedsuitwithaUSD750mfundraisinginSeptember.
ThisalltookplaceunderthebackdropofUbersellingitsChinaoperationstoDidiChuxingandpotentiallyfocusingmoreofitsresourcesonSoutheastAsia. Italsosignalsgrowingconfidenceintheconsumersectorandrelatedinfrastructure,notablywarehousing,distributionandlogisticsthroughouttheregion.
ThisisexpectedtobearecordyearintermsoftotalvalueofM&AtransactionsinVietnam,attributedtotheaggressivenessofforeigninvestorsfromThailand,SingaporeandJapan,withrealestate,retailandconsumergoods,bankingandfinance allactivesectors.
Lookingahead,weexpecttoseestronggrowth inM&AactivitiesinVietnaminthenearfuture,especiallyinState-OwnedEnterprises(SOE). Agrowingbudgetdeficit,plungingstaterevenueduetolowoilprices,poorperformanceintheagriculturesectorandcapitalneedsforinfrastructurehavepromptedthegovernmenttoacceleratethesaleofSOEshareholdings.Targetsectorsattractinginterestfromforeigninvestorsincludethedairy,brewing,technologyandinsuranceindustries.
InthePhilippines,outbounddealflowstilllooksstrong,withthelikesofEmperador,Aboitiz,URC,Ayala,JollibeeandICTSI,thelatterhavingjustraisedsomeUSD300mtodeveloptheVictoriaInternationalContainerTerminalinMelbourne,Australia.
China is now the largest foreign investor into the ASEAN region and Q3 saw deals in Indonesia, Singapore, Cambodia and Malaysia.”
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© Allen & Overy LLP 2016
Inbounddealflowisstillconsistentwhencomparedtopreviousquarters.InthelargestforeignequityinvestmentintothePhilippinesfinancialservicessector,theBankofTokyo-MitsubishiUFJacquiredapproximately20%ofSecurityBank,thePhilippines’fifth-largestlenderbymarketvalue.TotalisrestructuringitsPhilippinesbusinessandrelateddownstreamfuelsalesjointventurewithFiloil, whilethepowersectoralsoremainsactive.
Weexpecttheinfrastructuresectorwillpickup nowthattheDutertegovernmenthasmadeitacentrepieceofitseconomicpolicyandannouncednewdeals.ButitremainstobeseenifPresidentDuterte’scontroversialrhetoricgetstoneddown orhasanegativeimpactonFDI.
U.S. Mixed messages
WhiletheU.S.marketisstillshowingsomesigns ofresilience,M&Aactivitydiddeclineslightlyafter astrongfirsthalf.Asolidsecondquarterdeliveredreasonsforoptimism,buttheresultsofthethirdquarterhavebeenmarkedlymixed,and2016overallislikelytobewellbelowtheleveloftherecordyearof2015.
TheU.S.M&Amarketisfacingclearheadwinds.LongertermfactorssuchasloweconomicgrowthhavebeencompoundedbymorerecentglobaluncertaintyfollowingtheBrexitvoteintheUK,continuingconcernsaboutaneconomicslowdowninChinaandacontentiouspresidentialelectionintheU.S.
Inaddition,someofthedriversofdealvolumeinpastperiods,suchastaxinversions,are,fornow, nolongerafactor,andthevolumeoflargepubliccompanymergershastailedoff.
Amonghighprofilepublicdeals,therehavebeen asmanyfailuresassuccesses.Forinstance,justasBayersucceededinitspursuitofMonsantowithalandmarkcross-borderstrategicacquisitionvaluedatUSD66bn,Mondelezendeditsoverture forHersheyaftermakingafirstofferinJune.
TheabandonedMondelez/Hersheytie-upisafurtherexampleofarecenttrend:thegrowingnumberofabandoned,withdrawnorterminateddeals.Infact,2016willlikelywindupbeingarecord-breakingyearforbrokendeals,withthevalueofwithdrawnU.S.dealsstandingatUSD533bnfortheyeartodate.
OnefactorbehindthistrendistheincreasinglyaggressivestandbeingtakenbyU.S.antitrust
regulators.TheU.S.JusticeDepartment,forexample,filedsuittoblocktwolargedealsintheinsurancesector–Anthem’sUSD54bnacquisitionofCigna,andAetna’sUSD37bnacquisitionofHumana,althoughthepartiesarevigorouslydefendingbothdeals.
PoliticaluncertaintiesarelikelytobeacontinuingdragonM&Agrowthintheshortandmediumterm.
Nevertheless,strategicconsiderationsarecontinuingtodriveM&Aelsewhere,despitecurrentuncertainty.Intheretailandconsumerproductssectors, forexample,Unilever’sacquisitionofDollarShaveClubandWalmart’sacquisitionofJet.comillustratehowtraditionalbrick-and-mortarenterprisesareseekingtoadjusttheirbusinessmodelsinthefaceofdisruptionsinthee-commercesector.
M&AintheU.S.bankingsectorisalsoincreasing.Analysisofthesetransactionssuggeststhatcostpressures,spurredbyincreasingbankregulation, ispushingbankstowardsmoreM&Aactivity, withsomecommentatorspredictingthatdealvaluesinthesectorwillreachlevelsnotseensince1999.
WhilepoliticaluncertaintiesarelikelytobeacontinuingdragonM&Agrowthintheshortandmediumterm,investorsatleastseemtoberelaxedaboutinterestratepolicy.TheconsensusisthatU.S.ratesareunlikelytoriseuntiltheendoftheyear, andthere’sagenerallyacceptedviewthattheFederalReservewilltakeacautiousapproachtoraisingratesthereafter.
Overall,despitesomeconcernsaboutthepresentenvironmentfordeals,thereisagoodchancethepipelineoftransactionswillcontinue,particularlyascompanieslookforsolutionstoacontinuingquandaryfacingtheminthecurrentlow-growthenvironmentprevailingintheU.S.andglobally–namely,howtoputexcesscashtouseandgrowfasterthanthemarket.
CEE AND CIS Poland shows the way
Whilethevalueandvolumeofannounceddealsacrosstheregionremaineddepressedinthethirdquarter,therearesignsofasignificantpickupinactivityinsomemarkets,particularlyinPoland.
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Araftofgood-sizeddealsacrossseveralsectorsincludinge-commerce,retail,TMT,financialservicesandhealthcarearecurrentlyinthepipelineinPolandwhich,ifsuccessfullycompletedinthecomingmonths,couldhaveacombinedvalueofmorethanEUR5bn.
PendingdealsincludeNaspers’plantosellAllegro,thehighlypopularonlineauctionsite,withPEfundsreportedtobepotentialbiddersforthebusiness.
ThesaleofPlay–Poland’sfourthlargestmobilephoneoperator–couldnowbebackontheagendahavingbeenpostponedbyitsownersearlierthisyear,whileMidEuropaisexploringthedisposaloftheZabkachainof2,600conveniencestores.
WiththeimpactofU.S.andEUsanctionscontinuingtobefelt,Russia’ssearchforalternativesourcesofforeigninvestmentcontinuesbothinAsiaandtheMiddleEast,asearchthathasalreadyresultedinsomesignificantenergydealsin2016.
VladimirPutinopenedSeptember’sEasternEconomicForuminVladivostokwithanappealforgreaterco-operationbetweenRussiaanditsAsianneighboursandaninvitationtoinvestorstohelpinthedevelopmentofRussia’sresource-richFarEastregion.Some60significantinvestmentagreementsweresignedattheevent,mainlyinvolvinginvestorsfromChina,KoreaandJapan.
WiththeimpactofU.S.and EUsanctionscontinuingto befelt,Russia’ssearchforalternativesourcesofforeigninvestment continues.
Meanwhilethegovernment’splanstoprivatisepartofitsstakeinoilgiantRosneftanditssmallerrivalBashneftareonceagainbeingtalkedabout–althoughtheyareprovingtobebothcomplexandpoliticallycontroversial.Thetimingofthesesales,andthelikelyinvestorsinvolved,remainunclear, buttherearesuggestionsthattheprivatisationofthestakeinBashneftmaynowbethefirsttotakeplace.
InSouthEasternEurope,overallactivityremainsmixedbutbroadlypositive.Non-performingloantransactionsaregatheringsteamacrosstheregion,andthereisspeculationaboutwhetherleadingPEfundswillholdontoassetsacquiredinrecentyearsintheshorttermormoveaheadwithdisposals.
Privatisationsremainatalkingpointintheregion, butCroatianelectionsinevitablymeanahiatusonprojectsthereasthecountrytakesstockandforms
anewgovernment.Elsewhere,policymakersarere-evaluatingsell-offplans,insomecasestryingtomovethingsforward,andinothers,manylong-talkedaboutprojectsarequietlybeingshelved.
RumoursaboundthattheSerbiangovernment istakinganotherlookatprivatisingTelekomSrbija.Somelong-talked-aboutprojects–suchasthesaleofupto25%ofthestate-ownedpharmaceuticalsgroupGalenikamightbegainingsome(albeitlimited)traction,butotherwiseprojectsareslidinginto2017.
InHungary,thegovernmentandtheEBRDclosedtheirinvestmentintoErsteBankHungaryinAugust,withthemarketotherwisedominatedbymedium-andsmaller-sizedtechnology,servicesandmediadeals.
IntheCzechRepublic,fundsarefacingtoughcompetitionfromCzech-ownedinvestmentgroupswhotendtobedominatinganyauctionprocesses.
AsthegiantABInBev/SABMillermergernearsfinalisation,themarketisstillwaitingtohearifSABMillerbeerbrandsinPoland,theCzechRepublic,Slovakia,RomaniaandHungarywillbesoldasoneblockortwo.Thedisposals,whichincludetheCzechmarketleader,PilsnerUrquell,wereproposedtowinapprovalfromtheEuropeanCommissionforthemerger.
AraftofPEfunds(KKR,BCPartners,MidEuropaPartners,CVCandCzechinvestmentvehicleR2Ghaveallbeenmentioned)andinternationalbrewersarecirclingthesevaluablebrands–saidtobeworthmorethanEUR5bn.Amongstthem,JapanesebrewerAsahiissaidtobeintheframe,havingalreadyboughtthePeroni,GrolschandMeantimebrands.OtherAsianbiddersmentionedincludeKirinandChinaResourcesEnterprise.
MIDDLE EAST AND NORTH AFRICA Signs of promise
Traditionallyaquietperiodintheregion,thethirdquarterbroughtaconsiderabledipinthevolumeofdeals,bothagainstthepreviousquarterandthesamequarterlastyear.Overallvalueswereup,withthehighestintheUAEasaresultofseverallargedeals.
IntheUAE,FirstGulfBankandNationalBankof AbuDhabi,bothofwhicharelistedontheAbuDhabistockexchange,announcedtheirproposedmergerinJuly.Thenewlycombinedbank,whichwillretainthenameNationalBankofAbuDhabi,willbethelargestbankintheMENAregion,withUSD175bn ofassetsandacombinedmarketcapitalisationof
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USD29.1bn.Itwilloperateaninternationalnetworkofbranchesandofficesthatspans19countries. ThemergeristhefirsttobeimplementedunderthenewUAECommercialCompaniesLawandisexpectedtobecomeeffectiveinthefirstquarterof2017.
InAugust,Dubai-basedadvertisingcompany Media.net,anadvertisingtechnologystart-up, wasacquiredforapproximatelyUSD900mbyaconsortiumofChineseinvestorsledbyZhangZhiyong,thechairmanoftelecomfirmBeijingMitenoCommunicationTechnology.Thedealgives Media.netaccesstotheChineseonlineadvertisingmarket,whichiscurrentlythesecondlargestintheworld.
Notwithstandingthecontinuedvolatilityintheglobalmarkets,theregionisseeingactivityinconsumer-ledsectors,aswellasintechnology,financeandhealthcare.Thereisalsomovementintheenergysector,asgovernmentsfocusonrenewableenergysources,and,evenwiththepersistenceofloweroilprices,therehasbeensomeoilandgasdealactivitythisquarter.
Thetrendofconsolidation thathasbeenseenacross theGCCregioncontinues.
ThetrendofconsolidationthathasbeenseenacrosstheGCCregioncontinues,asgovernmentslookforsynergiesandoverlappingobjectivesin anattempttocutcosts.Longtermdevelopmentplansaimtoreducedependenceonoilrevenues, andpolicymakersareincreasinglyrecognisingtheimportanceofboostingtheprivatesectorandthepositionofSMEs.Thisstrategyofdiversification,alongwithafocusonremovingthebarrierstoprivatesectordevelopment,suchasprovidingaccess tofinanceandclarityontheregulatoryframework, arelikelytoincreaseopportunitiesforM&A.
SUB-SAHARAN AFRICA Looking out
Withaneconomicslowdownaffectingkeyeconomiesacrosstheregionandwithinboundinvestmentslackeningoff,thetransactionsmarkethasbeendominatedbyoutboundinvestment, mostnotablybySouthAfricaninvestorslookingtobuildtheirbusinessesinmorestablejurisdictions.
Thetransactionsmarkethasbeendominatedbyoutboundinvestment,mostnotablybySouthAfricaninvestors.
SouthAfricanretailgiant,Steinhoff,continued itsspreeofinternationaltransactionsduringQ3, notonlycompletingtheGBP597macquisitionofbargainretailerPoundland,butalsolookingtosnapupthelargestbeddingmanufacturerintheU.S.,MattressFirmHoldings,inadealworthUSD3.8bn,includingdebt.
ThetwodealsfollowitsthwartedattempttotakecontrolofHomeRetailGroupintheUK,ownerofArgos,whereitlostouttoSainsbury’sinaGBP1.4bnbidbattle.
ThetrendforincreasedlevelsofoutboundinvestmentbySouthAfricancompanieshasbeenbuildingprogressivelyoverthelast18monthsorso, withretailandrealestateparticularlyhotsectors forthisactivity.Elsewhere,theinternetandmediaconglomerate,Naspers,continuesitssteadyacquisitionofassetsacrosstheworld,notablyin theonlinepaymentspace.
Levelsofinboundinvestmenthavedroppednoticeablyacrossthecontinent.Nigeria–Africa’slargesteconomy–wentintorecessioninthesecondquarteroftheyear,withGDPshrinkingby2.06%.It’sclearthatforeigninvestorsaretakingamorecautiousattitudetothismarketasaresult.ButSouthAfricahasfelttheeffectsevenmoresharply,withforeigninvestmentfallingbysome74%,comparedwitha31%declinefortheregionasawhole.1
Somemarkets–includingEthiopiaandSierraLeone– continuetoseeactivity,andit’snotablethattheUSD305macquisitionofSouthAfricanplasticsmanufacturer,Safripol,byKAPIndustrial(whoselargestshareholderisSteinhoff),alsoattractedinterestfromforeigninvestors.
Keysectorsarealsoshowingsignsoflife,includingfinancialservices.Q3sawRabobank,FMOandNorfundcreateaUSD660minvestmentcompanyspecificallytargetingopportunitiesintheunder-developedbankingsectorinEasternandSouthernAfrica.Telecomsremainsabusysectortoo,bothintermsofinfrastructureandoperatingnetworksandweexpectactivitytocontinuestronglyinthisarea.
Theeconomicandpoliticaloutlookfortheregionlookslikelytoremainrelativelychoppyintheshortterm.Withoilpricescontinuingattheircurrentlow
1_KPMG, What influences foreign direct investment into Africa, 2016
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level,thiswillcontinuetoputpressureonNigeria,whichdependsonoilforthemajorityofitsincome.SouthAfricaiscontinuingtoexperiencesignificantpoliticalturmoilamidanumberofcorruptionscandals,andalthoughtheRandhasstrengthenedalittle,thiscouldbeshortlived.
Moroccocontinuestobeahubforinvestment. OnestandoutdealwastheUSD100minvestmentbyAfricanDevelopmentPartners(ADP)inAtlanticBusinessInternational.TheinvestmentwillallowADPtofurtherdevelopitsnetworkthroughout WestAfricaandacrossSub-SaharanAfrica,ultimatelycontrolledandmanagedbymajorityshareholderBanqueCentralePopulaire.
INDIA Growth and reform
Propelledbyanumberofsignificantdomesticandinbounddeals,thevalueofIndianM&Atransactionsgrewstronglyinthethirdquarterand,withthegovernment’sreformprogrammeaccelerating, weexpectthistrendtocontinuestrongly.
ThestandoutdealofthequarterwasthecomplexrestructuringofinterestscontrolledbytheBirlafamily,wherebyGrasimIndustriesandAdityaBirlaNuvowouldmergetocreateaconglomeratewithannualrevenuesofsomeUSD9bn.Aspartofthedeal,AdityaBirlaFinancialServicesissettobespunoffandlistedandthedealislikelytobecompletedin2017.
Anothersignificantdomesticdealsawtherelativelysmallcementmaker,Nirma,launchaUSD1.4bnbidforLafargeIndia,oneofastringofdisposalsLafargewasforcedtomaketowinantitrustclearanceforitsownmergerwithfellowcementgiantHolcim.
ForeigninvestmentcontinuestoriseasIndia’seconomicrecoveryprogresses.
ForeigninvestmentcontinuestoriseasIndia’seconomicrecoveryprogresses,helpedbyrecentimportantmovesbyNarendraModi’sgovernmenttorelaxFDIcontrolsinkeysectorsincludingdefence,civilaerospaceandpharmaceuticals,wherethelimithasbeenliftedto74%forbrownfieldpharmainvestments.
ThereissomeconcernthattheunexpectedleavevoteintheBrexitreferendumcoulddampeninvestmentbyUKandotherEUinvestors,butIndiaisnowenjoyingforeigninvestmentfromanincreasinglydiverserangeofsources,themostimportantofwhichisChina.Q3sawthebiggest-everChineseinvestmentinIndiawithFosunPharmaagreeingtopayUSD1.26bnforan86%stakeinGlandPharma.
Furtherimportantreformsareunderway,notleasttheintroductionofanewGeneralSalesTaxtoreplaceamyriadofregionalandnationallevies.ThemovehasnowbeenapprovedbyIndia’sUpperHousehavingbeenstalledthereformonths.
NewguidelinesonthesaleofstressedbankassetshavealsobeenintroducedwhichshouldhavetheeffectofspeedingupsalesprocessesandtheoverallurgentworkofriddingIndianbanksoftheconsiderablebaddebtstheyhaveontheirbooks.
Therewassomeconcernattheresignationofthesuccessfulbutsometimescontroversialgovernor oftheReserveBankofIndia,RaghuramRajan, afterjustonethree-yeartermofoffice.Butmostinvestorsseemhappythathehasbeenreplacedbythedeputygovernorinchargeofmonetarypolicy,UrjitPatel.Theexpectationisthatthiswillmeancontinuityratherthanupheavalinpolicyterms.
OverallweremainoptimisticthatM&Aactivitywillcontinuetogrowthisyearandnextwithagoodmix
The economic and political outlook for the region looks likely to remain relatively choppy in the short term.”
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ofsectorscontinuingtobeactive.ItwouldalsonotbesurprisingtoseeChineseactivityinIndiaincreasestillfurtherinthemonthsahead.
LATIN AMERICA Time for a rebound?
Afterableak18months,withmuchoftheregionovershadowedbyeconomicandpoliticalturmoil,therearenowsignsthatconfidenceisreturning tothemarketwitheverylikelihoodthatM&Atransactionswillreboundduringtheremainder of2016andespeciallyintonextyear.
Muchofthatisdowntopolitics.ThepainfulimpeachmentofBrazil’sformerpresident DilmaRousseffisnowcomplete.InArgentina, theMacriadministrationisgraduallyre-establishingthecountry’scredentialsasasafeplacetoinvestandPedroPabloKuczynski’snarrowpresidentialelectionvictoryinPeruhasalsoreassuredinvestorsthankstohispromisetocontinuefavouringforeigninvestmentintothecountry.
ChileandColombiameanwhilecontinuetobenefitfromgreatereconomicstabilityandrelatively stronggrowthforecasts,whileMexico,webelieve, willincreasinglybenefitfromrecenteconomicreforms,attractinginvestorsfromboththeU.S. andEurope,particularlySpain.
AgainstthatbackdropwebelieveM&Aactivity couldsoonreturntolevelsnotseensince2012,helpedbythefactthatbuyerandsellerpriceexpectationsarealsonowmuchmorecloselyaligned.Forinstance,Statoil,theNorwegianoilgiant,hasexploitedlowervaluationstobuyPetrobras’s66%stakeinanoffshoredevelopment intheSantosBasin,adealworthUSD2.5bn.
It’searlydays,ofcourse.Butsomeofthestatisticsmakeencouragingreading,notleastfindingsthatinvestmentinArgentinagrewby436%betweenJanuaryandAugust–admittedlyfromaverylowbase.
ThesurgeofinvestmentinArgentinashouldbe evengreaterin2017,ifthegovernmentholdsitscurrentcourse.PetrobrashasagreedtosellassetsinArgentinatoPampaEnergia,andCitiispressingaheadwithplanstosellitsretailbankingandcreditcardbusinessesinBrazil,ColombiaandArgentina,withSantanderrumouredtobeafrontrunner inArgentina.
Brazil’sinfrastructureandpowersectorswillseeasignificantnumberofdeals.Anestimated25GWofpowergenerationand24,000kmofpowertransmissionassetsareupfordisposalcurrently,eitherbyprivatisationortradesaleorbusinesscombination.
Chineseinvestorsareincreasinglyactiveinthemarket.China’sStateGrid,forinstance,isrumouredtobeconsideringafulltakeoverofSaoPaolopowerdistributor,CPFLEnergia,havingspentsomeUSD1.8bnforastakeinthecompanyinJuly.China’sThreeGorgeshasalsoinvestedintwohydro-electricprojectsinBrazil.
Manyoftheseenergydisposals(andothersintheinfrastructuresector)havebeendrivenbyBrazil’slong-running“CarWash”corruptionscandal, whichisforcingimplicatedcompaniestomakedisposalsathomeandelsewhereintheregion toimprovetheirliquidity.
CanadianinfrastructurefundBrookfieldisactiveacrosstheregionandhasagreedtobuya57%stakein aPeruviantollroadprojectcalledRutasdeLimafromOdebrecht.TheBraziliangroupismakingsignificantassetdisposalshavingbeencaughtup intheCarWashscandal.
Separately,andaspartofabroadexpansionprogrammeinLatinAmerica,theFrenchconstructiongroup,Vinci,hasagreedtopayUSD1.4bntotakeoveratollroadconcessioninLimafromBrazil’sInvepar.
Brazil’sinfrastructureandpowersectorswillseeasignificantnumberofdeals.
WiththeexpectationthatBrazilwillstartedgingoutoftherecessionin2017,theanticipatedeconomicrecoveryisalsoexpectedtolifttransactionsinothersectors,notleastconsumerproducts.KelloggisrumouredtobenegotiatingtheacquisitionofParti, aprocessedfoodcompanyfromthesouthofBrazil,inaUSD1bndeal.
Somedealsarebeingseenasamarkofconfidenceintheregionasawhole.That’scertainlythecasewiththeUSD613minvestmentbyQatarAirways inLATAM,SouthAmerica’sbiggestairlinesgroup, itssecondsuchinvestmentaftertakingasimilarstakeinIAG,ownerofBritishAirwaysandIberia.
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Sector insightsDeal values in many sectors, most notably the 2015 star performers, TMT and life sciences, are sharply lower, not helped by current political and economic uncertainties, which are weighing particularly heavily on the financial services sector.
PRIVATE EQUITY Seeking scale and quality
ItwasalwayslikelythatPEfunds–mostnotablyintheUK–wouldtakesometimeouttodigestthesurpriseoutcomeoftheBrexitvote,and,asexpected,wesawanumberofprocessessloweddown,thoughnotabandoned,duringthesummer.
ButdespitethefactthatthepreciseeconomicimplicationsoftheLeavevoteremainunclear, fundshavereturnedtothefrayandtheautumnpromisestobeagooddealbusier,withanumber oflargetransactionsalreadyintheoffing.
Fundsappeartobemakingaflightforscaleandquality,withtransactionvalueslikelytoincreaseinthemonthsaheadevenifdealvolumesdecline.Biginternationaldealstendtobewellhedgedagainstthesort ofcurrencyvolatilitythathasoccurredsincethereferendumandfundsareprobablytakingtheviewthatitmakessensetoproceed–withcaution.
Interestingly,otherEuropeanmarketshaveremainedprettyactiveduringtheusuallyquietsummerperiod,withtheBeneluxcountriesbeingparticularlybusy inQ3.
AmongstthestandoutdealsweretheUSD1.3bnacquisitionofcybersecurityfirm,AVG,byitsrivalAvast,whoseinvestorsincludeCVCCapitalPartnersandSummit.ThisfollowsagrowingtrendforgreaterPEinvestmentinthecyberandsoftwaresectors,withVistaEquityPartnersaparticularlyactiveinvestor.
Fundshavereturnedtothe frayandtheautumnpromisestobeagooddealbusier.
PAIPartnersisalsoacquiringRoompot,theDutchhotels,resortsandholidaycampbusiness,fromGildeBuyOutPartnersinasecondarydeal.
MeanwhileQSRBelgium,asubsidiaryoftheSwissPEfundKharisCapital,hasboughttheQuickBelgiumandLuxembourgfastfoodrestaurantchainfromFrance’sGroupeBertrand,adealthatwillseeQuick’soutletsturnedgraduallyintoBurgerKings.
Thevalueofsecondarybuyoutshasrisensharply intheyeartodateandthismakessensegiventheoveralleconomicenvironment.FundsstillhaveplentyofcapitaltodeploybutitmakesmoresenseinuncertaintimestobuyassetsfromanotherPEfundthantotrytomountacomplexcorporatecarve-out.
WhileequitymarketshaveremainedsurprisinglycalmintheimmediateaftermathoftheBrexitvote,greatervolatilityremainsadistinctpossibilityinthemonthsahead.Forthatreason,weexpecttoseefewerIPOexitsintheshortterm.
CONSUMER The pace steadies
Asummerofheightenedpoliticalandeconomicuncertaintyhas,asexpected,ledtoadeclineinconsumer-relatedM&Aactivity,withthevalueofdealssignificantlylowerthanlastyear’srecordlevels.
WhiletheBrexitvoteintheUKhasnot,sofar, hadtheimmediatenegativeimpactonconsumerconfidencethatsomehadpredicted,thesectorremainsvulnerabletosuddenswingsinsentimentandspending.ConcernsabouttheoutcomeofNovember’sU.S.presidentialelectionalsoappear tobeweighingoninvestors’minds.
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Soitisperhapsnotsurprisingthatdealmakershavetakentimeoverthesummertoreflectandwewouldexpectthemtoremaincautiousfortherestof2016.
Thedeclineindealvaluesalsoreflectsthefactthat ahighnumberofbigtransformationaldealswereexecutedin2015.Itwasalwayslikelythataperiodofreducedactivitywouldfollow,withthefocusshiftingtosmallerdealsortidying-uptransactions.Forexample,ABInBev’sdisposalofSABMiller’sbeerbrandsinCentralandEasternEurope– saidtobeworthsomeEUR5bn–isstillpending.
However,Frenchfoodgiant,Danone,choseQ3tolaunchaUSD12.4bnacquisitionoftheU.S.naturalandorganicfoodgroupWhiteWaveFoods–itslargestdealinadecadeandonethatwilldoubleitsU.S.revenues.Thischimeswithawidertrendthathasseenfoodmanufacturersandretailerstrytotapintorisingconsumerdemandforhigh-valuenaturalandhealthyproducts,atrendalsoevidentinothersegmentssuchasbeautyandbabyproducts.
Steinhoff,theSouthAfricanretailgroup,continuesitstirelesseffortstodiversifyoutofitshomemarketandtargetgreaterrevenuegrowthinEuropeandtheU.S.
InacaseofthirdtimeluckyinEurope,SteinhoffacquiredPoundland,theUK-baseddiscountstoresbusiness,forGBP597minQ3,havingrecentlymissedoutincontestedbidsforHomeRetailGroup,ownersofArgos,andtheelectricalgoodsretailer,Darty.SteinhoffhasalsopropelleditselfintothefrontlineoftheU.S.homefurnishingsmarketbybuyingNorthAmerica’sleadingbeddingmanufacturer,MattressFirm,forUSD3.8bn.
Equally,smarttechnologyandonlineretailingremainactiveareas,akeyexamplebeingtheproposedacquisitionofSMARTTechnologiesbyTaiwan’sFoxconnTechnologyGroup,supplychainsynergiesreportedlybeingthemaindriver.
TheAsiaPacificregionhasalsoseenaspateofdealsintheclothingandapparelsector.
SouthKorea’sHansae,suppliertobigbrandslikeGAPandNike,hastakena40%stakeinMKTrend,whosebrandsincludeTBJandBuckeroo.BurberryhasrespondedtorecentdisappointingsalesinChinabytakingdirectcontrolofitsfranchisedoutletsthere,followingsimilarmovesinotheroverseasmarketsincludingJapan.Australianfashionretailer,NoniB,hasexpandeditsretailnetworkbybuyingthePrettyGirlfashionchain.
Therehavealsobeensomenotabledealsatthetopendoftheluxurymarket,notleasttheUSD233minvestmentinSotheby’sbyTaikangLifeInsurance,whichhastakena13.5%stakeintheartauctioneer.Thisispartofagrowingdiversificationtrendthat hasalreadyseenChineseinsurersinvestinareas asdiverseasmoviemakingandsoccerteams.
AnotherfeatureontheChinalandscapeisanumberoflarge,pendingdealsinthefoodandbeveragesectorincludingtheauctionbyMcDonald’sofitsbusinessinChinaandHongKong,andthesalebyYumBrands(ownerofKFCandPizzaHut)ofastakeinitsChinabusiness.WeexpectthepipelineofactivityintheconsumersectorinChinatoremainstrongintheshorttomediumterm.
It has been encouragingto see investors with well thought through plans persevering with strategic transactions.”
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ENERGY AND INFRASTRUCTURE Business as usual
AnyinvestornervousnessfollowingtheUK’sBrexitvoteseems,sofar,tohavepassedtheinfrastructuresectorby,withfundscontinuingtoaccumulatefinancetopourintothesectorandadecentpipelineofdealsbuildingupbothintheUKandacrossEurope,evenifQ3itselfwasalittlequietfortransactions.Inpartsoftheenergysector,activityalsoremainedsubdued.
Inthecomingmonthsanumberofimportant dealsaresettogoaheadasplannedintheUK,despitethereferendumresult,includingNationalGrid’sproposedsaleofitsgasdistributionbusinessandtendersfortheM6tollwayconcession.
Suchdealsreflecttheenduringattractionofenergyandnon-energyinfrastructureassetstointernationalinvestorsandthedisproportionateweightofcapitalbuildinguptoinvestinrelativelyscarcetargets. Inthatsense,itisacaseofbusinessasusual.
ThearrivalofanewUKgovernmenthas,however,raisedsomeuncertaintyoverkeygreenfielddevelopments,theexpansionofHeathrowairportandtheHS2high-speedrailproject,tonamebuttwo.Butsuchissuesarelongtermandarenothavinganimmediateimpactondealactivity.
Therearealsoquestionmarksovertheintentions ofChineseinvestorsinanumberofmarketswherenationalsecurityissueshavebeenraisedoverplannedgreenfieldorbrownfieldinfrastructuretransactions–namelyintheUKovertheHinkleyPointnuclearpowergenerationproject,whichisnowgoingahead,andinAustralia,whereaproposedChinesebuyoutofAusgrid,theNewSouthWaleselectricityinfrastructurenetwork,wasblocked.
ItremainstobeseenifChineseinvestorswillnowtakeamuchmorecautiousapproachtootherinvestmentsinpotentiallylesssensitiveareassuchastheUKwaterindustry,orifnationalsecuritywillbeanissueinotherplannedAustralianprivatisations.
Offshorewindcontinuestoattractinterest, withtechnologicaladvancesinbatterystorage andfloatingoffshorewindpromisingfurther futuredevelopment.
Moregenerallyweareseeingthecontinuationofnowwell-establishedtrends.Infrastructurecontinuestoattractanincreasinglybroadrangeofinvestorschasingyieldinalow-interestrateenvironmentwhereaccesstocheapfinanceremainsabundant.
Witharelativeshortageofgoodinvestmentopportunitiesinclassicregulatedassets,weare alsocontinuingtoseethedefinitionofinfrastructurestretchedbyinvestorstoincludebusinessesthatofferinfrastructure-likereturns.Hereclosed-end andPEfundsareincreasinglymeetinginthemiddleintermsofthesortofassetstheyaretargeting.
Thejointacquisitionofairportground-handlingleasingbusiness,TCR,by3iandDeutscheAssetManagementisacaseinpoint–anunregulatedbusinessofferinglong-termcontractedreturns– thathasattractedinterestfrombothinfrastructureandPEinvestors.
Infrastructurecontinuestoattractanincreasinglybroadrangeofinvestorschasingyield.
Theretentionbymanagementofanequityinterest inthebusiness–inthepastrarelyseenininfrastructureinvestments,thoughcommonin PEtransactions–isnowbecomingincreasinglydiscussedwherethesectorsconverge.
Itremainstobeseenwhetherthistrendwilltakehold–particularlygiventhechallengestomanagementliquiditypresentedbythelongerinvestmenthorizonsandprevalenceofconsortiuminvestmentsininfrastructuredeals.Overall,weexpectmanagementequitystakestoremaintheexceptiontotherule.
Q3sawapartialrecoveryandstabilisationintheoilprice.Whilethisiswelcome,itisunlikelytoleadtoanincreaseinM&AactivitywhilethepriceremainsbelowUSD60perbarrel.
FINANCIAL SERVICES Putting a price on Brexit
UncertaintiesthrownupbytheUK’sBrexitvote areundoubtedlyweighingheavieronthefinancialservicessectorthananyother,asinstitutionstry toplanforan,asyet,hardtopredictfuture.
Whilethat’sthecaseit’shardlysurprisingthatdealactivityinthesectorhascontinuedtoshrinkquitedramaticallyintheimmediateaftermathoftheUKreferendum,withvalueandvolumeofdealsfallingsharplyinthethirdquarter.
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Dealactivityinthesector hascontinuedtoshrinkquitedramaticallyintheimmediateaftermathoftheUKreferendum.
WithpassportingrightstotradeacrosstheEUatstake,EuropeanandU.S.bankswithbigpresencesinLondonandclientsthroughoutContinentalEurope,havebeenscenarioplanningformonths.Butfewexpectedthereferendumtoresultinavotetoleaveorthattheywouldneedtoputthoseplansinto action.
Theirtasknowistorevisitthoseplansandtotestthemagainstanumberofscenarios–theworstcasebeingthattheirLondonoperationswilllosetheircurrentaccesstotheSingleMarket.Forsomethatwillinvolvesignificantrestructuring,withjobslikelytobemovedoutoftheUKtootherEUmarkets.
ThedifficultyisthatnoneofthiscanbeplannedpreciselyuntiltheUKgovernmentmakesitsaimsclear,theEUgivesitsreactiontothatposition andArticle50–thetreatymechanismforamemberstatetoleavetheEU–istriggered.
Manybanks,whichhaveinvestedheavilyinLondonoverrecentyears,worrythattheprocessofdisengagingfromtheCitywillalsotakeconsiderablylongerthanArticle50’sprescribedtwo-yeartimetable.Soitwouldnotbesurprisingtoseethempressingfortransitionalarrangementstobeputinplace.
Otherpoliticaluncertaintiesarealsobesettingthe FSsector,notleastNovember’sU.S.elections. TheprospectofaTrumppresidencyisnotahappyoneformostbanks,althoughanti-WallStreetrhetorichasalsobeenafeatureoftheHillaryClintoncampaign.
TheseissuesareimpingingonothermarketstoalesserextentandQ3hasseenactivitycontinueatarelativelybriskpaceinboththeMiddleEastandinAsia.
ThequartersawagreementreachedonthebiggestMiddleEasternbankmergerever–theUSD29bntie-upbetweenGulfFirstandtheNationalBankofAbuDhabitocreateanationalgiantwithsomeUSD175bninassets.
WearecontinuingtoseegoodlevelsofactivitywithintheAsiaPacificregion,withahealthypipelineofdealsbuildingupinkeymarketssuchasIndonesia,Malaysia,thePhilippinesandVietnam.
Astandouttransactioninthequarterwasthe movebySingapore’ssovereignwealthfund,GIC, totakea7.7%stakeinVietnam’sbiggestbank,Vietcombank,inadealrumouredtobeworth
betweenUSD400mandUSD500m.Japan’sMizuhoBankalreadyhasa15%stakeinthebusiness.
Elsewhere,Japaneseinstitutionsaredigestingbankingandinsurancedealsalreadydonebutcontinuetoscouttheregionforfurthertransactionsintheregion’sdevelopingmarketswheretherapidgrowthofamiddleclasscustomerbasepromiseslong-termgrowth.
ConsolidationinChina’sfinancialservicessectorcontinues,atrendwe’venotedinpasteditions.Whilethesedealscansometimesbesizeable, we’veyettoseemuchsignificantactivitybyChinesebanksinthewiderAsiaregion.
LIFE SCIENCES A return to the cutting-edge
It’sfairtosaythatfiscalconsiderations–notablytheefforttocompletetaxinversiondeals–wereabigfactorintherecord-breakingexplosionoflifesciencestransactionsinthelasttwoyears.
Withtaxloopholesincreasinglytightlypolicedwe’veseenasignificantdeclineinthevalueofbig-ticketcross-bordertransactions,andareturntosignificantdealsdrivenbyindustriallogic–oftenatthecuttingedgeofproductdevelopment.
Thebioelectronicstie-upbetweenGSKandVerily,formerlyGoogleLifeSciencesandasubsidiaryofGoogle’sparentcompany,Alphabet,isacaseinpoint.
TheventureisfocusedonbuildingonGSK’swork inusingminiaturisedimplantedelectronicdevicestomanipulatesignalsbetweenthebrainandthenervoussystemasanalternativetodrug-basedremedies.Thetechnologyisbeingusedtotackleconditions asdiverseasasthma,arthritisanddiabetes.
ThenewUK-basedventure,calledGalvaniBioelectronics,willseeGSKtakea55%holding intheventure,andVerily45%butwiththepartnerspledgingtoinvestsomeGBP540moverseven yearsinresearchanddevelopment.
Morebroadly“connectedhealth”–thegrowinginteractionbetweenthehealthcareandtechnologysectors–continuestobeaveryactivesegmentofthemarket.
Here,asinothersectors,Chineseinvestorsareincreasinglybusy,bothathomeandabroad. Inthelastfewyears,China’sthreeinternetgiants– Baidu,AlibabaandTencent–haveallenteredthehealthcaremarket,inasuresignoftheincreasingpromiseofhealthtechnology.
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Othershavealsojoinedtherace,includingGloriaPharmaofHarbin,China,whichearlierthisyearinvestedUSD40minProteusDigitialHealth,aU.S.companyspecialisinginremotehealthmonitoring,andhasanexclusive18-monthoptiontoestablish aJVwithProteusinChina.JilinZixinPharmaceuticalhasalsorecentlyacquiredU.S.genemappingcompany,Nabsys2.0.
Perhapsthemostsignificantindicatorofactivity inthisarea–andfutureM&Atransactions–isthevolumeoffinancebeingpumpedintoconnectedhealthbyventurecapitalfunds,withinvestmentinthefirsthalfofthisyearsaidtoberunningonaparwithtotalfundingin2015.Thisprocesscontinued inQ3withBeijingAllcureMedical,acloud/bigdataradiologystartup,raisingUSD27minitsSeriesA.
Chineseinvestorshavealsobeenattheforefront ofdealmakinginothersegmentsofthelifesciencesmarket.Chinesecross-borderdealscompletedinthequarterincludedtheacquisitionofGlandPharmainIndia,CordlifeGroupinSingapore,DiaMedicaandLipoMedicsintheU.S.andInflaRxinGermany.
Lookingforward,weexpectincreasingtransactionalactivityamongcompaniesoperatingintherelatedfieldsofgenemappingandnewgenetherapies.
InMay,GSK’sStrimvelisgenetherapy–designedtotreatseverecombinedimmunedeficiencyor“boyinthebubble”syndrome–becamejustthesecondgenetherapytobeapprovedinEurope.Q3sawAllerganacquiregenetherapy-basedeyecaregroup,RetroSenseTherapeutics,andPfizertakea78%stakeinBambooTherapeutics.
FollowingSanofi’sfailedbidforMedivation,itnowlookslikelythatPfizerwilltakeoverthebiotechbusinesswithitsmuchhigher,allcashUSD14bn bidforthegroup.InterestinMedivationislargelydowntotwoproducts–Xtandi,thebest-selling
prostatecancertreatment,anditsexperimentaltumourinhibitordrug,Talazoparib.Withreports ofwidespreadinterestinthebusinessfromotherleadingplayersincludingMerck,AstraZenecaandRoche,itremainstobeseenwhereMedivation’sfailedsuitorswillturntheirM&Afirepowernext.
MINING Equilibrium in sight?
Thevalueofminingtransactionscontinuedtodeclinesharplyinthethirdquarter,withadearthofbigticketdealsreflectingacontinuingmismatchbetweenvendorandpurchaserpriceexpectationsasbuyersrefusetopayovertheoddsforassets.
Intheyeartodate,dealvolumeshaveremainedrelativelystable,however,buoyedupbyafairlygoodspreadofsmallandmediumsizedtransactions.
Thepictureisslightlysurprisingasanumberofthemajorplayersarelookingtosellnon-coreassets toreducehighlevelsofdebt.It’sclear,however, thattheyremaindeterminedtoachievedecentvaluesandareinnomind,nor,giventherecentstrengtheningofcommoditypricesandtheuptick inequitymarkets,inanyneedtodohurriedordistressedtransactions.
Themajorsarealsounderpressuretoprovetothemarketthattheyareachievinggoodvalueandthemostobjectivewaytodothatistosellassetsthroughauction.ButPEandspecialistminingfundscontinuetoshunsuchprocesses,preferringinsteadtodobilateraldeals.
Q3didseesomesignificantandinnovativedeals,notleasttheUSD670mventurebetweenGlencoreandEvolution,whichwillseethelattertakea30%
A return to significant deals driven by industrial logic – often at the cutting edge of product development.”
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relativelyfewnewprojectscomingonsteaminthelastfiveyears.That’sleadingtoanoticeablerevivalofinterestinthesectorbyequityinvestorsandcouldbe a precursor to more transactions.
MininglookstobeasectorthatwillberelativelyuntroubledbyBrexitintheshortterm,apartfromgoldbecominganobvioussafehavenatatimeofheightenedcurrencyvolatility.Furtherdowntheline,however,thereisachancethatminerscouldfindithardertoraisedebtfinanceinLondon,traditionallyaglobalhubforsuchtransactions.
TELECOMS, MEDIA AND TECHNOLOGY Some clarity returns
WhilethevalueandvolumeofTMTdealshasfallenwellbelow2015’srecordlevelsintheyeartodate,thetechnologysectorcontinuestoseeastringofsignificanttransactionsandconsolidationinEurope’smobilesectorhasrestartedfollowinganimportantrulingbytheEuropeanCommission.
TheCommissionhasclearedtheEUR20bnmergerbetweenHutchison’s3ItaliaandVimpelCom’ssubsidiary,Wind,tocreateItaly’slargestmobileoperatoraheadofTelecomItaliaandVodafone. Themoveprovidessomeclarityonthethinking ofCompetitionCommissionerMargretheVestager incaseswheremergersreducethenumberofoperatorsinanyonemarketfromfourtothree.
AlthoughsimilardealsinGermanyandIrelandhadbeenallowedtoproceedinearlierrulings,Vestagersignalledachangeoftackwhensheblockedthe
stakeinGlencore’sErnestHenrygoldandcoppermineinAustralia.Inaso-called“streaming”deal,Evolutionwillreceiveallthegoldoutputofthemineaswellasathirdofthecopperoutput.Glencore,lookingtoreduceitsdebtstoUSD17bnthisyear,willcontinuetobetheoperator.
WecouldwellseeapickupinM&Aactivityinthesectorinthecomingmonthsastheoutlookfor avarietyofcommoditiescontinuestoimprove.
Theflighttogoldcontinuestoliftpricesinthissegmentasinvestorsworryaboutcurrencyinstabilityandeconomicuncertainty,andhigher goldpricesarealreadydrivingdealactivity.Lithiumis alsoexperiencingsomethingofabubblethankstodemandfromthebatteryindustry.
But,moresignificantly,it’sclearthatsomemoresophisticatedinvestorsarepositioningthemselvesforanexpectedrecoveryincopperprices.Althoughpriceshavestrengthenedonlymarginally,copperisseenassomethingofabellwethercommoditywhenpricesareonthewayupordown.
Theoutlookforavariety ofcommoditiescontinues to improve.
Ironorehasalso,unexpectedly,stabilisedabove theUSD55mark,whichistranslatingintobetterprofitmarginsforproducersthathavereduceddebtandslashedcosts.
Moregenerallyweareseeingsomeequilibriumrestoredbetweensupplyanddemandinkeysegmentslikecopper,thankstothefactthattherehavebeen
Consolidation in Europe’s mobile sector has restarted following an important ruling by
the European Commission.”
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proposedtakeoverofTelefonica’sO2by3intheUK.Atie-upbetweenDenmark’sTeliaSoneraandTelenoralsocollapsedaftertheyfailedtoagreesuitableremedies.
TheCommissionapprovedtheItaliandealfollowingthecommitmentof3/WindtosellspectrumandinfrastructuretoIliadofFrance,whichwillallowIliadtoentertheItalianmarket.
ThestandouttechdealofQ3wasSoftBank’sGBP24.3bnacquisitionoftheUKsoftwaremakerARM.ThedealisbeingdrivenbytheJapanesecompany’sdesiretoownalargeshareofthetechnologypoweringinternetofthings(IOT) devices.Othersarealsopositioningthemselvesfor themomentsuchdevicesreachmassadoption.
SomesawthedealasavoteofcontinuingconfidenceintheUKM&AmarketfollowingtheBrexitvote.ButothersruedthelossofUKcontrol ofARM,seeingitasproofthattheUKisfailingtoprovidetherightinfrastructuretoallowstart-ups todevelopintoglobaltechnologybusinesses.
WhiletheUK’strackrecordonnurturing“scaleups”remainsquestionable,twofurtherdeals,Informa’sacquisitionofU.S.eventsandpublishingcompanyPenton,andMicroFocus’takeoverofthesoftwarebusinessofHewlettPackardEnterprise,offerfirmevidencethatUKtechisholdingitsownintheinternationalmarket.
Thefragmentedcybersecuritysectorisgettingbusier,withtheIOTagainadriverfordeals.Avast’sUSD1.3bntakeoverofAVGandSymantec’sUSD4.65bntakeoverofBlueCoatareexamplesofconsolidationbetweenestablishedplayers.
ButPEfundsarealsobecomingmoreactiveboth incybersecurityandthewidersoftwareindustry.VistaEquityPartnerscontinuedafreneticround ofcyberandsoftwaredealsbybuyingPingIdentityinQ3,andalthoughHPIncsoldastringofsoftwarebusinessestoOpenText,itisnotablethatthesaleprocessesattractedwidespreadPEinterest.
ChineseinvestorscontinuetobeactiveoutboundinvestorsinTMT,withaparticularfocusonmobilegaming,aswesawwiththeUSD4.4bnacquisitionofIsraelionlinegamesgroupPlaytika,byaconsortiumofChinesebuyers.Butincreasedscrutinybyoverseasregulators,notablytheCommitteeonForeignInvestmentintheUnitedStates(CFIUS),andmuchstrongerinterventionfromChina’sowncompetitionauthority,MOFCOM,meanssuchdealsarenotalwaysplainsailing.
TheproposedtakeoverofNorway’sOperaSoftwarebyChineseinvestorsfellthroughafterfailingtoachieveregulatoryapprovalandtheproposedtie-upbetweenDidiChuxingandUber’sChinesearm– thetoptwoplayersinChina’sride-hailingmarket–hasbeencalledinforMOFCOMreview.
PE funds are becoming
more active both in cybersecurity and the wider software industry.”
M&A Insights | Q3 201622
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Insights, Q3 2016
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Switzerland
Netherlands
Luxembourg
Spain
France
Jersey
Ireland (Republic)
UK
Canada
Mexico
U.S.
A global snapshotTop 20 global inbound target markets and outbound acquirers
Note:thesefiguresrepresentthetotal numberofdealsannouncedbetween 1January2016and20September2016.
KEY
Numberof inboundacquisitions
Numberofoutbound acquisitions
Dataprovidedby
Brazil
Bermuda
1,119 1,567
735 698
235115
446381
115229
310 490
276 234
14
180
78
126
32
35
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© Allen & Overy LLP 2016
Israel
South Africa
Germany
Japan
India
China
Hong Kong
Singapore
Australia
Finland
Taiwan
Top 20 global inbound target markets – Q3 2016
Rank Country Volume of deals
Value of deals USDm
1 U.S. 1,119 361,516
2 UK 735 87,356
3 Switzerland 115 60,726
4 France 381 33,815
5 China 471 27,125
6 Germany 525 24,538
7 Spain 229 20,241
8 Italy 265 19,588
9 Canada 310 18,178
10 Netherlands 276 16,631
11 Sweden 149 15,070
12 Israel 59 14,133
13 HongKong 234 11,634
14 Jersey 14 11,519
15 Finland 94 11,381
16 Australia 270 10,924
17 Brazil 180 10,430
18 Singapore 144 10,000
19 India 220 9,659
20 Japan 112 8,354
Top 20 global outbound acquirers – Q3 2016
Rank Country Volume of deals
Value of deals USDm
1 China 599 141,502
2 Germany 341 125,190
3 Canada 490 118,600
4 U.S. 1,567 110,253
5 Japan 479 62,577
6 UK 698 40,898
7 France 446 40,389
8 HongKong 470 31,633
9 RepublicofIreland 78 30,646
10 Luxembourg 126 14,752
11 Singapore 237 12,750
12 Switzerland 235 12,231
13 Bermuda 32 10,695
14 Sweden 256 10,269
15 Netherlands 234 9,444
16 Taiwan 85 7,744
17 Australia 198 7,726
18 SouthAfrica 89 7,203
19 Spain 115 5,953
20 Mexico 35 5,818
599471
341525
265
149 256 Sweden
59
470234
94
198270237114
220
112 47985
89
Italy
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Dem Rep of the Congo
Finland
Brazil
Israel
Switzerland
United Kingdom
Singapore
Germany
United States of America
Hong Kong
0 285
Morocco
Luxembourg
Sweden
Switzerland
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Spain
Netherlands
France
United Kingdom
United States of America
0 285
Peru
Singapore
Portugal
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Germany
United States of America
0 285
Belgium
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United States of America
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0 285
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0 285
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0 285
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United States of America
Netherlands
France
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0 285
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France
Mexico
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0 285
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Germany
United States of America
Hong Kong
0 285
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Spain
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France
United Kingdom
United States of America
0 285
Peru
Singapore
Portugal
Switzerland
Netherlands
Spain
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United Kingdom
Germany
United States of America
0 285
Belgium
Malaysia
Germany
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United Kingdom
South Korea
Australia
United States of America
China
0 285
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Netherlands
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India
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0 285
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A global snapshotA global snapshot – top markets for the world’s largest acquiring countries
China Germany
Hong Kong 8,234U.S. 31,712Germany 9,956Singapore 2,601UK 3,658
Switzerland 48,626Israel 5,489Brazil 3,569Finland 8,955Dem Rep of the Congo 2,804
Value of deals (USDm)
U.S. 78,056UK 14,840France 12,795Netherlands 1,454Spain 7,204
Austria 3,221Switzerland 883Sweden 1,557Luxembourg 2,100Morocco 799
Value of deals (USDm)
U.S.Canada
U.S. 103,363UK 1,949Australia 591Colombia 3,184Germany 361
Mexico 1,277France 366India 719Switzerland 3,659Spain 1,672
Value of deals (USDm)
UK 23,628Canada 11,392France 6,562Australia 4,436Italy 4,121
Spain 5,326Sweden 11,395Switzerland 3,612Singapore 3,636Jersey 9,331
Value of deals (USDm)
*Thesefiguresrepresentthetotalnumberofdealsannouncedbetween1January2016and20September2016.
M&A Insights | Q3 201626
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0 285
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France Hong Kong
UKJapan
U.S. 18,782UK 31,443France 1,981Germany 1,273India 601
Canada 592Italy 3,108Philippines 827Netherlands 1,179Ethiopia 510
Value of deals (USDm)
U.S. 19,874France 1,027Italy 2,975Netherlands 7,393Spain 1,192
Denmark 908Norway 969South Africa 827Canada 1,663China 396
Value of deals (USDm)
U.S. 26,862Germany 4,225UK 410Italy 2,511Spain 885
Netherlands 806Switzerland 385Portugal 791Singapore 322Peru 1,662
Value of deals (USDm)
China 16,701U.S. 8,657Australia 806South Korea 322UK 583
Singapore 511Canada 1,217Germany 251Malaysia 220Belgium 1,100
Value of deals (USDm)
UK 397U.S. 29,085France 111Germany 24Italy 21
Japan 349Canada 116Brazil 203Switzerland 287Denmark 45
Value of deals (USDm)
Italy 3,990France 2,725Netherlands 147U.S. 3,609Germany 128
Portugal 82Switzerland 1,341Jersey 1,930Sweden 493Israel 226
Value of deals (USDm)
Republic of Ireland Luxembourg
About the research TheunderlyingdataforthisresearchcomesfromThomsonReuters.–Thedatacontainedinthispublicationspans1January2016and20September2016inclusive.
Dataprovidedby
allenovery.com/mainsights
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