Monthly M&A InsIderA mergermArket report on globAl m&A Activity
AUgUSt 2011
Monthly M&A InsIdermergermarket
GlobAl overvIew 01
AmericAS: lAtin AmericA 06
north AmericA 11
ASiA-pAcific 16
eUrope 21
middle eASt & AfricA 27
About MerrIll corporAtIon 32
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CONTENTS
Monthly M&A Insider
global overview
01
While overall M&A activity slipped, the number of announced deals with valuations in excess of US$1bn remained buoyant, edging up by around 3% month on month. There were 36 such transactions carrying a combined deal value of US$132.3bn in the month. Large-cap M&A had its best showing in North America where a spate of big deals came to market led by Express Scripts’ agreed acquisition of Medco Health Solutions for US$33.4bn. The deal is the second largest by value to come to market globally in the year to date, surpassed only by AT&T’s pending acquisition of T-Mobile USA for US$39bn announced in March.
If the combination of Express Scripts and Medco Health, whose core activities are to process and make payments for insurance-covered prescription claims, is successful, it will create the largest pharmacy benefits management company in the US. However, with the prospect of such a heavily consolidated market, the deal is expected to face tough scrutiny from antitrust authorities. Clearly, the two firms will be crossing their fingers for clearance as the tie-up will be important for their future growth. The industry is in the midst of change with growing competitive pressures from smaller rivals and the forthcoming overhaul of the US healthcare system, which gives clients an expanded range of coverage options.
Elsewhere, the second largest global transaction announced in July is particularly noteworthy, not simply for its size but because it sees BHP Billiton return to the deal market after a number of failed attempts at transformational M&A in recent years with the likes of PotashCorp and Rio Tinto. The deal
in question will see the Australian resource major move to acquire Houston-based Petrohawk Energy Corporation for a consideration of US$14.8bn. This time BHP is minimising risks that shareholders will reject the offer by paying a handsome premium of some 60% over the previous month’s trading price.
Meanwhile, the summertime holidays are now upon us in the northern hemisphere. It is a time of year that always sees a lull in global dealmaking, particularly in the month of August. In 2010, for instance, the month-on-month fall in deal activity was 12.6%, a little below the mean average of 16% witnessed over 2005 to 2010. This year, however, there are signs the abatement may be more pronounced. Investor confidence is shaky. Sovereign debt worries in the eurozone and the US as well as stubbornly weak economic indicators in core economies have dampened the appetite for risk, causing capital flight toward safe-haven investments.
Nowhere has this been more evident than in global equities markets. Massive sell-offs in early August saw the world’s leading stock indices record daily declines reminiscent of the heady days of the financial crisis. Punctured investor confidence and depressed stock prices are a merciless scourge for companies eyeing public share offerings. With growing wariness among investors and shareholders at the moment, dealmakers may also put on hold any big announcements that could result in further downward pressure on their share prices.
gLoBAL ovERvIEW
Head of Research: Elias Latsis
Editor: Felicity James
For advertising opportunities contact:
Erik Wickman
Tel: + (1) 212 6863329 [email protected]
Global overview: Matthew Albert
Latin America: Urna Chakraborty
North America: Jason Cozza
Asia-Pacific: Rus Beasley
Europe: Samuel Tedjasukmana and Damien Julliard
Middle East & Africa: Yannis Papacostas and Marie-Laure Keyrouz
GLobAL ovERvIEW
THE gLoBAL M&A MARKET LoST MoMENTUM IN JULY WITH gLoBAL DEAL voLUME FALLINg BY 12% FRoM FIgURES IN JUNE. AggREgATE DEAL vALUE, oN THE oTHER HAND, RoSE BY AN IMPRESSIvE 18% To US$188.9BN IN THE MoNTH, BoLSTERED BY A FLURRY oF BIg-TICKET DEAL ANNoUNCEMENTS.
Monthly M&A Insider 02
globAl overvieW
TREND gRAPHS
GlobAl M&A quArterly trend
0
200
400
600
800
1,000
1,200
1,400
Q311*
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Valu
e (U
S$bn
)
Total value Mid-market value
Num
ber of deals
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Total volume Mid-market volume
0
50
100
150
200
250
300
350
400
Q311*
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Valu
e (U
S$bn
)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
100
200
300
400
500
600
700
800
900
GlobAl M&A AnnuAl trend GlobAl M&A AnnuAl prIvAte equIty trend
0
500
1000
1500
2000
2500
3000
3500
4000
YTD 2011*201020092008200720062005
Valu
e (U
S$bn
)
Total value Mid-market value
Num
ber of deals
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Total volume Mid-market volume
0
100
200
300
400
500
600
700
800
900
YTD 2011*201020092008200720062005
Valu
e (U
S$bn
)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
500
1,000
1,500
2,000
2,500
3,000
3,500
GlobAl M&A quArterly prIvAte equIty trend
Monthly M&A Insider 03
globAl overvieW
TREND gRAPHS
GlobAl M&A sector breAkdown ytd 2011
GlobAl GeoGrAphIc breAkdown ytd 2011
vALUE
vALUE
vOLUME
vOLUME
23.8%
4.3%
0.3%
2.4%4.1%2.1%
0.3%
10.7%
1.4%
11.8%
16.7%
15.1%
7.1%
Industrials & Chemicals
TMT
Consumer
Business Services
Energy, Mining & Utilities
Financial Services
Pharma, Medical & Biotech
Construction
Leisure
Transportation
Real Estate
Agriculture
Defence
1.8% 4.9%
46.5%31.7%
15.1% Asia-Pacific
Europe
North America
Middle East & Africa
Latin America
3.1%3.8%
1.1%1.3%
9.3%
8.7%
0.3%
12.9%13.0%
14.8%
20.0%3.8%
7.9%
Industrials & Chemicals
TMT
Consumer
Business Services
Energy, Mining & Utilities
Financial Services
Pharma, Medical & Biotech
Construction
Leisure
Transportation
Real Estate
Agriculture
Defence
4.6%2.4%
32.4%
41.2%
19.4% Asia-Pacific
Europe
North America
Middle East & Africa
Latin America
Monthly M&A Insider 04
globAl overvieW
TREND gRAPHS
GlobAl M&A deAl sIze breAkdown
vALUE vOLUME
0
10
20
30
40
50
60
70
80
90
100
YTD 2011*201020092008200720062005
38.8%
15.5%
22.1%
8.5%
15.1%
43.9%
16.3%
20.4%
7.3%
12.3%
39.8%
16.9%
23.0%
7.9%
12.5%
42.7%
15.0%
19.1%
8.8%
14.3%
40.6%
16.4%
20.6%
7.9%
14.5%
27.5%
21.0%
27.6%
9.3%
14.6%
33.8%
19.9%
24.9%
9.1%
12.3%
<US$250m or undisclosed value
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
Per
cent
age
80
82
84
86
88
90
92
94
96
98
100
YTD 2011*201020092008200720062005
<US$250m or undisclosed value
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
0.7%
1.0%
4.5%
4.7%
89.2%
0.7%
1.2%
5.0%
4.7%
88.4%
0.7%
1.3%
5.5%
5.1%
87.4%
0.6%
0.9%
3.9%
4.6%
90.1%
0.5%
1.0%
3.8%
3.9%
90.9%
89.1%
4.5%
4.8%
1.2%
0.4%
1.3%
5.4%
5.2%
87.5%
0.7%
Per
cent
age
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LATIN AM
ERICA
LATIN AMERICAA MERgERMARkET M&A REpoRT oN
Monthly M&A Insider 06
July’s top deal is the US$3.8bn acquisition of an 80% stake in peru-based AFp Integra SA, a 33.7% stake in peru-based InVita Seguros de Vida SA and INg groep’s Latin American pensions, life insurance and investment management operations by Colombia-based grupo de Inversiones Suramericana SA. Announced on 25 July 2011, this acquisition will enable grupo de Inversiones to further enhance the American, European, and Asian insurance and pension businesses of INg, and is expected to be completed by the end of 2011.
Latin American private equity firms are continuing their quiet spell with only two buyouts collectively worth US$557m and one exit worth US$512m - a historic low for Latin American buyouts. Reports are indicating that although close to US$25bn may be available for private equity investments in Latin America, these funds may be harder to reach than it appears. This is due to internal regulatory demands and a new focus on domestic investment, which is the case in Mexico and Brazil.
Looking forward, Carlos Slim Helú-owned America Móvil has put in a bid for the remaining 40% stake of its former parent company Telmex that it does not already own, in a move to consolidate Helú’s telecommunications holdings. The deal would give the Mexican billionaire full control of Mexico’s largest landline phone service provider. This bid is in part an effort to defend the company’s market share from competitors like grupo Televisa, which is also introducing its own phone service. America Móvil is one of the biggest phone service providers in Latin America with 236 million wireless subscribers.
LATIN AMERICA M&A HAS dIppEd To 35 dEALS woRTH US$8.1BN IN THE MoNTH oF JULy. ENERgy, MININg & UTILITIES IS THE SECToR wITH THE HIgHEST MARkET SHARE FoR THIS qUARTER, wITH 25 dEALS woRTH US$1.2BN. ALwAyS A STRoNg pRESENCE, BRAzIL HoLdS 66.1% oF THE MARkET By VALUE ANd 54.9% By VoLUME IN THE yEAR To dATE, wITH A ToTAL oF 169 dEALS woRTH US$44.4BN. INTERESTINgLy, CHILE ALSo HoLdS A LARgE poRTIoN oF THE M&A MARkET FoR THE yEAR To dATE, CoMpRISINg 9.9% oF THE MARkET SHARE By VALUE ANd 8.8% By VoLUME wITH 27 dEALS woRTH US$6.7BN.
07
LATIN AM
ERICA
Monthly M&A Insider
Top 10 LATIN AMERICAN ANNouNCEd dEALs of ThE MoNTh (JuL-11)Announced Bidder company Target company Target dominant
sectorseller company Exit multiples (x) Bid premia
1-day before
deal value
(us$m)Revenue EBITdA p/E
25-Jul-11 grupo de Inversiones Suramericana SA
AFp Integra SA (80.00% stake), InVita Seguros de Vida SA (33.70% stake), and INg groep NV (Latin American pensions, life insurance and investment management operations)
Financial Services INg groep NV 4.0 14.0 - 3,848
08-Jul-11 TIM Celular SA AES Atimus group TMT Companhia Brasiliana de Energia
7.6 - 1,015
13-Jul-11 Fleury SA Labs Cardiolab Exames Complementares SA
pharma, Medical & Biotech
Rede d'or - 775
15-Jul-11 ontario Teachers' pension plan Board
Esval SA (24.40% stake) and Empresa de Servicios Sanitarios del Bio Bio SA (38.50% stake)
Energy, Mining & Utilities
Corporacion de Fomento de La produccion
- 557
14-Jul-11 Intercontinental Exchange, Inc.
Cetip SA (12.44% stake) Financial Services Itau Unibanco Holding SA and Advent International Corporation
26.4 53.6 54.6 4.7% 512
08-Jul-11 Light SA Renova Energia (26.20% stake)
Energy, Mining & Utilities
-39.1% 230
20-Jul-11 Mitsui & Co Ltd Santa Vitoria Acucar e Alcool Ltda (50.00% stake)
Industrials & Chemicals
The dow Chemical Company
- 200
18-Jul-11 American Tower Corporation
Millicom International (Colombian telecom towers)
TMT Millicom International Cellular SA
- 182
26-Jul-11 United phosphorus Limited
dVA Agro Brazil (51.00% stake)
Industrials & Chemicals
dVA International gMBH 2.3 - 150
08-Jul-11 Banco BMg SA Banco Schahin SA Financial Services n/a n/a - 147Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being Latin Americadata correct as of 04-Aug-11
Source: mergermarket
Top dEALS
LATIN AM
ERICA
Monthly M&A Insider
TRENd gRApHS
LATIN AMERICAN M&A quARTERLy TRENd
0
10
20
30
40
50
60
70
Q311*
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Total value Mid-market value
Num
ber of dealsValu
e (U
S$bn
)
0
20
40
60
80
100
120
140
160
180
Total volume Mid-market volume
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Q311*
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Valu
e (U
S$m
)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
2
4
6
8
10
12
14
16
LATIN AMERICAN M&A ANNuAL TRENd LATIN AMERICAN M&A ANNuAL pRIvATE EquITy TRENd
0
20
40
60
80
100
120
140
160
180
YTD 2011*201020092008200720062005
Total value Mid-market value
Num
ber of dealsValu
e (U
S$bn
)
0
100
200
300
400
500
600
Total volume Mid-market volume
0
1,000
2,000
3,000
4,000
5000
6,000
7,000
8,000
YTD 2011*201020092008200720062005
Valu
e (U
S$m
)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
5
10
15
20
25
30
35
40
45
50
LATIN AMERICAN M&A quARTERLy pRIvATE EquITy TRENd
08
LATIN AM
ERICA
Monthly M&A Insider
TRENd gRApHS
LATIN AMERICAN M&A gEogRAphIC BREAkdowN yTd 2011
VALUE VoLUME
66.1%
9.9%
6.6%0.1%
0.5%0.3%
0.3%
2.5%1.2%
4.4%
7.8%0.3%
Brazil
Chile
Colombia
Dominican Republic
Guatemala
Ecuador
El Salvador
Mexico
Panama
Peru
Uruguay
Argentina
1.0%
1.0%
8.1%
8.8%
0.6%
0.6%
0.3%
1.3%
0.6% 8.1%
54.9%
5.8%
0.3%7.8%
Brazil
Chile
Colombia
Costa Rica
Dominican Republic
Guatemala
Ecuador
El Salvador
Honduras
Mexico
Panama
Peru
Uruguay
Venezuela
Argentina
LATIN AMERICAN M&A sECToR BREAkdowN yTd 2011
VALUE VoLUME
0.3%
0.5%
19.0%
10.0%
29.0%
0.1%0.1%
3.0%
15.0%
2.0%
13.0%
1.0%
2.0%
6.0%
Consumer
Energy, Mining & Utilities
Industrials & Chemicals
Business Services
Financial Services
Pharma, Medical & Biotech
Technology
Transportation
Construction
Agriculture
Telecommunicatons
Leisure
Real Estate
Defense
18.0%
17.0%5.0%
4.0%
4.0%
3.0%
3.0%
2.0%
2.0%
2.0%1.0%
1.0%
10.0%
16.0%12.0%
Consumer
Energy, Mining & Utilities
Industrials & Chemicals
Business Services
Financial Services
Pharma, Medical & Biotech
Technology
Transportation
Construction
Agriculture
Media
Telecommunications
Leisure
Real Estate
Defense
09
10
LATIN AM
ERICA
Monthly M&A Insider
LATIN AMERICAN M&A dEAL sIzE BREAkdowN
VALUE VoLUME
0
10
20
30
40
50
60
70
80
90
100
YTD 2011*201020092008200720062005
<US$250m or undisclosed value
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
17.9%
7.2%
25.8%
21.3%
27.8%
46.9%
8.3%
21.8%
10.3%
12.7%
16.2%
10.8%
31.3%
16.2%
25.5%
30.5%
20.3%
24.5%
10.0%
14.7%
9.2%
29.3%
36.7%
10.1%
14.8%9.0%
6.6%
24.5%
18.2%
41.7%
20.1%
20.6%
34.4%
11.5%
13.4%
Per
cent
age
20
30
40
50
60
70
80
90
100
YTD 2011*Y2010Y2009Y2008Y2007Y2006Y2005
0.3%
4.1%
7.1%
88.1%
1.0%
5.4%
7.4%
85.1%
0.2%
5.3%
6.4%
87.4%
0.6%
4.7%
5.3%
88.2%
0.3%
6.9%
5.4%
85.6%81.8%
6.3%
8.4%
1.4%0.3% 1.0% 0.7% 1.2% 1.8% 2.0%
7.8%
6.5%
83.8%
0.6%
Per
cent
age
1.3%
<US$250m or undisclosed value
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
TRENd gRApHS
NORTH
AMERICA
A mergermArket m&A report on
11Monthly M&A Insider
nortH AmerICA
PhArMA, MedIcAl & BIotech sees ActIvIty sPIke In July
In July, nortH AmerICA sAw A spIke In AggregAte deAl vAlue In tHe pHArmA, medICAl & BIoteCH spACe. tHe BIggest deAl of tHe montH wAs AnnounCed By express sCrIpts In Its reCommended offer to ACquIre medCo HeAltH solutIons for us$33.4Bn (After net deBt). tHe trAnsACtIon Is expeCted to fACe rIgorous regulAtory sCrutIny.
In the year to date, the pharma, medical & Biotech sector has seen 253 deals valued at us$85bn, and is the third largest sector in north America behind Industrials & Chemicals (us$94.9bn) and energy, mining & utilities (us$182.6bn).
Proposed Medco deal expected to face heavy investigation from the Ftcmedco and express scripts have said publicly that they believe they will be successful in working through the regulatory review process, which they hope to complete in 1H12. the national Community pharmacists Association (nCpA) has already begun proceedings to oppose the merger, according to kevin schweers, nCpA vice president of public relations.
Cvs’s acquisition of Caremark endured a lengthy investigation and was eventually cleared, only to be reopened for a more comprehensive inquiry that is still ongoing at the federal trade Commission (ftC). the Caremark acquisition represented a vertical concern that Cvs – a retail pharmacy – had not previously operated a pBm business.
regulatory attorneys have said the medco-express scripts merger is more of a pure horizontal deal, something that may engender more concern at the ftC. By and large, the ftC has shown a high level of interest in consolidation in the pBm market, and healthcare in general.
Petrohawk bid draws interest in us shale market from foreign buyersBHp’s proposed acquisition of petrohawk energy Corporation, valued at us$14.8bn and the biggest energy deal from north America in July, could intensify interest from foreign buyers in the us shale market.
foreign companies are the most likely bidders to follow BHp Billiton’s path into the north American oil and gas patch, moving from joint venture deals to whole-company acquisitions, according to several sources familiar with foreign buyers.
melbourne, Australia-based BHp’s bid for petrohawk energy represents a large premium for the Houston, texas-based company. other international bidders will be able to pay big premiums because of ‘weak-dollar m&A’ opportunities, as speculated by industry sources.
12
NORTH
AMERICA
Monthly M&A Insider
top deAls & expeCted deAls
toP 10 north AMerIcAn Announced deAls oF the Month (Jul-11) Announced Bidder company target company target dominated
sectorseller company exit multiples (x) Bid premia
1-day before
deal value(us$m)revenue eBItdA P/e
21-Jul-11 express scripts Inc medco Health solutions Inc
pharma, medical & Biotech
0.5 11.2 22.6 26.8% 33,430
14-Jul-11 BHp Billiton ltd petrohawk energy Corporation
energy, mining & utilities
17.1 33.2 49.7 60.5% 14,760
20-Jul-11 ecolab Inc nalco Holding Company Industrials & Chemicals
1.9 10.9 27.5 44.7% 8,138
13-Jul-11 kinetic Concepts Consortium
kinetic Concepts Inc pharma, medical & Biotech
2.8 9.4 19.2 22.5% 5,663
25-Jul-11 validus Holdings ltd transatlantic Holdings Inc financial services
n/a n/a 8.3 5.7% 4,170
11-Jul-11 International paper Company
temple-Inland Inc Industrials & Chemicals
1.1 10.4 20.1 4.9% 4,051
20-Jul-11 China national offshore oil Corporation ltd
optI Canada Inc energy, mining & utilities
9.7 89.1 0.1 9.1% 2,432
01-Jul-11 kohlberg kravis roberts & Co, silver lake partners, and technology Crossover ventures
the go daddy group Inc (undisclosed stake)
technology 2,250
20-Jul-11 CvC Capital partners limited
Bny Convergex group llC (majority stake)
technology the Bank of new york mellon Corporation and gtCr llC
1,900
01-Jul-11 providence equity partners llC
Blackboard Inc Business services
3.7 30.9 93.8 7.0% 1,668
*Indicates lapsed deal Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being north America (us + Canada) data correct as of 05-Aug-11
source: mergermarket
13
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 the Clorox Company Consumer Icahn enterprises lp
goldman sachs (t); Jp morgan (t)
8,957 on 15-Jul-11, Icahn partners lp proposed to acquire the Clorox Company at us$76.5 per share. some sources close to the situation expressed their doubts about the seriousness of Icahn's offer, given that the bidder had not secured committed financing prior to making the proposal. on 18-Jul-11, Clorox announced that its Board of directors had determined that Icahn's offer significantly undervalues the company and is thus not in its shareholders' best interest. subsequently to that announcement, Clorox adopted a stockholder rights plan and declared a dividend of one right on each outstanding share of Clorox's common stock. on 20-Jul-11 Icahn increased its bid to us$80 per share, which was again again rejected by Clorox's Board of directors. In the meantime, it has been speculated that Clorox might receive higher competing offers.
expected deal ralcorp Holdings Inc Consumer ConAgra foods Inc Credit suisse (t); Centerview partners (B)
4,325 on 4-may-11, ConAgra foods made an offer to acquire ralCorp Holdings, Inc. for us$86 per share or for a total consideration of us$4.9bn, in addition to the assumption of ralCorp's debt of us$2.5bn. the expected transaction would allow ConAgra to expand its presence in the private label segment and to consolidate its position as a packaged food company. nonetheless, ralCorp's Board of directors unanimously rejected the proposal and adopted a shareholder rights plan. In the meantime, ralCorp has decided to separate the main company from post foods, ralCorp's cereal division, in a tax-free spin-off to shareholders. some sources close to the transaction say that if the spin-off does take place, ConAgra might acquire the private label business.
expected deal Barnes & nobles Inc Consumer liberty media 1,054 liberty media conducted due diligence on Barnes & nobles on 02-Jun-11, although investors are banking on a higher offer. on 02-Jul-11, liberty Chairman John malone said in an interview at Allen & Co's media conference that he is hopeful that a deal at the right price will happen. steve riggio, Barnes & nobles' Chairman, stated he could not think of a better partner than John malone.
expected deal 99 Cents only stores Consumer leonard green & partners lp and schiffer/gold family
lazard (t) 1,370 99 Cents only stores has received an acquisition proposal from the schiffer/gold family and leonard green & partners lp. the consideration in the proposal is us$19.09 per share in cash. the offer was received on 11-mar-11. outside analysts have concluded, however, that 99 Cent only stores could receive a higher offer.
expected deals based on confirmed announcements by companies involved
PIPelIne oF north AMerIcAn exPected deAls
top deAls & expeCted deAls
14
NORTH
AMERICA
Monthly M&A Insider
trend grApHs
north AMerIcAn M&A quArterly trend
0
100
200
300
400
500
600
Q311*
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Valu
e (U
S$bn
)
Total value Mid-market value
Num
ber of deals
0
200
400
600
800
1,000
1,200
1,400
1,600
Total volume Mid-market volume
0
50
100
150
200
250
Q311*
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Valu
e (U
S$bn
)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
50
100
150
200
250
300
350
north AMerIcAn M&A AnnuAl trend north AMerIcAn M&A AnnuAl PrIvAte equIty trend
0
200
400
600
800
1,000
1,200
1,400
1,600
YTD 2011*201020092008200720062005
Total value Mid-market value
Num
ber of dealsValu
e (U
S$bn
)
0
1,000
2,000
3,000
4,000
5,000
6,000
Total volume Mid-market volume
0
50
100
150
200
250
300
350
400
450
500
YTD 2011*201020092008200720062005
Valu
e (U
S$bn
)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
200
400
600
800
1,000
1,200
north AMerIcAn M&A quArterly PrIvAte equIty trend
15
NORTH
AMERICA
Monthly M&A Insider
trend grApHs
north AMerIcAn M&A sector BreAkdown ytd 2011
vAlue volume
15.0%
1.8%
3.2%9.0%
9.0%
29.0%
5.0%
13.0%
2.0%
5.0%
6.0%<1.0%<1.0% Industrials & Chemicals
Technology
Business Services
Pharma, Medical & Biotech
Energy, Mining & Utilities
Financial Services
Consumer
Leisure
Media
Construction
Transportation
Real Estate
Telecommunications
17.0%
15.0%
13.0%
2.9%
12.0%
10.0%
3.0%
3.0%
9.0%
1.0%
10.0%
<1.0% 1.0%1.8%
<1.0%
Industrials & Chemicals
Technology
Business Services
Pharma, Medical & Biotech
Energy, Mining & Utilities
Financial Services
Consumer
Leisure
Media
Construction
Transportation
Real Estate
Telecommunications
Agriculture
Defense
north AMerIcAn M&A deAl sIze BreAkdown
vAlue volume
0
10
20
30
40
50
60
70
80
90
100
YTD 2011*201020092008200720062005
<US$250m or undisclosed value
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
46.6%
15.8%
18.0%
7.0%
12.6%
51.6%
15.0%
17.3%
6.4%
9.7%
42.9%
19.0%
21.8%
6.6%
9.6%
49.3%
13.8%
17.5%
7.2%
12.2%
58.8%
13.3%
13.2%
5.4%
9.2% 12.5%
9.6%
27.6%
18.1%
32.2%
45.7%
20.9%
17.6%
7.2%
8.6%
Per
cent
age
75
80
85
90
95
100
YTD 2011*201020092008200720062005
0.9%1.3%
4.5%
4.9%
88.5%
1.0%
1.5%
5.4%
5.3%
86.8%
1.1%
1.8%
6.3%
5.3%
85.6%
0.9%
3.7%
4.1%
90.6%
1.0%
3.5%
3.8%
91.0%
87.5%
5.2%
5.6%
1.1%1.1%
1.9%
5.7%
6.0%
85.3%
0.7% 0.7% 0.6%
<US$250m or undisclosed value
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
Per
cent
age
ASIA-PAcIfIc
A mergermArket m&A report on
Monthly M&A Insider 16
ASIA-pAcIfIc
Strong activity in TMT sectorthe month kicked off with a bang when Vodafone group, the Uk-based mobile telecommunications network company, agreed to acquire a 33% stake in Vodafone essar Limited, the India based telecom carrier, from essar group – the India-based conglomerate – for a consideration of US$4.6bn. this acquisition follows Vodafone’s 2007 purchase, when it made its foray into the Indian market, spending US$13.7bn for a large stake in the Indian telecom (for which it is now in the throes of a tax battle with the Indian government). After the recent acquisition, Vodafone will own a 74% stake and the remaining 26% will be owned and controlled by Indian shareholders in compliance with Indian foreign direct investment rules.
the Vodafone deal brought the tmt sector to the top in terms of value with a total of US$7.2bn, accounting for almost one quarter of total dollars spent in July. Witnessing more than just a few large deals, the sector also accounted for a significant portion of deal volume, with 23 transactions or 16% of deals for the month. the second largest deal in the sector saw another Indian acquisition when the Walt Disney company, a US-based multimedia company, made an offer to acquire the shares that it does not already own in UtV Software communications Limited, a BSe and nSe dual-listed tV software company for US$453m.
Deals Down UnderAcquisitions of Australian targets brought in the most value over the month with approximately US$10.4bn in deals. Unsurprisingly, in this mineral-rich nation, the majority of transactions took place in the energy, mining & Utilities sector and accounted for 70% of value but only 36% of volume – in line with characteristically large deals. However, interestingly, the second largest deal took place domestically in the transportation sector when private equity bidder, cp2, an Australia-based infrastructure fund manager, agreed to acquire the remaining 65% securities that it does not already own in connecteast group, an ASX-listed tollway operator, for US$2.7bn.
Chasing China’s consumerchina’s consumer foods sector continues to draw foreign investment. In perhaps one of the month’s most popular deals, Switzerland-based nestle, a global food and beverage company, announced a proposal to acquire 60% of Hsu fu chi International, a china-based snack and candy maker, for US$1.7bn. the proposed transaction will allow nestle and the founding members of Hsu fu chi to create a joint venture that will foster a long-term partnership in expanding the business and preserving the legacy of the Hsu fu chi brand. However, the deal has yet to be approved by chinese regulators who enforce the country’s stringent anti-monopoly laws. the two companies’ combined market share would be less than 10% of china’s total confectionery market, and regulatory approval is not expected to be a problem. And, with the late-June approval of Uk-based Diageo’s 60% stake buy in Sichuan Swellfun, a chinese producer of liquor, things are looking good for nestle – but only time will tell.
ASIA-pAcIfIc m&A ActIVIty oVer tHe montH of JULy SAW Some BIg SpenDS, WItH US$29.5Bn In totAL VALUe for ASIAn tArgetS repreSentIng An IncreASe of 57% from LASt montH AnD A 27% rISe from tHe trAILIng tHree-montH AVerAge. In contrASt, JULy SAW m&A VoLUme fALL to 142 DeALS – A DecLIne of 9% from tHe preVIoUS montH - AS m&A In tHe regIon contInUeD ItS montH-oVer-montH trenD. BUt, WItH tHe LArger trAnSActIonS, BIDDerS Spent An AVerAge of US$207m on m&A DeALS oVer tHe montH, WHIcH IS A 20% IncreASe from tHe yeAr-to-DAte fIgUre.
17Monthly M&A Insider
ASIA-PAcIfIc
top DeALS
Top 10 ASIA-pACIfIC AnnoUnCeD DeAlS of The MonTh (JUl-11)Announced Bidder company Target company Target dominant
sectorSeller company exit multiples (x) Bid premia
1-day beforeDeal value
(US$m)Revenue eBITDA p/e
01-Jul-11 Vodafone group plc Vodafone essar Limited (33.00% stake)
tmt essar group - 5,460
11-Jul-11 peabody energy corporation; and Arcelormittal SA
macarthur coal Limited (83.80% stake)
energy, mining & Utilities
6.4 20.3 32.0 37.4% 3,759
22-Jul-11 cp2 connecteast group (65.00% stake)
transport 14.7 22.5 (loss) 22.2% 2,658
15-Jul-11 cJ gLS corporation; and cJ cheiljedang corporation
korea express co Ltd (37.62% stake)
transport Asiana Airlines, Inc.; Daewoo engineering and construction company Limited
2.9 43.3 57.2 119.5% 1,738
11-Jul-11 nestle SA Hsu fu chi International Ltd consumer 4.5 19.9 30.3 9.1% 1,700
15-Jul-11 Joy global Inc International mining machinery Holding Limited
Industrials & chemicals
the Jordan company LLc
4.6 19.5 25.0 29.8% 1,397
18-Jul-11 Hanlong mining Investment pty Ltd
Sundance resources Limited (81.40% stake)
energy, mining & Utilities
25.0% 1,194
07-Jul-11 Atco group WA gas networks pty Ltd energy, mining & Utilities
Diversified Utility and energy trust; and Westnet Infrastructure group Limited
- 1,078
13-Jul-11 toyota motor corporation
toyota Auto Body co Ltd (43.23% stake)
Industrials & chemicals
0.1 3.6 30.3 14.4% 961
18-Jul-11 Santos Ltd eastern Star gas Ltd (79.10% stake)
energy, mining & Utilities
(loss) (loss) 51.3% 672
Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being Asia-pacific Data correct as of 04-Aug-11
Source: mergermarket
18
ASIA-PAcIfIc
Monthly M&A Insider
trenD grApHS
ASIA-pACIfIC M&A qUARTeRly TRenD
0
20
40
60
80
100
120
140
160
Q311*
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Valu
e (U
S$bn
)
Total value Mid-market value
Num
ber of deals
0
100
200
300
400
500
600
700
800
900
Total volume Mid-market volume
0
5
10
15
20
25
Q311*
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Valu
e (U
S$bn
)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
10
20
30
40
50
60
70
80
90
100
ASIA-pACIfIC M&A AnnUAl TRenD ASIA pACIfIC M&A AnnUAl pRIvATe eqUITy TRenD
0
50
100
150
200
250
300
350
400
450
500
YTD 2011*201020092008200720062005
Total value Mid-market value
Num
ber of dealsValu
e (U
S$bn
)
0
500
1,000
1,500
2,000
2,500
3,000
Total volume Mid-market volume
0
10
20
30
40
50
60
70
YTD 2011*201020092008200720062005
Valu
e (U
S$bn
)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
50
100
150
200
250
300
350
ASIA-pACIfIC M&A qUARTeRly pRIvATe eqUITy TRenD
19
ASIA-PAcIfIc
Monthly M&A Insider
trenD grApHS
ASIA-pACIfIC M&A GeoGRAphIC BReAKDoWn yTD 2011
VALUe VoLUme
Australia
China
Hong Kong
India
Indonesia
Japan
Malaysia
Singapore
South Korea
Taiwan
Other
19.3%
3.8%
2.5%
11.6%
3.1%
9.3%
2.3%
10.5%
2.7%
8.0%
26.9%
Australia
China
Hong Kong
India
Indonesia
Japan
Malaysia
Singapore
South Korea
Taiwan
Other
16.9%
4.3%2.7%9.8%
4.2%
14.5%
2.5%
11.1%
1.5%7.5%
25.0%
ASIA-pACIfIC M&A SeCToR BReAKDoWn yTD 2011
VALUe VoLUme
19.0%
15.5%
11.0%
3.6%16.4%
14.7%
3.6%
4.6%
2.8%3.6%0.7%
4.5% Industrials & Chemicals
TMT
Consumer
Business Services
Energy, Mining & Utilities
Financial Services
Pharma, Medical & Biotech
Construction
Transportation
Leisure
Real Estate
Agriculture
20.5%
15.1%
13.2%10.3%
9.8%
4.0%
4.1%
6.1%
8.8%
3.9%2.7%
1.6%
Industrials & Chemicals
TMT
Consumer
Business Services
Energy, Mining & Utilities
Financial Services
Pharma, Medical & Biotech
Construction
Transportation
Leisure
Real Estate
Agriculture
20
ASIA-PAcIfIc
Monthly M&A Insider
ASIA-pACIfIC M&A DeAl SIze BReAKDoWn
VALUe VoLUme
0
10
20
30
40
50
60
70
80
90
100
YTD 2011*201020092008200720062005
<US$250m or undisclosed value
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
23.0%
18.8%
28.6%
9.4%
20.2%
19.2%
22.1%
27.0%
11.0%
20.6%
15.7%
17.1%
30.3%
12.6%
24.3%
29.5%
15.8%
22.2%
12.0%
20.5%
19.9%
16.5%
30.8%
11.2%
21.6% 20.9%
10.5%
28.0%
29.1%
11.7% 11.8%
16.5%
35.9%
13.0%
22.8%
Per
cent
age
75
80
85
90
95
100
YTD 2011*201020092008200720062005
1.0%
5.1%
4.6%
89.0%
1.1%
4.8%
4.8%
88.9%
0.9%
5.0%
5.4%
88.3%
0.9%
4.5%
5.8%
88.4%
0.9%
5.5%
5.3%
87.9% 88.5%
4.9%
4.7%
1.6% 0.8%
5.9%
5.7%
87.3%
0.3% 0.3% 0.2%0.4% 0.3%0.4% 0.4%
<US$250m or undisclosed value
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
Per
cent
age
trenD grApHS
21Monthly M&A Insider
europe
A mergermArket m&A report on
eUrope
europe is watching the spin-off trend over the Atlantic very closely. However, the question is whether this would be enough to entice european energy groups to start making a similar move. Analysts are weighing the pressure for a split of Bp, the Uk energy giant. In terms of corporate action, there has not been any value-giving to shareholders ever since the gulf of mexico oil spill disaster. A spin-off might be the answer. UBS, Jpmorgan Cazenove, and Bank of America merrill Lynch are reportedly supportive of such a transaction, whilst sceptics in the market are worried that investment banks will put their potential fee income above Bp shareholders’ value. With weak investment bank earnings, especially in europe at the moment, no one can blame them either.
the analysts raymond James Financial talk to the Street about how different Bp is from Conocophillips or marathon. they point at the proven reserves-to-refining capacity ratio metric: Bp’s ratio is at 5.7, compared to 3.4 for Conocophillips and, even smaller, at 1.4 for marathon oil. that means the two American energy groups are more diversified across their downstream and upstream businesses that a spin-off for them would unlock shareholders’ value. For Bp, that may not be the case.
In the current downturn, the higher input costs and generally lower consumer demands in europe, where Bp refining businesses are located, could hamper profitability. the crude oil price now hovers around the $100/barrel mark. moreover, wages are sticky in a downturn, despite the ‘artificial pay-cut’ economic policy now in place through quantitative easing across europe. the same policy also reduces purchasing power, hence the lower demands.
Judging by the above ratio, Bp is essentially an e&p group with a hint of refining business. therefore, it would be difficult for the refining part of the business to stand on its own feet after the demerger. Shareholders might be compensated by a very generous valuation on Bp’s e&p assets as a standalone company. generous, however, is not what the market is at the moment.
Allied Irish Banks Plc – bumpy ride to nationalisationAllied Irish Banks (AIB) has received another round of government bail-outs in July, which would see the Irish state assuming a 99.8% stake in the bank by injecting a further €5bn of fresh capital. the bank needed to shore up its tier 1 capital to 6%, the current minimum requirement for Irish banks as set out by the country’s central bank.
AIB shareholders have experienced a roller-coaster ride over the year, with the bank initially passing a european stress test in 2010 only to be bailed out months later, in December. Apparently, that was not enough, as this latest transaction suggests.
the latest AIB bail-out might also pressurise the country’s deeply unpopular but necessary austerity measures even further, with further cuts to make up for the capital injection. For now, however, the market seems to have the confidence in the Irish government’s ability to balance its books. the second half of July saw a rapid decline in the Irish 10-year bond yield. From the closing peak of 14.1% on 14 July, it closed at 10.9% by the end of the month. Dublin hopes that this trend will continue for a long time to come, and that AIB’s bumpy ride is now over.
BP UNDER PRESSURE TO SPLIT UP AFTER SIMILAR MOVE ACROSS THE ATLANTIC BY MARATHON OIL AND CONOCOPHILLIPS FoLLoWIng tHe SUCCeSSFUL CompLetIon oF mArAtHon oIL’S SpIn-oFF oF ItS DoWnStreAm BUSIneSS Into mArAtHon petroLeUm Corp In eArLy JULy, ConoCopHILLIpS HAS mADe tHe SImILAr move ALBeIt StILL In A very eArLy StAge. on 14 JULy tHe CompAny AnnoUnCeD tHAt It WAS WorkIng toWArDS tHe DeFInItIve termS to SpLIt ItS UpStreAm BUSIneSS From DoWnStreAm. tHe LIStIng oF tHe tWo SepArAte CompAnIeS IS expeCteD By mID 2012.
22
europe
Monthly M&A Insider
top DeALS & expeCteD DeALS
TOP 10 EUROPEAN ANNOUNCED DEALS OF THE MONTH (JUL-11) Announced Bidder company Target company Target dominated
sectorSeller company Exit multiples (x) Bid premia
1-day before
Deal value(€m)Revenue EBITDA P/E
01-Jul-11 national pensions reserve Fund
Allied Irish Banks plc (98.00% stake)
Financial Services n/a n/a -93.0% 5,000
19-Jul-11 Clayton, Dubilier & rice, LLC; AxA private equity; and Caisse de Depot et placement du Quebec
Spie SA Industrial & Chemicals
pAI partners 0.6 - 2,100
21-Jul-11 BC partners Limited Com Hem AB telecommunications the Carlyle group LLC; providence equity partners LLC; and AxA private equity
- 1,800
19-Jul-11 ontario teachers' pension plan Board
Copenhagen Airports A/S (30.80% stake); and the Brussels Airport Company nv (39.00% stake)
transportation macquarie Airports Limited
- 1,210
15-Jul-11 Zurich Financial Services Ltd
Zurich Santander Insurance America SL (51.00% stake)
Financial Services Banco Santander SA n/a n/a 9.9 - 1,180
26-Jul-11 Bridgepoint Capital Limited; and eurazeo SA
Foncia groupe SA (98.10% stake)
real estate BpCe 1.8 - 997
14-Jul-11 Consortium led by Commerzbank Ag
Amprion gmbh (74.90% stake)
energy, mining & Utilities
rWe Ag - 974
01-Jul-11 Antin Infrastructure partners SAS; and rreeF pan-european Infrastructure Fund Lp
Andasol I (90.00% stake); and Andasol II (90.00% stake)
energy, mining & Utilities
ACS Actividades de Construccion y Servicios SA
- 747
21-Jul-11 Blackstone group Lp Jack Wolfskin Ausruestung fuer Draussen gmbH & Co kgaA
Consumer Barclays private equity Ltd; and Quadriga Capital Services gmbH
- 700
05-Jul-11 om group Inc vacuumschmelze gmbH & Co kg
Industrial & Chemicals
one equity partners LLC
1.8 - 700
23
europe
Monthly M&A Insider
PIPELINE OF EUROPEAN ExPECTED DEALSSituation Target company Sector Potential bidder
companyFinancial adviser to bidder (B); target (T); seller (S)
Seller company Market cap/est.
value (€m)
Comments
expected deal
provimi Holding Bv
Industrials & Chemicals
Cargill, Incorporated; nutreco nv; and royal DSm nv
Jpmorgan (S) permira 1,600 provimi, the Dutch animal fodder producer owned by permira, has planned its second bidding round for 10 August, Beurs nL reported on its website. Dutch companies nutreco and koninklijke DSm announced they were considering a joint offer and, according to media reports, minnesota-located Cargill is also expected to make an offer. For 2010, provimi saw profits of €65.1m on turnover of €1.6bn.
expected deal
northern rock plc
Financial Services
virgin money Holdings (Uk) Limited; J.C. Flowers & Co. LLC
government of the United kingdom
1,100 virgin money and JC Flowers are preparing to battle each other for the acquisition of Uk-based nationalised lender northern rock, the Financial times reported. the report cited sources familiar with the matter who said both suitors launched initial formal bids. the sale is thought likely to bring the government around £1bn (€1.1bn).
expected deal
Ing Life Belgium nv
Financial Services
Delta Lloyd nv Jpmorgan (S) Ing non-Life Belgium nv; and Ing Life Belgium nv
916 Delta Lloyd, the Dutch insurer, is looking at Ing’s Belgian insurance activities, reported Het Financieele Dagblad quoting Delta Lloyd Chairman niek Hoek. For 2010, Ing Life Belgium and Ing non-Life Belgium reported an income from premium of €916m with profits of €4m
expected deal
tenp, and transitgas
energy, mining & Utilities
marguerite; terra Firma Capital partners Limited; Fluxys SA; global Infrastructure partners; and rreeF Infrastructure
rothschild (S) eni S.p.A. 750 eni, the listed Italian energy group has a preferred bidder for tenp and transitgas, the german and Swiss pipelines, Il Sole 24 ore reported. Bidders for the pipelines could include infrastructure fund marguerite, terra Firma, Belgian energy group Fluxys, global Infrastructure partners and rreeF Infrastructure. the combined value of the two companies is estimated at €750m.
note: expected deals based on confirmed announcements by companies involved Source: mergermarket
top DeALS & expeCteD DeALS
europe
Monthly M&A Insider 24
trenD grApHS
EUROPEAN M&A qUARTERLY TREND
0
100
200
300
400
500
Q311*
Q211
Q111
Q410
Q310
Q2 10
Q1 10
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Valu
e (€
bn)
Total value Mid-market value
Num
ber of deals
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Total volume Mid-market volume
0
10
20
30
40
50
60
70
80
90
100
Q311*
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Buyout value Exit value Buyout volume Exit volume
Valu
e (€
bn)
Num
ber of deals
0
50
100
150
200
250
300
350
400
450
EUROPEAN M&A ANNUAL TREND EUROPEAN M&A ANNUAL PRIVATE EqUITY TREND
0
200
400
600
800
1000
1200
YTD 2011*Y2010Y2009Y2008Y2007Y2006Y2005
Total value Mid-market value
Num
ber of deals
Valu
e (€
bn)
0
1000
2000
3000
4000
5000
6000
7000
Total volume Mid-market volume
0
50
100
150
200
250
300
YTD 2011*Y2010Y2009Y2008Y2007Y2006Y2005
Valu
e (€
bn)
Buyout value Exit value
Num
ber of deals
Buyout volume Exit volume
0
200
400
600
800
1000
1200
1400
1600
EUROPEAN M&A qUARTERLY PRIVATE EqUITY TREND
europe
Monthly M&A Insider 25
trenD grApHS
EUROPEAN M&A GEOGRAPHIC BREAkDOwN YTD 2011
vALUe voLUme
UK
CEE
Iberia
France
Nordic
Germany
Benelux
Italy
Others9.0%
6.1%
7.6%
15.2%
14.5%
11.4%
14.4%
11.7%
10.0%
11.7%
8.9%
9.4%
5.4%
19.9%
11.5%
12.4%
6.4%
14.3%
UK
CEE
Iberia
France
Nordic
Germany
Benelux
Italy
Others
EUROPEAN M&A SECTOR BREAkDOwN YTD 2011
vALUe voLUme
2.8%
19.8%
9.9%
0.1%
11.7%
1.4%
1.8%
2.3%
1.3%
0.2%
7.1%
3.9%
4.0%
19.0%
14.7%
Industrials & Chemicals
Consumer
Business Services
Techonolgy
Energy, Mining & Utilities
Financial Services
Pharma, Medical & Biotech
Construction
Leisure
Transportation
Media
Telecommunications
Agriculture
Real Estate
Defence
1.0%
22.7%
15.3%
0.2%
6.0%
4.5%
4.5%
3.7%
3.0%
1.1%1.4%
14.3%8.4%
7.1%
7.0%
Industrials & Chemicals
Consumer
Business Services
Techonolgy
Energy, Mining & Utilities
Financial Services
Pharma, Medical & Biotech
Construction
Leisure
Transportation
Media
Telecommunications
Agriculture
Real Estate
Defence
europe
Monthly M&A Insider 26
trenD grApHS
EUROPEAN M&A DEAL SIzE BREAkDOwN
vALUe voLUme
0
10
20
30
40
50
60
70
80
90
100
YTD 2011*Y2010Y2009Y2008Y2007Y2006Y2005
<€250m or undisclosed value
€251m-€500m
€501m-€2,000m
€2,001m-€5,000m
>€5,001m
15.1%
23.9%
10.1%
17.9%
33.0%
17.7%
23.2%
8.4%
15.7%
35.1%
16.4%
22.4%
8.3%
13.7%
39.2%
14.5%
19.9%
8.8%
16.6%
40.3%
20.3%
23.7%
9.0%
20.3% 16.9%
9.2%
29.9%
20.4%
26.7% 23.6% 21.2%
24.1%
27.1%
10.4%
16.0%
Per
cent
age
88
90
92
94
96
98
100
YTD 2011*Y2010Y2009Y2008Y2007Y2006Y2005
3.4%
0.7%
3.9%
91.6%
3.8%
0.9%
3.5%
91.4%
4.0%
0.9%
3.9%
90.8%
2.7%
0.6%
3.2%
93.1%
2.1%
0.6%
2.2%
94.9%
93.0%
2.8%
3.3%
0.7% 0.8%
3.5%
3.2%
92.2%
0.5% 0.5% 0.3%0.4% 0.4% 0.2% 0.2%
<€250m or undisclosed value
€251m-€500m
€501m-€2,000m
€2,001m-€5,000m
>€5,001m
Per
cent
age
27
Mid
dle east &
africa
A mergermArket m&A report on
Monthly M&A Insider
energy, mining & Utilities continUed to be the most Active sector by vAlUe in the me&A region with 22 deAls worth Us$1.4bn. in JUly, the top deAl of the month wAs from mining sector JinchUAn groUp internAtionAl resoUrces, the hong kong bAsed mining groUp, which hAs mAde A coUnter offer to AcqUire the pUblicly listed soUth AfricAn metorex limited in A Us$1.3bn cAsh trAnsAction. the offer wAs A competing bid AgAinst brAziliAn vAle s.A.’s offer, which lAUnched An eqUity bid in eArly April to AcqUire metorex At Us$1.2bn. vAle’s offer lApsed dUe to metorex’s decision to Accept JinchUAn groUp’s offer thAt provided A 10% premiUm over metorex’ closing shAre price, As of 4 JUly 2011. Under the terms of the vAle’s offer, metroex woUld pAy A Us$ 11.2m breAk-Up fee to the compAny.
the middle eAst & AfricA
the other top three deals occurred in the consumer sector: electrolux’s acquisition of egyptian home appliances manufacturer, olympic group financial investments, in a Us$565m cash transaction; Japan tobacco’s acquisition of sudan’s largest tobacco provider, haggar cigarette & tobacco factory ltd for Usd$450m, and turkish electrical and home appliances group, Arcelik A.s.’s takeover of south African defy Appliances limited in a Us$323.7m transaction.
looking at the expected deals side, Afrox, the listed south African industrial gas group, might be considering disposal of its lpg business, according to finweek. Afrox has a market capital of approximately Usd$961m.
sonangol, the Angolan state oil company which owns and operates around 500 service stations in the country, is also looking to be privatised. it is expected that the Angolan firms will be more interested in the privatisation than overseas buyers. sanagol has a turnover of Us$21.9bn in 2010.
kuwaiti government’s privatisation of a 35% stake in kuwait Airways is well on the way. the government received three purchase offers that included an offer from qatar Airways, which was considered to be the best bid. According to the close sources, kuwait projects company is amongst the potential buyers, and the stake in kuwait Airways is estimated to be worth around Us$807m. the government is advised by dewey & leboeuf and local firm Abdulhameed Al sarraf & partners on the privatisation. the deadline for submission of expressions of interest for the stake is 25 August 2011; international operators and kuwait listed firms are eligible for the bids, while domestic airlines are excluded from the process.
salesforce, the Us based cloud computing firm, is in negotiations to acquire the israeli based navajo systems that specialised in saas application data security in a transaction worth tens of millions of dollars.
clal insurance enterprise holdings announced that it received a letter of intent from an undisclosed party for its insurance arm, guard financial group. the unidentified party valued the subsidiary at Us$268m. According to the news sources, there have been negotiations between idb holding corp and private equity firm, permira, for sale of clal. the company is also considering the sale of broadgate Underwriting businesses that operate as part of lloyd council.
28
Mid
dle east &
africa
Monthly M&A Insider
top deAls
Top 10 MIddle eAsTern & AfrIcAn Announced deAls of The MonTh (Jul-11) Announced Bidder company Target company Target dominated
sectorseller company exit multiples (x) Bid premia
1-day before
deal value(us$m)revenue eBITdA p/e
05-Jul-11 Jinchuan group international resources co ltd
metorex limited energy, mining & Utilities
3.2 10.0% 1,393
11-Jul-11 electrolux Ab olympic group financial investments
consumer 1.1 18.4 12.8% 565
28-Jul-11 Japan tobacco inc haggar cigarette & tobaco factory ltd
consumer haggar holding company ltd
9.9 450
21-Jul-11 Arcelik Anonim sirketi defy Appliances limited consumer franke Artemis management Ag
0.9 7.2 324
07-Jul-11 newport corporation ophir optronics ltd industrial & chemicals
2.1 12.9 29.1 92.2% 226
13-Jul-11 soprol sAs lesieur cristal sA (41.00% stake)
consumer 0.9 10.1 19.9 -0.5% 163
25-Jul-11 cinmark twenty seven (pty) limited
boschendal limited consumer Jci limited; and ifA hotels and resorts
103
25-Jul-11 rafael Advanced defense systems ltd; and Aeronautics defense systems ltd
controp precision technologies ltd (82.00% stake)
industrial & chemicals
shlomo nir (private investor)
1.8 88
13-Jul-11 delta holding sA societe de sel de mohammedia
energy, mining & Utilities
government of morocco
5.7 83
14-Jul-11 Africa israel industries ltd yacoby steel corp ltd industrial & chemicals
26
based on announced deals, including lapsed and withdrawn bids based on dominant geography of target being middle east or Africa data correct as of 05-Aug-11
source: mergermarket
29
Mid
dle east &
africa
Monthly M&A Insider
trend grAphs
MIddle eAsTern & AfrIcAn M&A quArTerly Trend
0
20,000
40,000
60,000
80,000
100,000
120,000
Q311*
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Valu
e (U
S$m
)
Total value Mid-market value
Num
ber of deals
0
20
40
60
80
100
120
140
160
Total volume Mid-market volume
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Q311*
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Buyout value Exit value Buyout volume Exit volume
Num
ber of dealsValu
e (U
S$m
)
0
5
10
15
20
25
MIddle eAsTern & AfrIcAn M&A AnnuAl Trend
MIddle eAsTern & AfrIcAn M&A AnnuAl prIvATe equITy Trend
0
20
40
60
80
100
120
140
160
YTD 2011*201020092008200720062005
Total value Mid-market value
Valu
e (U
S$bn
)
Num
ber of deals
0
50
100
150
200
250
300
350
400
450
500
Total volume Mid-market volume
0
2
4
6
8
10
12
14
YTD 2011*201020092008200720062005
Buyout value Exit value Buyout volume Exit volume
Valu
e (U
S$bn
)
0
10
20
30
40
50
60
70
Num
ber of deals
MIddle eAsTern & AfrIcAn M&A quArTerly prIvATe equITy Trend
30
Mid
dle east &
africa
Monthly M&A Insider
trend grAphs
MIddle eAsTern & AfrIcAn M&A GeoGrAphIc BreAKdoWn yTd 2011
MIddle eAsTern & AfrIcAn M&A secTor BreAKdoWn yTd 2011
vAlUe
vAlUe
volUme
volUme
15.7%
0.4%0.1% 0.1%
0.3%
20.1%
15.6%
5.0%
5.1%
5.1%
0.8%2.0%
29.8%
Industrials & Chemicals
Consumer
Energy, Mining & Utilites
TMT
Financial Services
Pharma, Medical & Biotech
Business Services
Construction
Real Estate
Transportation
Leisure
Defence
Agriculture
1.0%
21.9%
3.3%2.4%
0.5%1.8%
0.3%0.3%
0.1%
0.5%
9.9%
11.7%
4.8%4.2%
4.3%
2.2%
3.9%
9.5%
9.1%
4.9%
2.3%
1.2%
South Africa
Israel
United Arab Emirates
Saudi Arabia
Egypt
Nigeria
Morocco
Kuwait
Kenya
Qatar
Jordan
Tunisia
Ghana
Iraq
Zimbabwe
Algeria
Libya
Namibia
Ethiopia
Mozambique
Swaziland
Oman
3.7%3.1%
1.9% 1.2%0.6%
3.7%
13.6%
16.0%
17.3%
8.6%
9.3%
9.3%
11.7%
Industrials & Chemicals
Consumer
Energy, Mining & Utilites
TMT
Financial Services
Pharma, Medical & Biotech
Business Services
Construction
Real Estate
Transportation
Leisure
Defence
Agriculture
38.4%
5.4%
5.2%
2.8%
2.7%
21.2%
8.0%
3.8%
1.0%
3.1%0.4% 3.3%
0.5%
2.8% 0.2%0.1%
0.3%0.5%
South Africa
Israel
United Arab Emirates
Saudi Arabia
Egypt
Nigeria
Morocco
Kuwait
Kenya
Qatar
Jordan
Tunisia
Ghana
Iraq
Zimbabwe
Algeria
Libya
Ethiopia
31
Mid
dle east &
africa
Monthly M&A Insider
trend grAphs
MIddle eAsTern & AfrIcAn M&A deAl sIZe BreAKdoWn
vAlUe volUme
0
10
20
30
40
50
60
70
80
90
100
YTD 2011*201020092008200720062005
12.1%
21.5%
54.8%
5.1%5.0%
86.4%
13.3%
11.3%
67.2%
17.5%
19.0%
47.7%
19.2%
13.2%
53.2%
67.0%
11.6%
11.0%
15.0%
10.3%3.1%
7.3%14.1% 12.9% 9.3%
11.4%
7.9%
64.7%
1.3% 0.4% 0.9% 1.7% 1.6% 1.1% 1.1%
<US$14.9m or undisclosed value
US$15m-US$100m
US$101m-US$250m
US$251m-US$500m
>US$501m
Per
cent
age
0
10
20
30
40
50
60
70
80
90
100
YTD 2011*201020092008200720062005
34.8%
10.7%
8.6%
5.6%
34.0%
14.2%
6.2%
9.2%
32.6%
15.4%
5.7%
7.2%
36.8%
11.2%
5.7%3.8%
32.4%
13.2%
4.1%3.4% 5.8%
5.1%
33.4%
11.3%
10.4%
6.1%
40.3%36.4%
39.1%42.5% 47.0% 44.4% 45.1%
28.7%
9.8%
<US$14.9m or undisclosed value
US$15m-US$100m
US$101m-US$250m
US$251m-US$500m
>US$501m
Per
cent
age
Monthly M&A Insider 32
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33Monthly M&A Insider
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Merrill datasite – built with the client in mindmerrill datasite was created to meet its clients’ needs and built to their specifications. since 2002 we have consistently leveraged the experiences of our clients to add leading-edge functionality to the available toolset. merrill datasite allows its users and administrators to:
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execuTIve MAnAGeMenT
ed Bifulk president tel: +1 212 229 6563
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execuTIve sAles
chris Beckmann regional director, europe tel: +49 69 25617 110
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Matthew Mezzancello regional director, new york tel: +1 917 934 7346
steve piccone vice president, new york tel: +1 212 229 6883
William polese regional director, new york tel: +1 212 229 6612
paul Kleinkauf regional director, southeast tel: +1 404 602 3251
scott haugen regional director, minnesota tel: +1 651 632 4375
Anthony crosby regional director, chicago tel: +1 312 674 6511
Mark plaehn regional director, chicago tel: +1 312 674 6527
Kelly Weisenfels regional director, chicago tel: +1 312 674 6508
Brian Gilbreath regional director, omaha tel: +1 404 934 8085
nicholas renter regional director, dallas tel: +1 214 754 2100
Mark Tully regional director, san francisco tel: +1 415 357 1400
Andrew Buonincontro regional director, palo Alto tel: +1 650 493 1400
erik sandie regional director, palo Alto tel: +1 650 493 1400
dan phelan regional director, los Angeles tel: +1 213 253 2139
Jay loyola regional director, irvine tel: +1 949 622 0663
david yeary vice president, datasite life sciences tel: +1 415 307 4414
James snaza director, life sciences tel: +1 651 632 4585
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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.
• ytd 2011 refers to the period 01-Jan-11 to 31-Jul-11. q3 2011 refers to the period 01-Jul-11 to 31-Jul 11.
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