A mergermArket report on globAl m&A Activity Monthly M&A … · 2010. 2. 18. · Q2 09 Q1 09 Q4 08...

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

FebruAry 2010

Monthly M&A InsIdermergermarket

GlobAl overvIew 01

AsiA-pAciFic 05

AmericAs: lAtin AmericA 14

north AmericA 20

europe 28

middle eAst & AFricA 36

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CONTENTS

01

Monthly M&A Insider

glObal OvErviEw

Furthermore, global deal volume fell to the lowest level seen since 2003 while the average deal size of US$185m is way down on the US$233m witnessed during the height of the M&a boom in 2007.

Despite this, there are a number of encouraging signs that the M&a market has reached inflection point with dealmaking conditions and market confidence slowly improving. indeed, this can be seen to good effect by looking at the quarterly breakdown of 2009 deal flow with announced activity increasing each quarter, trending upwards from 2,093 transactions in Q1 to 2,686 deals in Q4. The second half of 2009 also accounted for 58% of the year’s US$1bn+ transactions as the financing environment, and the general economic climate began to improve. This figure increases further when government-related bailouts of ailing corporations/institutions are excluded from the analysis.

remarkably, the largest transaction of 2009 was actually a strategic play that came to the market at the height of the financial crisis in the first quarter of the year. The deal was announced in the traditionally counter-cyclical Pharma, Medical & biotech space and saw US-based Pfizer acquire wyeth for a total consideration of US$63.27bn. Nevertheless, the climate for large-cap dealmaking undoubtedly improved as the year progressed, borne out by the fact that five of the top 10 deals of the year were announced in either November or December. This trend has continued into 2010 with several significant deals being announced in the first few weeks of the year, chief among them being Novartis’ US$26.30bn acquisition of 52% stake acquisition in alcon, the Switzerland-based developer, manufacturer, and distributer of eye care products. Proof again that even in difficult times corporates with strong balance sheets and well defined strategies are able to do big deals.

Elsewhere, private equity players have continued to be largely absent from the top end of the market with buyout activity generally retrenching to the mid and low-cap space. Understandably, large leveraged buyouts - along the lines of the mega deals that dominated the private equity driven M&a landscape in the years running up to the financial crisis - have been largely put on hold since the acute onset of the financial crisis. while private equity equity-related deal volumes are beginning to slowly recover as funds adjust to the new economic reality, valuations remain depressed – the average buyout size in 2009 was just US$90m, compared to US$109m in 2008 and US$301m in 2007. Tellingly, at the time of publication just 36 US$1bn+ private equity-related deals have been announced since 2009, compared to 76 in 2008 and 217 in 2007.

going forward, it is likely that private equity will continue to adopt a ‘back-to-basics’ approach with renewed focus on value creation at portfolio company level. The M&a environment is certainly improving although things are now fundamentally different for the asset class; attractive targets are less commonplace and leverage is more difficult to obtain with loans widely syndicated as lenders look to diversify risk. as such, financial investors have generally shied away from emerging market plays and predominantly focussed on acquisitions in the tried and tested markets of Europe and North america. However, despite this fundamental shift in the modus operandi of the asset class, deals such as KKr’s recent acquisition of Pets at Home for a consideration of almost US$1.54bn and bC Partners’ move to buy Spotless for US$816m show that big deals could be making a comeback.

by tom Coughlan, remark

givEN THE SCalE aND SCOPE OF THE wOrST ECONOMiC DOwNTUrN iN DECaDES, iT iS OF liTTlE SUrPriSE THaT THE glObal M&a MarKET SUFFErED baDly iN 2009. a TOTal OF 9,493 DEalS wOrTH US$1.76TN CaME TO THE MarKET OvEr THE COUrSE OF THE yEar, rEPrESENTiNg a DECliNE OF MOrE THaN 25% iN TErMS OF bOTH DEal vOlUME aND valUE COMParED TO 2008 NUMbErS.

head of research – Elias latsis

editor – anna Henderson

For advertising opportunities contact:

erik wickman

tel: + (1) 212 6863329

[email protected]

Global – Tom CoughlanAsia-Pacific – Debbie Jung, Shunsuke Okano, Chunshek Channorth America – aksana Fitzpatrick, irina arefyeva and Jason Cozzalatin America – Matthew alberteurope – giovanni gallorini, Samuel TedjasukmanaMiddle east & Africa – Petra witowski, Nulifer Sezer

02

Monthly M&A Insider

Trend graphs

GLOBAL M&A quArterLy trend

value volume

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GLOBAL M&A quArterLy MId-MArket trend

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03

Monthly M&A Insider

TrEND graPHS

GlobAl M&A seCtor breAkdown y/e 2009

valUE vOlUME

8.5%

3.7%

17.0%

9.6%3.8%

12.6%

0.5%

2.3%

0.2%2.8%

12.9%

24.9%

1.1%

Industrials & Chemicals

TMT

Consumer

Energy, Mining & Utilities

Business Services

Financial Services

Pharma, Medical & Biotech

Construction

Leisure

Transportation

Real Estate

Agriculture

Defence


TMT

Consumer


Business Services

Financial Services


Construction

Leisure

Transportation

Real Estate

Agriculture

Defence

13.3%

14.3%

17.9%

3.8%

3.6%

2.5%

2.9%

0.3%1.1%

11.2%

11.1%

11.4%

6.5%

GlobAl M&A quArterly PrIvAte equIty trend

valUE vOlUME

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04

Monthly M&A Insider

TrEND graPHS

GlobAl M&A deAl sIze breAkdown

valUE vOlUME

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H22009

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Value not disclosed

Num

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05

ASIA-PAcIfIc

A mergermArket m&A report on

Monthly M&A Insider

ASIA-pAcIfIc

Energy, Mining and Utilities

As in previous years, much of the deal value in the region stems from deals in the energy, mining and Utilities sector.out of the ten largest deals announced in 2009, five of them were in that space, including the $58bn West Australian joint venture of rio tinto and BHp Billiton and the $15.8bn acquisition of hydroelectricity assets from china three gorges project by china Yangtze power.

the sharp drop in commodity prices in early 2009 also provided a brief window for chinese buyers to snap up energy and resource companies overseas. Australia, canada and kazakhstan were popular destinations. However, escalating concerns for national interest in Australia’s mineral assets had caused several Sino-Australian deals to lapse.

Financial Services

the global financial crisis catalyzed deals in the financial Services sector and saw many overseas financial services companies sell off their Asian assets. citigroup and Bank of America both offloaded more than $7bn worth of their Asian bank stakes; while US insurer AIg and european banks Ing and rBS each disposed of some $3bn in their Asian operations.

m&A oUtlook for 2010

Greater China: Driven by the recovery of the global economy and government policies, chinese m&A is expected to continue with its current momentum well into 2010. Deal flow is expected to be especially strong in sectors such as Automotive, energy and mining, and Steel. there will be further consolidation among regional medium and small automakers and the ongoing Volvo / geely and Hummer brand / Sichuan tengzhong Heavy Industrial machinery deals are both expected to complete this year. further developments in the capital market along with the establishment of rm B funds will further accelerate the consolidation in different industries and drive m&A activity.

Japan: following the government change in 2009, the new ruling Democratic party of Japan is expected to implement several regulatory changes which will potentially limit parent companies’ holdings in their listed subsidiaries. Some large companies in Japan have been criticized for acting against minority shareholders’ interest in their listed subsidiaries. Some major companies such as Hitachi, nec and canon have already acted in response and others such as nippon telegraph and telephone and Softbank will likely follow suit. If the policy change is implemented, many companies are expected to either take full control of their listed subsidiaries or be forced to divest their holdings.

Australia: Setting aside the $58bn joint venture between rio tinto and BHp Billiton, Australian deal value and volumes in 2009 decreased to levels not seen since 2004. However, the global economic recovery could act as a catalyst for Australian dealmaking in 2010. cash-rich Australian firms are likely to take advantage of the strong Australian Dollar to make acquisitions overseas, while foreign investors in Australian companies may find 2010 to be among the best years to reap profits from their holdings. there is also no lack of speculation of deals in the financial space and overseas players will continue to be interested in Australia’s mining assets.

South Korea: Deal flow in South korea is expected to see a revival, as many deals that were cancelled or put on hold due to the economic slump will be brought up once again. the US pe firm lone Star is said to be mulling a sale of its 51% stake in korea exchange Bank, while the korean government plans to offload 16% stake in Woori finance. kookmin Bank and korea Development Bank, both interested in expanding their foothold, are likely bidders for these stakes. other large enterprises such as Daewoo International and Hynix Semiconductor have are already been put up for sale.

India: the market expects a return in Indian m&A activity, with an emphasis on outbound deals led by such large firms as reliance Industries, ongc, Bharti Airtel and Sterlite.

DeSpIte tHe generAl DecreASe In gloBAl m&A ActIVItY, ASIA-pAcIfIc mAnAgeD to fInISH 2009 WItH A SlIgHt IncreASe In oVerAll DeAl VAlUe. WItH A totAl of 2,218 AnnoUnceD DeAlS WortH $419.6Bn, m&A VAlUe In tHe regIon roSe BY 6% from 2008 leVelS. AnD WHIle regIonAl DeAl VolUme fell BY 4% from 2008 leVelS, tHIS reSUlt IS StIll mUcH Better compAreD WItH tHe 26% DeclIne WItneSSeD In gloBAl DeAl VolUme.

06

ASIA PAcIfIc

Monthly M&A Insider

particular focus will be on the tmt and energy, mining and Utilities sectors. reliance, essar and ntpc are for example all mulling acquisitions in energy and mineral assets overseas. the lapsed tie-up between Bharti Airtel and South African telecom giant mtn in 2009 nonetheless highlights the need for further consolidation among telecom players. gtl Infrastructure is spending $1.84bn in Aircel’s telecom tower business in India; while Bharti Airtel is once again looking for outbound opportunities, after agreeing to the acquisition of 70% stake in Warid telecom in Bangladesh for $300m, and entering into exclusive negotiation with Zain group to acquire its African assets for $10.7bn.

South East Asia: on the back of a new mining law in Indonesia, enacted in 2009, foreign companies owning Indonesian mining operations will have to comply with foreign ownership limits on certain investments. newmont mining and eramet had both sold off parts of their Indonesian assets in 2009, while freeport mcmoran and BHp Billiton will follow suit in 2010. more deals in the space could follow. thailand is also expected to see a return in m&A activity after a multi-year slump, as the political situation gradually stabilizes and investor confidence picks up. the lack of energy resources in thailand will push such local players such as ptt and Banpu group into looking out for acquisition targets overseas.

ASIA-pAcIfIc

07

ASIA PAcIfIc

Monthly M&A Insider

Top 10 AsIA-pACIFIC AnnounCed deAls For Y/e 31 deCeMber 2009Announced status Target company sector bidder company seller company exit multiples (x) bid premia

1-day beforedeal value($m)

revenue ebITdA p/e

5-Dec-09 p BHp Billiton (Western Australian iron ore assets); and rio tinto plc (Western Australian iron ore assets)

energy, mining & Utilities

rio tinto/BHp Billiton (Joint Venture)

BHp Billiton plc; and rio tinto plc

- 58,000

16-may-09 c china three gorges project corporation (hydroelectricity generation assets and stakes in peripheral service companies)


china Yangtze power co ltd

china three gorges project corporation

8.8 21.1 - 15,725

30-oct-09 p nippon mining Holdings Inc


nippon oil corporation

0.3 (loss) (loss) 2.0% 12,186

12-feb-09 l rio tinto (stakes in nine mining assets)


Aluminum corporation of china

rio tinto plc - 11,838

14-nov-09 p chi mei optoelectronics corporation

Industrials & chemicals

Innolux Display corp 1.0 4.9 (loss) 20.7% 9,948

1-may-09 c nikko citigroup (business acquired by Sumitomo mitsui financial group); and nikko cordial Securities Inc

financial Services

Sumitomo mitsui financial group Inc

citigroup Inc n/a n/a - 7,822

4-mar-09 c SDIc electric power co ltd


SDIc Huajing power Holdings co ltd

State Development & Investment corporation

11.4 14.0 6.8 - 7,367

13-may-09 c china construction Bank corporation (5.78% stake)

financial Services

Bank of china ltd; china life Insurance (group) company; Hopu Investment management co ltd; and temasek Holdings pte ltd

Bank of America corporation

n/a n/a 9.2 -15.3% 7,319

14-Sep-09 c eircom Holdings limited tmt Singapore technologies telemedia pte ltd

1.9 (loss) (loss) 6.4% 5,768

12-nov-09 p Shuhuang railway Development co ltd (41.16% stake); taiYuan railway Administration (railway assets); and taiyuan railway Juli Zhuangxie co ltd (90.2% stake)

transport Daqin railway co ltd taiYuan railway Administration

3.1 57.3 (loss) - 4,790

c = completed; p = pending; l = lapsed Source: mergermarket

top DeAlS & expecteD DeAlS

08

ASIA PAcIfIc

Monthly M&A Insider

Top 5 AsIA-pACIFIC AnnounCed deAls oF The MonTh (jAnuArY 2010)Announced status Target company sector bidder company seller company exit multiples (x) bid premia


revenue ebITdA p/e

24-Jan-10 p Jupiter telecommunications co ltd (37.8% stake)

tmt kDDI corporation liberty global Inc

3.6 8.4 32.6 64.5% 4,014

6-Jan-10 p San miguel corporation

consumer roberto V. ongpin; Inigo Zobel; Jose campos; and master Year limited

12.0% 2,407

18-Jan-10 p orient overseas Developments limited

real estate capitaland limited orient overseas (International) limited

n/a n/a 102.6 - 2,200

14-Jan-10 p Aircel limited (telecom tower business)

tmt gtl Infrastructure limited

Aircel limited - 1,840

21-Jan-10 l eon capital Berhad financial Services

Hong leong Bank Berhad

0.5% 1,465

c = completed; p = pending; l = lapsed Source: mergermarket

top DeAlS & expecteD DeAlS

pIpelIne oF AsIA-pACIFIC expeCTed deAlssituation Target company sector potential bidder

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

seller company

Market cap/ est. value

($m)

Comments

expected deal Axa Asia pacific financial Services

AxA; Amp limited; and national Australian Bank

Deutsche Bank (t); macquarie group (t); UBS Investment Bank (B - AxA & Amp); Jpmorgan (B - nAB)

10,000 Amp and AxA originally submitted a joint offer for AxA Asia pacific Holdings. the offer would be equivalent to AxA selling its 54% stake in AxA ApH's Australia & new Zealand business while acquiring the 46% of AxA ApH's Asian operations that AxA does not own for a net cash payment of eUr 1.1bn. AxA also entered into an exclusivity agreement for the purpose of the offer, but this subsequently expired, with nAB entering the situation with its own proposal to AxA ApH.

expected deal chuo mitsui trust Holdings Inc

financial Services

Sumitomo trust & Banking

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

expected deal Denway motors limited

Industrials & chemicals

guangzhou Automobile group

china International capital corporation (B); gf Securities (B)

4,469 guangzhou Automobile group submitted an application to list china lounge, and as part of the process, intends to privatize Denway motors gAc under a scheme of arrangement, in which it plans to exchange its new H shares for those held by current Denway shareholders.

09

ASIA PAcIfIc

Monthly M&A Insider

leAgUe tABleS

VAlUeY/e

31-dec-2009house Value

($m)deal count

1 morgan Stanley 97,054 56

2 credit Suisse 84,597 43

3 goldman Sachs 84,169 47

4 macquarie group 74,923 49

5 gresham Advisory partners 61,987 23

6 lazard 61,680 12

7 UBS Investment Bank 36,614 49

8 Bank of America merrill lynch 31,961 30

9 cItIc Securities 23,044 13

10 Jpmorgan 22,976 26

11 citigroup 21,477 30

12 china International capital 21,212 19

13 Deutsche Bank 20,689 37

14 nomura Holdings 15,658 25

15 Deloitte 15,517 53Source: mergermarket

VolUme

the financial adviser league tables by value and volume have been run from 01 January 2009 to 31 December 2009 and exclude lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being Asia-pacifc excluding Japan.

Y/e 31-dec-2009

house Value ($m)

deal count

1 ernst & Young 10,531 63


3 Deloitte 15,517 53

4 kpmg 5,060 50




8 credit Suisse 84,597 43

9 pricewaterhousecoopers 4,893 43


11 cImB group 3,679 31

12 Bank of America merrill lynch 31,961 30

13 citigroup 21,477 30

14 Jpmorgan 22,976 26

15 nomura Holdings 15,658 25Source: mergermarket

Top 15 FInAnCIAl AdVIsers – AsIA-pACIFIC exCl jApAn

Top 15 legAl AdVIsers – AsIA-pACIFIC exCl jApAn

VAlUeY/e


($m)deal count

1 linklaters 96,743 46

2 freshfields Bruckhaus Deringer 86,900 46

3 Allens Arthur robinson 81,083 21

4 freehills 76,415 56

5 Blake Dawson 70,964 45

6 Slaughter and may 62,220 13

7 commerce and finance law offices 31,636 17

8 Baker & mckenzie 29,824 69

9 mallesons Stephen Jaques 27,078 44

10 clifford chance 19,559 31

11 DeHeng law offices 19,553 9

12 tian Yuan law firm 17,503 8

13 Shearman & Sterling 16,562 17

14 Simpson thacher & Bartlett 15,734 11

15 king & Wood 15,113 17Source: mergermarket

VolUme

the legal adviser league tables by value and volume have been run from 01 January 2009 to 31 December 2009 and include lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being Asia-pacifc excluding Japan.

Y/e 31-dec-2009

house Value ($m)

deal count


2 freehills 76,415 56

3 kim & chang 11,929 47

4 linklaters 96,743 46

5 freshfields Bruckhaus Deringer 86,900 46


7 mallesons Stephen Jaques 27,078 44

8 clayton Utz 8,552 42

9 minter ellison 3,973 39

10 DlA piper 8,386 38

11 lee & ko 7,083 35

12 clifford chance 19,559 31

13 Allen & gledhill 11,372 29

14 Skadden Arps Slate meagher & flom 12,602 26

15 Wongpartnership 9,195 25Source: mergermarket

10

ASIA PAcIfIc

Monthly M&A Insider

leAgUe tABleS

VAlUe

Y/e 31-dec-2009

house Value ($m)

deal count

1 Hopu Investment management 10,489 3

2 temasek Holdings 7,851 3

3 kohlberg kravis roberts & co 2,122 3

4 Affinity equity partners 2,072 3

5 mBk partners 1,840 3

6 Bain capital 1,172 3

7 the carlyle group 656 6

8= Imm private equity 625 1

8= mirae Asset private equity fund 625 1

10 tpg capital 527 2Source: mergermarket

VolUme

the private equity buyout activity tables by value and volume are based on private equity firms advising the bidder on buyout deals where the dominant geography of the target company is Asia-pacific. the tables by value and volume have been run from 01 January 2009 to 31 December 2009 and exclude lapsed and withdrawn deals

Y/e 31-dec-2009

house Value ($m)

deal count

1 the carlyle group 656 6

2 Intel capital 62 5

3 Sequoia capital 356 4

4 matrix partners 50 4

5 Hopu Investment management 10,489 3

6 temasek Holdings 7,851 3

7 kohlberg kravis roberts & co 2,122 3

8 Affinity equity partners 2,072 3

9 mBk partners 1,840 3

10 Bain capital 1,172 3Source: mergermarket

ACTIVITY TAble oF prIVATe equITY FIrMs on AsIA-pACIFIC buYouTs

VAlUe

Y/e 31-dec-2009

house Value ($m)

deal count

1= newbridge capital group 2,278 1

1= tpg capital 2,278 1

3 citigroup capital partners Japan 2,227 2

4 the carlyle group 1,789 2

5 oak Investment partners 1,159 2

6= cDH Investments management 848 1

6= new Horizon capital 848 1

8 IDg technology Venture Investment 572 2

9 Ashmore group 571 2

10 Accel partners & co 510 1Source: mergermarket

VolUme

the private equity exit activity tables by value and volume are based on private equity firms advising the vendor on exit deals where the dominant geography of the target company is Asia-pacific. the tables by value and volume have been run from 01 January 2009 to 31 December 2009 and exclude lapsed and withdrawn deals

Y/e 31-dec-2009

house Value ($m)

deal count

1 citigroup capital partners Japan 2,227 2

2 the carlyle group 1,789 2

3 oak Investment partners 1,159 2

4 IDg technology Venture Investment 572 2

5 Ashmore group 571 2

6 telecom Investments (mauritius) 464 2

7 Advantage partners 386 2

8= mkS partners 275 2

8= Unison capital 275 2

10 cSV capital partners 96 2Source: mergermarket

ACTIVITY TAble oF prIVATe equITY FIrMs on AsIA-pACIFIC exITs

11

ASIA PAcIfIc

Monthly M&A Insider

trenD grApHS

AsIA-pACIFIC M&A quArTerlY Trend

VAlUe VolUme

0

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Q409

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AsIA-pACIFIC M&A quArTerlY MId-MArkeT Trend

VAlUe VolUme

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e ($

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Num

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moving average trend line

12

ASIA PAcIfIc

Monthly M&A Insider

trenD grApHS

AsIA-pACIFIC M&A seCTor breAkdown Y/e 2009

VAlUe VolUme

11.4%

36.4%

8.2%

2.2%

16.5%

11.4%

4.2%

4.2%

2.1%

1.7%

0.9% 0.01%0.7%



Consumer

TMT

Financial Services

Business Services

Real Estate


Transport

Construction

Leisure

Agriculture

Defence

19.6%

13.4%

13.2%

9.7%

9.9%

1.5%

12.8%

5.1%

4.4%

4.0%3.5%

2.9%



Consumer

TMT

Financial Services

Business Services

Real Estate


Transport

Construction

Leisure

Agriculture

AsIA-pACIFIC M&A quArTerlY prIVATe equITY Trend

VAlUe VolUme

0

5,000

10,000

15,000

20,000

25,000

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e ($

m)

Asia-Pacificbuyouts

Asia-Pacificexits

0

20

40

60

80

100

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

Asia-Pacificbuyouts

Asia-Pacificexits

13

ASIA PAcIfIc

Monthly M&A Insider

trenD grApHS

AsIA-pACIFIC M&A geogrAphIC breAkdown Y/e 2009

VAlUe VolUme

China

Japan

Australia

South Korea

India

Hong Kong

Singapore

Malaysia

Indonesia

Taiwan

New Zealand

Other

27.3%

4.4%

23.8%

6.3%

18.0%

3.8%

2.9%

1.5%

0.8%

5.7%5.0%

0.3%

28.5%

9.2%

9.6%

12.9%

18.0%

5.4%

2.6%

2.3%

2.2%2.1% 5.5%

1.9%

China

Japan

Australia

South Korea

India

Hong Kong

Singapore

Malaysia

Taiwan

Indonesia

New Zealand

Other

AsIA-pACIFIC M&A deAl sIZe breAkdown

VAlUe VolUme

0

50

100

150

200

250

300

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> $5$01m

$251m-$500m

$101m-$250m

$15m-$100m

$5m-$14.9m

Valu

e ($

bn)

0

300

600

900

1,200

1,500

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> $5$01m

$251m-$500m

$101m-$250m

$15m-$100m

$5m-$14.9m

Value not disclosed

Num

ber

of d

eals

LATIN AM

ERICA

LATIN AMERICAA MERgERMARkET M&A REpoRT oN

14Monthly M&A Insider

The contraction in deal activity was more pronounced in early 2009, when greater market uncertainty prevailed. Indeed, by the final quarter of the year, Latin American transaction volumes posted the first instance of quarterly growth in the year, increasing by 7.4% to 87 transactions. Combined deal valuations, on the other hand, were down by over one-third to US$16.37bn in Q4 – albeit after climbing to US$25.88bn in the previous quarter, a high not seen since Q1 2008.

Casting a look at the M&A breakdown by sector, Latin America’s Consumer markets stood out as the leading space by volume and value. In total, there were 77 transactions worth a record US$19.66bn in the sector over last year, compared to 92 deals worth US$10.10bn in 2008. The boost in aggregate valuations came on the back of a spate of transactions in the large-cap segment of the deal market.

Nowhere was this more apparent than in Brazil, the region’s largest economy and deal market. In the year, transaction flows in the Brazilian Consumer M&A market increased to 43 deals valued at US$15.79bn, compared to 35 deals worth US$3.36bn in the year prior. Impressively, this increase in deal volume and value defied a broader M&A downturn seen across Latin America’s Consumer industry as well as the wider Brazilian M&A market. In terms of Consumer subsectors, the food processing niche was clearly a hot spot, accounting for two of the top five overall M&A transactions brokered last year in Latin America.

The region’s largest transaction saw JBS, the São paulo-headquartered global leader in beef production and other meat processing activities, acquire national rival Bertin in a deal worth US$6.82bn. The acquisitive JBS was also active outside of Latin America, notably buying a 64% stake in

pilgrim’s pride, the US-based poultry and pork producer, via a US-based subsidiary for a total consideration of US$2.75bn. JBS has capitalised on the downturn and consolidation in the global meat packing industry, adroitly carrying out its M&A strategy in order to position itself as the world’s leading firm in the industry. Such a strategy almost certainly guarantees further big and bold plays in the year ahead.

Turning to the broader Latin American M&A market, prospects for the year ahead are strong, even at this early stage of 2010. In January, America Movil, the Mexican mobile telecoms giant, made a tender offer to acquire Carso global Telecom, the Mexico-based fixed line operator, for a total consideration of US$19.36bn. Notably, the transaction ranks as the largest deal undertaken in Latin America since 2006 when America Movil moved to acquire national rival America Telecom for US$31.70bn.

In January, Mexico saw another blockbuster transaction come to market as well. The deal saw Dutch brewing group Heineken buy FEMSA Cerveza, the Mexican beer brewer and distributor, in a transaction valued at US$7.69bn. Interestingly, both of the heftily-priced acquisitions undertaken by America Movil and Heineken have already eclipsed the top transaction undertaken in 2009, hopefully indicative of better things to come for the wider Latin America M&A market in 2010.

NoT SURpRISINgLy, M&A ACTIvITy IN LATIN AMERICA FoUNDERED IN 2009 AS THE FALLoUT FRoM THE gLoBAL FINANCIAL CRISIS gRIppED THE REgIoN, SHEARINg BACk TRANSACTIoN voLUMES AND vALUES AS BoTH TRADE pLAyERS AND pRIvATE EQUITy FUNDS Took A CoNSERvATIvE AppRoACH To DEALMAkINg. IN THE yEAR, THERE wERE 355 DEALS TRANSACTED CoLLECTIvELy vALUED AT US$71.54BN, REpRESENTINg RESpECTIvE FALLS oF 27% AND 30% ovER yEAR-EARLIER FIgURES.

15

LATIN AM

ERICA

Monthly M&A Insider

Top 10 LATIn AMerIcAn Announced deALs Y/e 31 deceMber 2009Announced status Target company sector bidder company seller company exit multiples (x) bid premia


revenue ebITdA p/e

16-Sep-09 p Bertin SA Consumer JBS SA BNDES participacoes SA; J&F participacoes SA; and ZMF Fundo de Investimento em participacoes

1.7 - 6,815

21-Jul-09 C Aracruz Celulose SA (56.02% stake)


Fibria 2.3 6.4 - 4,845

8-Sep-09 p gvT SA TMT vivendi SA 4.7 20.1 319.3 76.1% 4,306

7-oct-09 L gvT SA TMT Telecomunicacoes de Sao paulo SA

4.2 17.8 281.8 28.6% 3,818

19-May-09 C Sadia SA (66.90% stake)

Consumer BRF Brasil Foods SA 0.7 6.9 - 2,923

6-Dec-09 p walmart Centroamerica

Consumer wal-Mart de Mexico SA de Cv

wal-Mart Stores Inc

0.8 - 2,717

20-Apr-09 C BTg pactual Financial Services

BTg Investments Lp UBS Ag n/a n/a - 2,500

22-oct-09 C oy Metsa-Botnia Ab (Uruguay operations)

Agriculture UpM-kymmene oyj oy Metsa-Botnia Ab

- 2,405

23-Apr-09 C Terna participacoes SA


Cemig geracao e Transmissao SA

Terna - Rete Elettrica Nazionale SpA

8.1 9.5 59.0 34.3% 2,177

29-Jan-09 C glencore International Ag (prodeco business in Colombia)


Xstrata Coal South America Ltd

glencore International Ag

- 2,000

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

Top DEALS & EXpECTED DEALS

Top 5 LATIn AMerIcAn Announced deALs of The MonTh (jAnuArY 2010)Announced status Target company sector bidder company seller company exit multiples (x) bid premia

1-day beforedeal value

($m)revenue ebITdA p/e

13-Jan-10 p Carso global Telecom SAB de Cv

TMT America Movil SA de Cv - 19,358

13-Jan-10 p Telmex Internacional SAB de Cv

TMT America Movil SA de Cv 7.1 1.7 2.3 34.8%

11-Jan-10 p FEMSA Cerveza SA de Cv

Consumer Heineken Nv Fomento Economico Mexicano SAB de Cv

- 7,692

27-Jan-10 p Bunge participacoes e Investimentos SA


vale SA Bunge Limited - 3,800

29-Jan-10 p LQ Inversiones Financieras SA (8.52% stake)

Financial Services

Citigroup Inc Quinenco SA n/a n/a - 534


16

LATIN AM

ERICA

Monthly M&A Insider

Top DEALS & EXpECTED DEALS

situation Target company

sector potential bidder company

financial adviser to bidder (b); target (T); seller (s)

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

comments

Rumoured takeover target

TgN Energy, Mining & Utilities

Emgasud Barclays plc (T)

Techint Compania Tecnica Internacional SACI

US$344m (TgN debt)

Emgasud, the Argentine energy company, has offered to buy a majority stake in Transportadora de gas del Norte (TgN), a local natural gas transporter, pagina/12 reported. The paper cited Alejandro Ivanissevich, owner of Emgasud, as saying that that TgN business plan must be redone, the company has failed in its strategy and Emgasud can provide one for the company. As reported, TgN defaulted on its US$344m debt in December. The value of its bonds fell to 10 cents. Following the default declaration, the company must face government intervention.

Rumoured takeover target

Express de Santiago Uno

Transportation grupo Rios US$34m (target

revenue)

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

Expected deals based on confirmed announcements by companies involved

pIpeLIne of LATIn AMerIcAn expecTed deALs

17

LATIN AM

ERICA

Monthly M&A Insider

LEAgUE TABLES

vALUEY/e


($m)deal count

1 JpMorgan 24,108 21

2 BNp paribas 16,262 10

3 Credit Suisse 15,885 25

4 Citigroup 15,180 14


6 Morgan Stanley 11,060 17

7 Santander global Banking and Markets 9,198 6

8 Rothschild 8,881 8

9 Banco Espirito Santo de Investimento 8,084 2

10 Estater Assessoria Financeira 7,950 5

11 Banco Bradesco 6,027 8

12 CALyoN 4,766 2


14 pohjola Corporate Finance 2,405 1

15 Barclays Capital 2,300 3Source: mergermarket

voLUME

The financial adviser leue tables by value and volume have been run from 01 January 2009 to 31 December 2009 and exclude lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being Latin America

Y/e 31-dec-2009

house Value ($m)

deal count






6 BNp paribas 16,262 10


8 Banco Bradesco 6,027 8

9 Santander global Banking and Markets 9,198 6


11 Estater Assessoria Financeira 7,950 5

12 Bank of America Merrill Lynch 829 5

13 pricewaterhouseCoopers 756 5

14 global M&A 2,205 4

15 Deutsche Bank 2,202 4Source: mergermarket

Top 15 fInAncIAL AdVIsers – LATIn AMerIcA

vALUEY/e


($m)deal count

1 Machado Meyer Sendacz e opice 26,069 23

2 Barbosa, Mussnich & Aragao 23,183 20

3 pinheiro Neto Advogados 16,863 20

4 Mattos Filho, veiga Filho, Marrey Jr. e Quiroga Advogados

12,475 29


6 Souza, Cescon Avedissian, Barrieu e Flesch Advogados

11,718 17

7 Simpson Thacher & Bartlett 10,894 9

8 Tozzini Freire Teixeira E Silva Advogados 10,312 11

9 Allen & overy 9,832 3

10 garrigues 8,430 3

11 AM pereira, Saragga Leal, oliveira Martins, Judice & Associados

8,071 1

12 Cleary gottlieb Steen & Hamilton 8,028 5

13 Motta Fernandes Rocha Advogados 7,490 5

14 Bredin prat 7,316 4

15 Freshfields Bruckhaus Deringer 5,736 6Source: mergermarket

voLUME

The legal adviser leue tables by value and volume have been run from 01 January 2009 to 31 December 2009 and include lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being Latin America

Y/e 31-dec-2009

house Value ($m)

deal count

1 Mattos Filho, veiga Filho, Marrey Jr. e Quiroga Advogados

12,475 29

2 Machado Meyer Sendacz e opice 26,069 23

3 Barbosa, Mussnich & Aragao 23,183 20

4 pinheiro Neto Advogados 16,863 20

5 Souza, Cescon Avedissian, Barrieu e Flesch Advogados

11,718 17

6 Tozzini Freire Teixeira E Silva Advogados 10,312 11

7 Rodrigo Elias & Medrano 78 11

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

252 10


10 Simpson Thacher & Bartlett 10,894 9

11 Azevedo Sette Advogados 602 9

12 prieto & Carrizosa 583 9

13 Skadden Arps Slate Meagher & Flom 5,210 8

14 Linklaters 4,445 7

15 gomez-pinzon Zuleta 1,912 7Source: mergermarket

Top 15 LegAL AdVIsers – LATIn AMerIcA

18

LATIN AM

ERICA

Monthly M&A Insider

TREND gRApHS

LATIn AMerIcAn M&A quArTerLY Trend

vALUE voLUME

0

10,000

20,000

30,000

40,000

50,000

60,000

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e ($

m)

0

25

50

75

100

125

150

175

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals


LATIn AMerIcAn M&A quArTerLY MId-MArkeT Trend

vALUE voLUME

0

1,000

2,000

3,000

4,000

5,000

6,000

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e ($

m)

0

20

40

60

80

100

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

19

LATIN AM

ERICA

Monthly M&A Insider

TREND gRApHS

LATIn AMerIcAn M&A secTor breAkdown Y/e 2009

vALUE voLUME

19.5%

27.5%

14.4%

0.4%2.4%

6.0%0.7%

0.6%

14.9%

4.2%

7.4%

2.3%Consumer



Financial Services

Business Services

TMT

Construction


Transport

Agriculture

Real Estate

Leisure

21.7%

15.8%

12.4%

15.8%

4.8%

4.8%

6.8%

4.5%

3.9%

3.1% 2.5%3.9% Consumer



Financial Services

Business Services

TMT

Construction


Transport

Agriculture

Real Estate

Leisure

LATIn AMerIcAn M&A quArTerLY prIVATe equITY Trend

vALUE voLUME

0

500

1,000

1,500

2,000

2,500

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e ($

m)

Latin American buyouts

Latin American exits

0

3

6

9

12

15

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

Latin American buyouts

Latin American exits

NORTH

AMERICA

NORTH AMERICAA MERgERMARkET M&A REpORT ON


M&A activity in 2010 may follow the trend of the previous years and continue to decline as economic recovery expectations remain grim. The latest unemployment figures continue to disappoint as 14.8m are still out of work in US resulting in consumers spending less and saving more. Access to credit will remain the dominant challenge to M&A activity particularly in relation to mid-market deals. However, buyers with healthy balance sheets and cash reserves will be able to take advantage of some of the best valuations seen in recent years. The Fortune 1000 companies have $1.8tr of cash reserves. Mergers of productivity will be the driving force in 2010 as companies will look to merge with similar players to improve efficiencies and grow revenues. International buyers are also expected to continue acquiring US targets in order to access US customers and the intellectual property of American companies. In the private equity market, momentum will pickup as firms will be looking to sell businesses that they have owned for several years. Although, mega buyouts are not expected, transactions in the $1bn to $5bn range are seen on the horizon.

MId-MARkET dEAlS ARE ON THE RISE

North American mid-market deal activity has seen an increase in value and volume after facing significant downturn at the end of 2008. Mid-market deals nearly doubled in value from $12bn in Q408 to $24bn in Q409, while deal volume increased from 218 to 341 during the same fiscal quarters. despite the significant increase, mid-market deal activity remained at its lowest value since 2004. Whether the resurgence witnessed at the tail end of 2009 will continue to stimulate activity in 2010 remains to be seen, but it certainly provides a positive direction for what we can expect from mid-market dealmaking.

THE COST OF STAbIlIzATION, FINANCIAl CRISIS RESpONSIbIlITy FEE TO RAISE $177bN OvER THE NExT 12 yEARS

The US government has had a substantial impact on the M&A market in North America, acquiring ‘silent’ stakes in numerous financial institutions and propping up the automotive industry with billions of dollars, as part of the economic recovery effort. The anticipated impact of the stabilization efforts on the deficit was in excess of $550bn, according to president Obama’s February budget. The US Treasury expects that impact to be less than $120bn. In its report released on 10 February, the US treasury stated that it has already recovered two-thirds of the TARp investments in financials institutions and earned $17bn in income from those investments. JpMorgan repaid the funds in June, along with goldman Sachs and Morgan Stanley, while bank of America and Wells Fargo repaid $40bn in december 2009. In order to avoid adding to the deficit, the president has proposed a Financial Crisis Responsibility Fee that will apply to some of the largest institutions and recipients of the TARp funds. The 10 year fee which may go into effect at the end of June is expected to raise $177bn over a 12 year period and $90bn over the next 10 years. The government estimates that over 60% of revenues will be paid by the 10 largest financial institutions.

THE lAST TWO yEARS OF THE pREvIOUS dECAdE SAW A STEAdy FAll IN M&A ACTIvITy IN NORTH AMERICA bOTH IN TERMS OF vAlUATIONS ANd dEAl NUMbERS. A TOTAl OF 4,036 TRANSACTIONS WERE RECORdEd IN 2008 vAlUEd AT $826.9bN, WHIlE IN 2009 ACTIvITy dEClINEd TO 3,046 ANNOUNCEd dEAlS vAlUEd AT $764.2bN.

21

NORTH

AMERICA

Monthly M&A Insider

Top 10 NorTh AMerIcAN ANNouNced deAls for Y/e 31 deceMber 2009 Announced status Target company sector bidder company seller company exit multiples (x) bid premia


($m)revenue ebITdA p/e

26-Jan-09 C Wyeth pharma, Medical & biotech

pfizer Inc 2.8 11.6 15.3 14.7% 63,266

1-Jun-09 C Motors liquidation Co (bulk of assets)


The United States department of the Treasury; the governments of Canada and Ontario; and the voluntary Employees beneficiary Association

Motors liquidation Co

- 48,207

30-Jan-09 C genentech Inc (44.20% stake)

pharma, Medical & biotech

Roche Holding ltd 7.7 17.4 29.6 13.0% 44,291

9-Mar-09 C Schering plough Corporation

pharma, Medical & biotech

Merck & Co Inc 2.3 8.7 22.1 33.9% 43,198

14-dec-09 p xTO Energy Inc Energy, Mining & Utilities

ExxonMobil Corporation 5.2 7.3 14.5 24.6% 40,361

3-Nov-09 p burlington Northern Santa Fe Corporation

Transportation berkshire Hathaway Inc 2.4 8.1 16.4 31.5% 35,574

10-Jun-09 C Citigroup Inc (36% stake)

Financial Services

United States department of the Treasury

n/a n/a -4.7% 25,000

23-Mar-09 C petro-Canada Energy, Mining & Utilities

Suncor Energy Inc 0.8 2.9 6.2 34.8% 18,400

4-May-09 C liberty Entertainment Inc

TMT The direcTv group Inc - 15,519

19-Mar-09 C IndyMac Federal bank FSb

Financial Services

MSd Capital lp; J.C Flowers & Co llC; Stone point Capital llC; paulson & Co Inc; Soros Strategic partners lp; and Silar Advisors lp

n/a n/a - 13,900

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

TOp dEAlS & ExpECTEd dEAlS

Top 5 NorTh AMerIcAN ANNouNced deAls of The MoNTh (JANuArY 2010)Announced status Target company sector bidder company seller company exit multiples (x) bid premia

1-day before

deal value($m)revenue ebITdA p/e

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


Williams partners lp The Williams Companies Inc

- 11,750

5-Jan-10 p kraft Foods (frozen pizza business)

Consumer Nestle SA kraft Foods Inc 1.8 12.5 - 3,700

18-Jan-10 p brink's Home Security Holdings Inc


Tyco International ltd 35.3% 1,838

14-Jan-10 p bare Escentuals Inc Consumer Shiseido Company limited

39.9% 1,807

20-Jan-10 p Nb power (7 hydroelectric facilities and 2 diesel peaking units)


Hydro Quebec International Inc

Nb power - 1,752

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

22

NORTH

AMERICA

Monthly M&A Insider

TOp dEAlS & ExpECTEd dEAlS

situation Target company sector potential bidder company


seller company


($m)

comments

Expected deal Ivanhoe Mines Energy, Mining & Utilities

bHp billiton plc, Rio Tinto plc, xstrata plc, vale SA, or Teck Resources

(T)Citigroup; Hatch Corporate Finance

7,090 Rio was tipped as the most likely bidder of the vancouver-based copper and metals miner as a result of its recent joint venture with Ivanhoe, where it committed US$388m to Ivanhoe to increase its stake to 19.7% from 9.5%. It also has the option to acquire up to 43.1% of Ivanhoe’s shares under fixed price options, with a right to further increase that interest to 46.65% through on-market purchases. Ivanhoe Mines announced Wednesday it had hired Citigroup and Hatch Corporate Finance to assess strategic options.

Expected deal Interactive data Corporation

business Services

Undisclosed bidder

(S)goldman Sachs

pearson plc 2,401 The Interactive data Corporation (NySE:IdC) auction process is on a fast track, and first round bids are expected to be due within the first two weeks of February, sources close to the discussions said.

Expected deal Argon St Inc defence Undisclosed bidder

(T)Stone key partners

535 Argon ST (NASdAQ:STST), the defense company exploring strategic alternatives with advisor Stone key partners, is yet to have solicited formal interest from bidders, claimed several industry sources following the situation. All of the industry sources noted Argon is trading significantly above its unaltered stock price, shrinking the potential for a significant deal premium.

pIpelINe of NorTh AMerIcAN expecTed deAls

23

NORTH

AMERICA

Monthly M&A Insider

lEAgUE TAblES

vAlUEY/e


($m)deal count



3 JpMorgan 286,979 125


5 barclays Capital 234,323 57

6 bank of America Merrill lynch 203,530 99

7 Evercore partners 175,828 23

8 deutsche bank 107,737 75


10 lazard 91,321 80

11 UbS Investment bank 90,563 81

12 blackstone group 70,158 22

13 greenhill & Co 66,579 22


15 RbC Capital Markets 55,489 69

16 Jefferies & Company 50,135 41

17 Alixpartners 48,896 8

18 Centerview partners 39,093 5

19 Royal bank of Scotland group 32,866 16

20 Houlihan lokey 31,532 76Source: mergermarket

vOlUME

The financial adviser league tables by value and volume have been run from 01 January 2009 to 31 december 2009 and exclude lapsed and withdrawn deals. The tables cover all sectors andare based on the geography of either the target, bidder or seller being USA and Canada

Y/e 31-dec-2009

house Value ($m)

deal count


2 JpMorgan 286,979 125


4 bank of America Merrill lynch 203,530 99



7 lazard 91,322 80


9 Houlihan lokey 31,532 76

10 deutsche bank 107,737 75


12 barclays Capital 234,323 57


14 Jefferies & Company 50,135 41

15 kpMg 8,852 40

16 bMO Capital Markets 8,566 37

17 Macquarie group 10,443 35

18 CIbC World Markets 29,044 32

19 Scotia Capital 11,889 32

20 pricewaterhouseCoopers 4,814 32Source: mergermarket

Top 20 fINANcIAl AdVIsers – NorTh AMerIcA

vAlUEY/e


($m)deal count


2 Cravath Swaine & Moore 293,682 52


4 davis polk & Wardwell 222,664 62

5 Sullivan & Cromwell 205,597 64

6 Simpson Thacher & bartlett 198,976 72

7 Weil gotshal & Manges 162,257 79

8 Wachtell, lipton, Rosen & katz 155,800 41


10 latham & Watkins 151,771 151

11 dewey & leboeuf 141,124 84

12 Clifford Chance 119,988 55

13 blake, Cassels & graydon 116,840 90

14 Cadwalader, Wickersham & Taft 116,277 7

15 debevoise & plimpton 116,097 45

16 paul Weiss Rifkind Wharton & garrison 114,236 54

17 Freshfields bruckhaus deringer 113,290 47

18 Osler, Hoskin & Harcourt 101,058 77

19 Covington & burling 100,975 24

20 Stikeman Elliott 91,645 62Source: mergermarket

vOlUME

The legal adviser league tables by value and volume have been run from 01 January 2009 to 31 december 2009 and include lapsed and withdrawn deals. The tables cover all sectors andare based on the geography of either the target, bidder or seller being USA and Canada

Y/e 31-dec-2009

house Value ($m)

deal count

1 Jones day 19,034 168

2 latham & Watkins 151,771 151


4 kirkland & Ellis 17,763 117

5 dlA piper 10,982 114

6 blake, Cassels & graydon 116,840 90

7 baker & Mckenzie 23,777 86

8 dewey & leboeuf 141,124 84



11 Wilson Sonsini goodrich & Rosati 66,161 79

12 Osler, Hoskin & Harcourt 101,058 77

13 Cooley godward kronish 10,291 74

14 Simpson Thacher & bartlett 198,976 72


16 O'Melveny & Myers 9,874 65


18 gibson dunn & Crutcher 57,984 63

19 davis polk & Wardwell 222,664 62

20 Stikeman Elliott 91,645 62Source: mergermarket

Top 20 legAl AdVIsers – NorTh AMerIcA

24

NORTH

AMERICA

Monthly M&A Insider

lEAgUE TAblES

vAlUE vOlUME

The private equity buyout activity tables by value and volume are based on private equity firms advising the bidder on buyout deals where the dominant geography of the target company is USA and Canada The tables by value and volume have been run from 01 January 2009 to 31 december 2009 and exclude lapsed and withdrawn deals

AcTIVITY TAble of prIVATe equITY fIrMs oN NorTh AMerIcAN buYouTs

vAlUE

Y/e 31-dec-2009

house Value ($m)

deal count


2 Sequoia Capital 2,363 7

3 Accel partners & Co 1,723 7

4 benchmark Capital 1,578 10

5 kleiner perkins Caufield & byers 1,401 5

6 New Enterprise Associates 1305 6

7 vestar Capital partners 1300 1

8 delphi ventures 1202 3

9 Apax partners 930 2

10 gTCR golder Rauner 900 3Source: mergermarket

vOlUME

The private equity exit activity tables by value and volume are based on private equity firms advising the vendor on exit deals where the dominant geography of the target company is USA and Canada The tables by value and volume have been run from 01 January 2009 to 31 december 2009 and exclude lapsed and withdrawn deals

Y/e 31-dec-2009

house Value ($m)

deal count

1 benchmark Capital 1,578 10

2 Intel Capital 361 9

3 Sequoia Capital 2,363 7

4 Accel partners & Co 1,723 7

5 New Enterprise Associates 1,305 6

6 TA Associates 788 6

7 American Capital 571 6

8 US venture partners 418 6

9 kleiner perkins Caufield & byers 1,401 5

10 Warburg pincus 407 5Source: mergermarket

AcTIVITY TAble of prIVATe equITY fIrMs oN NorTh AMerIcAN exITs

Y/e 31-dec-2009

house Value ($m)

deal count

1= Stone point Capital 13,900 1

1= Soros Strategic partners 13,900 1

1= MSd Capital 13,900 1

1= J.C Flowers & Co 13,900 1

5 Tpg Capital 5,470 5

6 Canada pension plan Investment board 5,057 1


8 general Atlantic 2,800 3

9 Apollo Management 2,662 2

10 Advent International 2,223 3Source: mergermarket

Y/e 31-dec-2009

house Value ($m)

deal count

1 platinum Equity 94 6

2 Marlin Equity partners 43 6

3 Tpg Capital 5,470 5

4 golden gate Capital 528 5

5 patriarch partners 125 4

6 AbS Capital partners 99 4

7 Wayzata Investment partners 92 4

8 Milestone partners 31 4

9 Catterton partners - 4

10 blackstone group 3,200 3Source: mergermarket

25

NORTH

AMERICA

Monthly M&A Insider

TRENd gRApHS

NorTh AMerIcAN M&A quArTerlY TreNd

0

100,000

200,000

300,000

400,000

500,000

600,000

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e ($

m)

0

200

400

600

800

1,000

1,200

1,400

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

of d

eals

NorTh AMerIcAN M&A quArTerlY MId-MArkeT TreNd

vAlUE vOlUME

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e ($

m)

0

100

200

300

400

500

600

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals


vAlUE vOlUME

26

NORTH

AMERICA

Monthly M&A Insider

TRENd gRApHS

NorTh AMerIcAN M&A secTor breAkdowN Y/e 2009

vAlUE vOlUME

1.3%

10.8%

12.0%

5.7 %

5.8%

19.8%

13.4%

24.8%

4.8%

0.3%0.5%

0.2%0.7%


Financial services

Business services

Consumer

Energy, Mining & Utilites

TMT

Leisure

Transportation


Construction

Agriculture

Real Estate

Defence

0.6%

18%

15.7%

12.6%

12.9%

9.4%

12.1%

9.4%

3.5%2.8%

0.7%1.7%

0.7%

TMT


Financial services


Business services

Consumer


Leisure

Construction

Transportation

Real Estate

Defence

Agriculture


Financial services

Business services

Consumer


TMT

Leisure

Transportation


Construction

Agriculture

Real Estate

Defence

NorTh AMerIcAN M&A quArTerlY prIVATe equITY TreNd

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

225,000

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e ($

m)

North American buyouts

North American exits

0

25

50

75

100

125

150

175

200

225

250

275

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

North American buyouts

North American exits

vAlUE vOlUME

27

NORTH

AMERICA

Monthly M&A Insider

TRENd gRApHS

NorTh AMerIcAN M&A deAl sIze breAkdowN

vAlUE vOlUME

0

100

200

300

400

500

600

700

800

900

1,000

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> $501m

$251m-$500m

$101m-$250m

$15m-$100m

$5m-$14.9m

Valu

e ($

bn)

0

500

1,000

1,500

2,000

2,500

3,000

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

Num

ber

of d

eals

> $501m

$251m-$500m

$101m-$250m

$15m-$100m

$5m-$14.9m

Value not disclosed


europe

A mergermArket m&A report on

eUrope

However, m&A activity in europe over the course of 2009 remained pretty grim with a decrease of 53.4% in terms of value and a 34.7% decline in terms of volume in comparison to 2008. Deal flow overall was characterised by a high number of small-to-medium-sized deals across the region.

Despite this, 2009 witnessed the return of so called ‘mega deals’, albeit in small numbers. Among those the protracted kraft/Cadbury deal stands out – a deal which was only recently announced after an improved offer from the US food giant, kraft, was accepted by the board of the Uk confectionary company, Cadbury.

playing host to the two largest deals of the year, the Uk was also the most active country overall in europe with regards to m&A with a 26.7% share in value and a 17.3% in volume in 2009. Looking at the same data, the Financial sector turned out to be the largest segment in the Uk and in the whole of europe, making up 50.8% and 26.1% of total deal flow in terms of value respectively. As in previous years, the energy sector was once again one of the most attractive sectors for consolidation, making up 26% of total deal flow value. Indeed, three of the top five deals in 2009 were announced in this space; the acquisition of essent nV by rWe Ag, nuon energy nV by Vattenfall AB, and a 25% stake in endesa by enel came to an aggregated valuation of €26.9bn.

eUrope 2010: FrAnCe AnD IBerIA promISe to BeCome tHe regIon’S FoCUS

m&A practitioners are keenly watching the potential bidding war erupting for Cimpor, as three Brazilian groups are lining up to get a hold of the listed portuguese cement producer. After being disappointed by the relatively lukewarm battle for Cadbury in the Uk, europe is now watching a heated auction mounting in portugal. Following the announcement of CSn’s €5.6bn tender offer late last year, Votorantim and Camargo Correa made off-market stake acquisitions in Cimpor by early February. Lafarge of France agreed to sell its 17.28% stake in Cimpor in Votorantim for about €727m, whilst teixeira Duarte of portugal sold 22.17% to Camargo Correa for €968m.

meanwhile, the market’s scrutiny over Spanish and portuguese public debts may lead to an increase in inbound m&A activities in the region, as both governments would welcome foreign ownership of local businesses to boost corporate tax revenues and avoid major private sector insolvencies.

the French m&A-scene is also expected to be busy this year. m&A practitioners predict consolidation in Financial Services, telecom, and the pharmaceuticals sector. Analysts say that cash-rich French corporations are willing to do deals this year after a particularly cautious 2009. one potential deal on the radar is the possibility of Bnp paribas re-bidding for Societe generale, a rumour borne out of the fact that consolidation in the sector is needed at the moment.

However, for cash-strapped companies, finding debt financing is still a tall order. Further equity issues are thus expected, especially by companies, in the Industrials sector. For example, eADS, the Airbus manufacturer, is expected to make rights issue this year to fuel its growth through m&A.

H2 2009 HAS Been DeSCrIBeD AS A tIme oF reCoVery AFter tHe CreDIt CrUnCH, AnD, notABLy, tHe Uk IS FoLLoWIng tHIS WIDer trenD AnD IS WeLL on tHe roAD to reVIVAL. tHe BIggeSt m&A trAnSACtIon oF 2009 In eUrope oCCUrreD Here, WItH tHe Uk goVernment AgreeIng to FUrtHer reCApItALISe royAL BAnk oF SCotLAnD In A €28Bn DeAL.

29

europe

Monthly M&A Insider

Top 10 EuropEAn AnnouncEd dEAls for Y/E 31 dEcEMbEr 2009 Announced status Target company sector bidder company seller company Exit multiples (x) bid premia


(€m)revenue EbITdA p/E

3-nov-09 p royal Bank of Scotland group plc (14.1% stake)

Financial Services

Hm treasury n/a n/a (loss) - 28,469

9-nov-09 C Cadbury plc Consumer kraft Foods Inc 2.7 18.2 36.2 10.8% 15,342

20-Feb-09 C endesa SA (25.01% stake)


enel SpA Acciona SA 2.7 8.5 18.6 76.0% 11,107

23-Feb-09 C nuon nV energy, mining & Utilities

Vattenfall AB 1.8 14.4 20.7 - 8,500

12-Jan-09 C essent nV energy, mining & Utilities

rWe Ag 1.0 - 7,300

19-Jan-09 C royal Bank of Scotland group plc (29.79% stake)

Financial Services

Hm treasury n/a n/a (loss) -8.5% 5,884

31-Jul-09 C grupo Ferrovial SA Construction Cintra Concesiones de Infrastructuras de transporte SA

0.4 2.1 (loss) -21.5% 5,796

18-Dec-09 p Cimpor Cimentos De portugal SgpS SA

Construction Companhia Siderurgica nacional

2.8 9.8 17.4 5.2% 5,629

20-may-09 C Julius Baer group Ltd

Financial Services

Julius Baer Holding Ag (Shareholders)

Julius Baer Holding Ag

n/a n/a 17.4 - 5,238

28-Sep-09 p Solvay pharmaceuticals SA

pharma, medical & Biotech

Abbott Laboratories Solvay SA 1.7 7.3 - 4,500


top DeALS & expeCteD DeALS

Top 5 EuropEAn AnnouncEd dEAls of ThE MonTh (jAnuArY 2010)Announced status Target company sector bidder company seller company Exit multiples (x) bid premia


(€m)revenue EbITdA p/E

4-Jan-10 p Alcon Inc (52% stake)

pharma, medical & Biotech

novartis Ag nestle SA 9.5% 18,247

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

mikhail gutseriyev (private Investor)

en+ group Ltd - 4,595

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

Alstom SA; and Schneider electric SA

AreVA SA 2.4 7.0 - 4,090

19-Jan-10 p Cegelec SA Industrials & Chemicals

Vinci SA Qatari Diar real estate Investment Co

- 1,291

27-Jan-10 p pets At Home Limited

Consumer kohlberg kravis roberts & Co

Bridgepoint Capital Limited

2.6 14.8 21.9 - 1,101


30

europe

Monthly M&A Insider

situation Target company sector potential bidder company


seller company


($m)

comments

rumoured takeover target

telecom Italia SpA tmt telefonica 20,005 the Italian government has not given any favorable opinion to a possible telecom Italia takeover by telefonica. the Italian government is about to give clearance to a merger between the two phone companies. the Berlusconi adminstration is likely to put a number of conditions on the merger such as keeping telecom Italia phone network in Italian hands and a lock-up clause to ensure Italian shareholders will keep a stake in the future merged company.

takeover target SFr SA tmt Vivendi SA Vodafone group plc

7,000 Vivendi, the listed French media and telecoms group, is considering acquiring the 44% it does not already own in the mobile phone group SFr, from Uk mobile phone giant Vodafone. the interest of Vivendi is public knowledge and several analysts believe that the new Vodafone Ceo is more open to selling the shares. However, the two parties have yet to engage in negotiations. the 44% in SFr could be worth between €7bn and €9bn.

rumoured takeover target

orlen Lietuva Consumer Lukoil oAo, tnk-Bp Holding oAo

polski koncern naftowy orlen SA, government of Lithuania

3,000 the polish treasury would not oppose a sale of the Lithuanian oil refiner orlen Lietuva (mazeikiu nafta) by the polish petrochemical group pkn orlen should logistic situation of orlen Lietuva not improve.

pIpElInE of EuropEAn ExpEcTEd dEAls

top DeALS & expeCteD DeALS

31

europe

Monthly M&A Insider

LeAgUe tABLeS

VALUeY/E


(€m)deal count




4 Lazard 122,085 108




8 Jpmorgan 73,302 111

9 Bank of America merrill Lynch 58,752 55

10 rothschild 57,708 135

11 Barclays Capital 47,659 27


13 gresham Advisory partners 39,900 5

14 royal Bank of Scotland group 38,358 43

15 greenhill & Co 38,308 8

16 Bnp paribas 29,581 64

17 mediobanca 28,287 20

18 Banca ImI/Intesa Sanpaolo 23,475 24

19 Banco Bilbao Vizcaya Argentaria 22,252 8

20 Santander global Banking and markets 21,364 15Source: mergermarket

VoLUme

the financial adviser league tables by value and volume have been run from 01 January 2009 to 31 December 2009 and exclude lapsed and withdrawn deals. the tables cover all sectors and are based on the geography of either the target, bidder or seller being europe

Y/E 31-dec-2009

house Value (€m)

deal count

1 rothschild 57,708 135

2 kpmg 12,956 125

3 Deloitte 9,332 117


5 Jpmorgan 73,302 111

6 Lazard 122,085 108



9 pricewaterhouseCoopers 13,687 101


11 ernst & young 7,193 72


13 Bnp paribas 29,581 64

14 Citigroup 118,880 60

15 Bank of America merrill Lynch 58,752 55

16 Ing 19,639 47

17 m&A International 1,814 44

18 royal Bank of Scotland group 38,358 43

19 Close Brothers Corporate Finance 1,450 43

20 HSBC Bank 15,317 40Source: mergermarket

Top 20 fInAncIAl AdVIsErs

VALUeY/E


(€m)deal count

1 Freshfields Bruckhaus Deringer 201,425 171





6 Cravath Swaine & moore 63,939 16

7 Latham & Watkins 61,253 64

8 Skadden Arps Slate meagher & Flom 60,095 44

9 Herbert Smith/gleiss Lutz/Stibbe 53,438 83

10 Allens Arthur robinson 52,673 12

11 Davis polk & Wardwell 47,401 12

12 Freehills 42,254 13



15 Homburger 37,591 10

16 Wilson Sonsini goodrich & rosati 35,999 9

17 Allen & overy 35,456 151

18 Dewey & LeBoeuf 28,634 42

19 gibson Dunn & Crutcher 27,763 27

20 Uria menendez 26,710 30Source: mergermarket

VoLUme

the legal adviser league tables by value and volume have been run from 01 January 2009 to 31 December 2009 and include lapsed and withdrawn deals. the tables cover all sectors and are based on the geography of either the target, bidder or seller being europe

Y/E 31-dec-2009

house Value (€m)

deal count

1 Freshfields Bruckhaus Deringer 201,425 171


3 Allen & overy 35,456 151

4 CmS 12,413 137


6 DLA piper 6,743 87


8 Jones Day 7,290 81


10 White & Case 9,106 71

11 Lovells 13,260 67




15 eversheds 1,781 51

16 Loyens & Loeff 7,832 50

17 Weil gotshal & manges 13,970 48

18 Skadden Arps Slate meagher & Flom 60,095 44

19 norton rose 10,975 44

20 Ashurst 5,440 44Source: mergermarket

Top 20 lEgAl AdVIsErs

32

europe

Monthly M&A Insider

LeAgUe tABLeS

VALUe

Y/E 31-dec-2009

house Value (€m)

deal count

1 eQt partners 2,619 6

2 gIC Special Investments 2,240 2

3 AxA private equity 2,086 9

4 CVC Capital partners 1,866 2

5 global Infrastructure partners 1,609 1

6 Index Ventures 1,433 2

7= Andreessen Horowitz 1,424 1

7= Silver Lake partners 1,424 1

9 Apax partners 1,080 2

10 one equity partners 927 1Source: mergermarket

VoLUme

the private equity buyout activity tables by value and volume are based on private equity firms advising the bidder on buyout deals where the dominant geography of the target company is europethe tables by value and volume have been run from 01 January 2009 to 31 December 2009 and exclude lapsed and withdrawn deals

Y/E 31-dec-2009

house Value (€m)

deal count

1 Lloyds tSB Development Capital 447 12

2 AxA private equity 2,086 9

3 eQt partners 2,619 6

4 gimv 202 6

5 BLUo SICAV SIF 109 5

6 Advent International 708 4

7 Barclays private equity 475 4

8 HgCapital 454 4

9 Waterland private equity Investments 436 4

10 Altor equity partners 322 4Source: mergermarket

AcTIVITY TAblE of prIVATE EquITY fIrMs on EuropEAn buYouTs

VALUe

Y/E 31-dec-2009

house Value (€m)

deal count

1 BC partners 3,500 2

2 Apollo management 3,500 1

3 Candover Investments 2,894 3

4 Lion Capital 2,354 2

5 Blackstone group Holdings 2,245 1

6 Cinven 2,240 4

7= Caisse de Depot et placement du Quebec 1,187 1

7= Crestview partners 1,187 1

7= Hellman & Friedman 1,187 1

7= new mountain Capital 1,187 1

7= Stone point Capital 1,187 1

7= Vestar Capital partners 1,187 1Source: mergermarket

VoLUme

the private equity exit activity tables by value and volume are based on private equity firms advising the vendor on exit deals where the dominant geography of the target company is europethe tables by value and volume have been run from 01 January 2009 to 31 December 2009 and exclude lapsed and withdrawn deals

Y/E 31-dec-2009

house Value (€m)

deal count

1 3i group 142 11

2 Arques Industries 134 6

3 Cinven 2240 4

4 n.I. partners 159 4

5 npm Capital 30 4

6 Candover Investments 2894 3

7 Sofinnova partners 688 3

8 montagu private equity 639 3

9 gimv 576 3

10 Inflexion private equity partners 230 3Source: mergermarket

AcTIVITY TAblE of prIVATE EquITY fIrMs on EuropEAn ExITs

europe

Monthly M&A Insider 33

trenD grApHS

EuropEAn M&A quArTErlY TrEnd

VALUe VoLUme

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

EuropEAn M&A quArTErlY MId-MArkET TrEnd

VALUe VoLUme

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

0

100

200

300

400

500

600

700

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

moving average trend line

europe


EuropEAn M&A sEcTor brEAkdown Y/E 2009

VALUe VoLUme

1.1%

4.6%

4.7%

26%

0.1% 0.4%2.6%

5.2% 5.9%

10.2%

10.8%

2.4%

26.1%


Consumer

TMT

Business Services

Financial Services



Construction

Leisure

Transportation

Real estate

Agriculture

Defence

0.9%2.2% 0.3%


Consumer

TMT

Business Services

Financial Services



Construction

Leisure

Transportation

Real estate

Agriculture

Defence

3.2%4.2%

4.7%

5.8%

8.6%

9.5%

12.1%12.8%

16.1%

19.4%

trenD grApHS

EuropEAn M&A quArTErlY prIVATE EquITY TrEnd

VALUe VoLUme

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

European buyouts

European exits

0

50

100

150

200

250

300

350

400

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

European buyouts

European exits

europe


EuropEAn M&A dEAl sIzE brEAkdown

VALUe VoLUme

0

50

100

150

200

250

300

350

400

450

500

550

600

650

700

H2 2009

H12009

H2008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> €501m

€251m-€500m

€101m-€250m

€15m-€100m

€5m-€14.9m

Valu

e (€

bn)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> €501m

€251m-€500m

€101m-€250m

€15m-€100m

€5m-€14.9m

Value not disclosed

Num

ber

of d

eals

trenD grApHS

EuropEAn M&A gEogrAphIc brEAkdown Y/E 2009

VALUe VoLUme

UK & Ireland

Germany

CEE

Nordic

France

Benelux

Iberia

Italy

Other

SEE

1.9%5.6%

6.0%27.8%

11.8%

10.2%4.0%

5.6%

13.9%

13.3%

19.1%

12.5%

10.6%12.2%

11.5%

9.6%

8.3%

7.0%

5.8%3.3%

UK & Ireland

Germany

CEE

Nordic

France

Benelux

Iberia

Italy

Other

SEE

36

Mid

dle east &

africa

THE MIDDLE EAST & AFRICA

A MERgERMARkET M&A REpoRT on

Monthly M&A Insider

The United Arab Emirates was particularly affected towards the end of the year, when Dubai World admitted in late november they would not be able to pay their creditors on time.

However, January has already seen an increase in activity in the region, with deals worth more than $2bn being undertaken in the Middle East. In terms of value, 89% of these transactions were in the financial services and real estate sectors, a trend which is likely to continue throughout 2010. As the hardest hit sectors in 2009, they are likely to be the most active this year, particularly with a cash-stricken Dubai attempting to sell off several assets in order to pay its debts.

An increase in industry consolidation and private equity deals is considered to be very likely, with private equity players ready to re-enter the market after spending 2009 on the sidelines. Istithmar, the investment arm of Dubai World, is already attracting interest from several private equity groups for the potential sale of Inchcape Shipping Services.

overall, it is expected the effects of 2009 will continue to an impact on the United Arab Emirates, as the country continues to recover. This could lead to investors looking into other Middle Eastern countries, such as Saudi Arabia. It is likely that oil and gas will remain a good source of M&A within the region, and there may be increased activity in healthcare and education.

AFRICAn M&A: nIgERIA’S bUSy yEAR

M&A activity in Africa dropped 68% and 55% by volume and value, respectively in 2009, with 174 deals valued at $17.4bn, from the previous year. The most active sectors were Financial Services with 34 deals valued at $3.2bn followed by the Mining, Telecommunications, Construction and Consumer sectors. TMT was the most active sector in terms of value with $6.4bn counted 15 deals.

Africa is also increasingly appearing on the radar of international players looking to for new markets to do deals in. both China Unicom and Telefonica recently expressed their intention to launch joint investments in Africa. The privatisation of at least 75% of nigeria’s mobile firm Mtel is one example of an ongoing sales process that could attract foreign bidders. Meanwhile, the European Investment bank confirmed that it is interested in investing in nigerian banks that were bailed out by the nigerian Central bank in 2009. naspers, the South African telecom company, might execute a deal with DST of Russia and poland’s nazsa klasa. The South African and London listed mineral exploration firm, African Eagle has been in talks with potential strategic investors for its Dutwa nickel project.

Transactions in telecom, financial services and mining are expected to lead the African M&A this year. However, despite the increasing interest in African assets, particularly from Asian and Western companies, the outlook on African M&A in 2010 remains gloomy . African assets continue to be viewed as risky since for many foreign investors it is still unknown territory. For M&A to really take off in the region, they need to develop a deep understanding of African local markets coupled with the establishment of strong networks in the region.

While few African countries such as South Africa, Egypt, Morocco and Tunisia are already safe places for M&A, the other countries within the continent remain challenging.

noT EvEn THE booMIng MIDDLE EAST MAnAgED To ESCApE THE EConoMIC CRISIS oF 2009, WITH M&A ACTIvITy DRoppIng SIgnIFICAnTLy THRoUgHoUT THE yEAR. THE TMT, InDUSTRIAL AnD EnERgy SECToRS REMAInED RELATIvELy ACTIvE, WITH THE bIggEST DEALS In THE REgIon CoMIng oUT oF THESE SECToRS.

37

Mid

dle east &

africa

Monthly M&A Insider

Top 10 MIddle eAsT & AfrIcA Announced deAls for Y/e 31 deceMber 2009 Announced status Target company sector bidder company seller company exit multiples (x) bid premia


revenue ebITdA p/e

27-Sep-09 C Telecommunication Company of Iran (50% stake)

TMT Etemad Mobin Development

7,798

11-Dec-09 p Egyptian Company for Mobile Services (48.97% stake)

TMT France Telecom SA 2.8 6.0 13.1 18.8% 2,944

2-nov-09 L Dragon oil plc Energy, Mining & Utilties

Emirates national oil Company Limited

5.3 6.0 10.4 11.0% 1,876

12-Aug-09 C partner Communications Company Ltd (51.31% stake)

TMT Scailex Corporation Ltd Advent Investments pte Ltd

1.9 5.2 9.7 1.0% 1,827

25-oct-09 p bezeq The Israel Telecommunication Corporation Ltd (30.60% stake)

TMT 012 Smile.Communications Ltd

Apax partners LLp; Arkin communications Ltd; and Saban Capital group Inc

2.2 6.0 13.4 -6.7% 1,764

18-May-09 L palestinian Telecommunications Company plc (56.53% stake)

TMT Mobile Telecommunications Company k.S.C.

6.6 14.9 22.1 1,483

17-Mar-09 C Anglogold Ashanti Limited (11.30% stake)

Energy, Mining & Utilties

paulson & Co Inc Anglo American plc

3.9 -5.7% 1,277

1-Sep-09 p Medi Telecom SA (64.36% stake)

TMT FinanceCom SA; Fipar Holding; and RMA Watanya SA

portugal Telecom SgpS SA; and Telefonica Moviles Espana SA

2.8 6.4 31.4 1,138

15-Jan-09 C ApexHi properties Ltd Real Estate Redefine Income Fund Limited

32.7 -5.3% 928

31-Dec-09 p Samcrete Egypt - Engineers and Contractors (99.60% stake)

Construction Samcrete for Engineering Investment

747


Top DEALS & ExpECTED DEALS

Top 5 MIddle eAsT & AfrIcA Announced deAls of The MonTh (jAnuArY 2010)Announced status Target company sector bidder company seller company exit multiples (x) bid premia


revenue ebITdA p/e

10-Jan-10 p Qatar Real Estate Investment Co

Real Estate barwa Real Estate Company QSC

10.1 30.6% 862

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

Financial Services

M1 group Ltd EFg-Hermes Holding Company

3.4% 450

8-Jan-10 p Capevin Investments Ltd (39.40% stake)

Consumer Remgro Limited; and Zeder Investments Limited

11.2 11.2 11.2 -6.4% 158

8-Jan-10 p Capevin Holdings Limited (65.10% stake)

Consumer Remgro Limited; and Zeder Investments Limited

phetogo Investments (proprietary) Limited

2.4 92.7 13.7 142

12-Jan-10 p Crown Flour Mills Limited (99.50% stake)

Consumer olam International Limited

87


38

Mid

dle east &

africa

Monthly M&A Insider

situation Target company sector potential bidder company financial adviser to bidder (b); target (T); seller (s)

seller company Market cap/ est.

value ($m)

comments

Expected deal Qatar Telecom (telecom tower business)

TMT Apax partners LLp; The Abu Dhabi Investment Company; Quippo Telecom Infrastructure Limited; gTL Infrastructure Limited; and new Silk Route

Qatar Telecom QSC

6,154 Qatar Telecommunications Co (Qtel) is actively looking into selling some of its telecom tower assets, a company source said.

Expected deal Inchcape Shipping Services Limited

Transportation Cinven Limited; kohlberg kravis Roberts & Co; Charterhouse Capital partners LLp; Tpg Capital Lp; Advent International Corporation

Istithmar World Capital

700 Inchcape Shipping Services put up for sale by Istithmar with USD 700m asking price; private equity groups interested

Expected deal Dutwa nickel Mine Energy, Mining & Utilities

not disclosed African Eagle Resources plc

450 African Eagle, the London and Johannesburg-listed diversified mineral exploration company, has been in talks with potential strategic partners for its Dutwa nickel project, said operations director Chris Davies.

Expected deals based on confirmed announcements by companies involved

pIpelIne of MIddle eAsT & AfrIcA expecTed deAls

Top DEALS & ExpECTED DEALS

39

Mid

dle east &

africa

Monthly M&A Insider

LEAgUE TAbLES

vALUEY/e


($m)deal count


2 Deutsche bank 8,757 12


4 bank of America Merrill Lynch 7,253 10


6 HSbC bank 6,514 9



9 Citigroup 4,607 6


11 Santander global banking and Markets 4,387 2


13 Deloitte 1,550 5

14 banco Espirito Santo de Investimento 1,213 5

15 Java Capital 1,173 3Source: mergermarket

voLUME

The financial adviser league tables by value and volume have been run from 01 January 2009 to 31 December 2009 and exclude lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being The Middle East & Africa.

Y/e 31-dec-2009

house Value ($m)

deal count

1 Deutsche bank 8,757 12


3 JpMorgan 4,448 11

4 bank of America Merrill Lynch 7,253 10



7 HSbC bank 6,514 9



10 nedbank Capital 746 8

11 kpMg 247 8

12 Standard bank group 906 7


14 Investec 840 6

15 Rand Merchant bank 641 6Source: mergermarket

Top 15 fInAncIAl AdVIsers – MIddle eAsT & AfrIcA

vALUEY/e


($m)deal count


2 Freshfields bruckhaus Deringer 9,150 9



5 binder groesswang Rechtsanwaelte 4,682 3

6 gomez-Acebo & pombo Abogados 4,387 2


8 Debevoise & plimpton 4,040 2

9 Wongpartnership 3,980 4

10= Shook Lin & bok Singapore 3,861 2

10= Uria Menendez 3,802 1

12 bae kim & Lee 3,796 1

13 Shin & kim 3,796 1

14 Allen & gledhill 3,717 2

15 baker & Mckenzie 3,663 7Source: mergermarket

voLUME

The legal adviser league tables by value and volume have been run from 01 January 2009 to 31 December 2009 and ludes lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being The Middle East & Africa.

Y/e 31-dec-2009

house Value ($m)

deal count

1 Werksmans 981 22

2 DLA Cliffe Dekker Hofmeyer 1,484 20

3 Edward nathan Sonnenbergs 2,667 18



6 Freshfields bruckhaus Deringer 9,150 9



9 baker & Mckenzie 3,663 7


11 gide Loyrette nouel 2,098 6

12 Dewey & Leboeuf 614 6



15 Webber Wentzel 911 5Source: mergermarket

Top 15 legAl AdVIsers – MIddle eAsT & AfrIcA

40

Mid

dle east &

africa

Monthly M&A Insider

LEAgUE TAbLES

vALUE

Y/e 31-dec-2009

house Value ($m)

deal count


2 Actis Capital 244 1

3 Investcorp 210 2

4 Eastgate Capital group 210 1

5 RMb Corvest 198 2

6= Citigroup venture Capital Equity partners 140 1

6= Helios Investment partners 140 1

8 vector Capital Corporation 129 1

9 kuwait Finance House 52 1

10 Marlow Capital 40 1Source: mergermarket

voLUME

The private equity buyout activity tables by value and volume are based on private equity firms advising the bidder on buyout deals where the dominant geography of the target company is The Middle East & Africa. The tables by value and volume have been run from 01 January 2009 to 31 December 2009 and exclude lapsed and withdrawn deals.

Y/e 31-dec-2009

house Value ($m)

deal count

1 Investcorp 210 2

2 RMb Corvest 198 2

3 Aureos Capital 27 2


5 Actis Capital 244 1

6 Eastgate Capital group 210 1

7= Citigroup venture Capital Equity partners 140 1

7= Helios Investment partners 140 1

9 vector Capital Corporation 129 1

10 kuwait Finance House 52 1Source: mergermarket

AcTIVITY TAble of prIVATe equITY fIrMs on MIddle eAsT & AfrIcA buYouTs

vALUE

Y/e 31-dec-2009

house Value ($m)

deal count


2 Saban Capital group 1,764 1

3 york Capital Management 624 1

4 gCC Energy Fund 252 1

5= Carmel ventures 136 1

5= Draper Fisher Jurvetson 136 1

7= EFg-Hermes 85 1

7= Tiger global Management 85 1

9 First Israel Mezzanine Investors Fund 76 1

10 Haykala Investment Managers 46 1Source: mergermarket

voLUME

The private equity exit activity tables by value and volume are based on private equity firms advising the vendor on exit deals where the dominant geography of the target company is The Middle East & Africa. The tables by value and volume have been run from 01 January 2009 to 31 December 2009 and exclude lapsed and withdrawn deals.

Y/e 31-dec-2009

house Value ($m)

deal count


2 Sequoia Capital 20 2

3 Saban Capital group 1,764 1

4 york Capital Management 624 1

5 gCC Energy Fund 252 1

6= Carmel ventures 136 1

6= Draper Fisher Jurvetson 136 1

8= EFg-Hermes 85 1

8= Tiger global Management 85 1

10 First Israel Mezzanine Investors Fund 76 1Source: mergermarket

AcTIVITY TAble of prIVATe equITY fIrMs on MIddle eAsT & AfrIcA exITs

41

Mid

dle east &

africa

Monthly M&A Insider

TREnD gRApHS

MIddle eAsT & AfrIcA M&A quArTerlY Trend

vALUE voLUME

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e ($

m)

0

20

40

60

80

100

120

140

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

of d

eals

MIddle eAsT & AfrIcA M&A quArTerlY MId-MArkeT Trend

vALUE voLUME

0

1,000

2,000

3,000

4,000

5,000

6,000

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q1 05

Q404

Q304

Q204

Q104

Valu

e ($

m)

0

10

20

30

40

50

60

70

80

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

of d

eals


42

Mid

dle east &

africa

Monthly M&A Insider

TREnD gRApHS

MIddle eAsT & AfrIcA M&A secTor breAkdown Y/e 2009

vALUE voLUME

1.8%

5.0%

0.8% 0.5%0.1%

14.6%

11.0%

4.4%

53.9%

2.3%

1.5%0.6% Financial Services

TMT



Consumer

Construction

Business Services


Real Estate

Leisure

Agriculture

Transportation

Defence

3.4%

0.4%

5.8%

5.4%

4.3%

4.3%

3.6%

2.5%1.8%

17.6%

17.3%

12.2%12.9%

11.9%

Financial Services

TMT



Consumer

Construction

Business Services


Real Estate

Leisure

Agriculture

Transportation

Defence

MIddle eAsT & AfrIcA M&A quArTerlY prIVATe equITY Trend

vALUE voLUME

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e ($

m)

Middle East& Africa buyouts


0

2

4

6

8

10

12

14

16

18

20

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals



43

Mid

dle east &

africa

Monthly M&A Insider

TREnD gRApHS

MIddle eAsT & AfrIcA M&A geogrAphIc breAkdown Y/e 2009

vALUE voLUME0.9%

1.1%

1.2%0.7%

3.2%

22%

17.1%

6.0%

20.6%

19.1%

1.7%1.3%

1.9%Iran

Israel

South Africa

Egypt

Morocco

United Arab Emirates

Kenya

Saudi Arabia

Kuwait

Angola

Mali

Oman

Nigeria

Other

3.3% 1.4%1.8%

1.8%

1.4%

13.6%

32.6%

6.1%

3.9%

19.7%8.6%

1.8%

1.8%

2.2%

South Africa

Israel

Egypt

United Arab Emirates

Saudi Arabia

Kuwait

Morocco

Kenya

Oman

Jordan

Congo, the DemocraticRepublic of

Angola

Nigeria

Other

3.2%

MIddle eAsT & AfrIcA M&A deAl sIZe breAkdown

vALUE voLUME

0

10

20

30

40

50

60

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> $5$01m

$251m-$500m

$101m-$250m

$15m-$100m

$5m-$14.9m

Valu

e ($

bn)

0

50

100

150

200

250

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> $5$01m

$251m-$500m

$101m-$250m

$15m-$100m

$5m-$14.9m

Value not disclosed

Num

ber

of d

eals

www.mergermarket.comRemark, part of The Mergermarket group

11 West 19th Street, 2nd fl.New York, NY 10011USA

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

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

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disclaimer

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

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

The following notes pertain to data contained in this publication:

• DealsareincludedwherethedealvalueisgreaterthanorequaltoEUR5m.

• Wherenodealvaluehasbeendisclosed,dealsareincludediftheturnoverofthe target is greater than or equal to EUR10m.

• DealsareincludedinthegraphsandTopDealsineachsectionbasedonthe 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.

• Y/E2009referstotheperiod01January2009to31December2009.

A mergermArket report on globAl m&A Activity Monthly M&A … · 2010. 2. 18. · Q2 09 Q1 09 Q4 08...

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