Monthly M&A Insider December 2014 - Amazon S3 · monthly m&a insider | december inside: global...
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Monthly M&A Insider | December
INSIDE:
GLOBAL OVERVIEW
LATIN AMERICA
NORTH AMERICA
ASIA-PACIFIC
EUROPE
MIDDLE EAST & AFRICA
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MERRILL CORPORATION CONTACTS
GLOBAL OVERVIEW
Monthly M&A Insider | December | 01
However, it is not North America but Europe that has the highest share of M&A deals among all regions with 5,266 transactions worth US$792bn, making up 37% of the global total of 14,092 deals. In comparison, North America’s share is less as the number of M&A deals in the region only reached 4,832, which is 34% of the total number of transactions across the globe.
Asia-Pacific has about 23% of the global market with a total of 3,143 deals, Latin America has 3% with 482 transactions and the Middle East and Africa has roughly 3% with 369 deals.
It is not surprising that the value of North American transactions superseded all others given that transformative deals were the hallmark of the region’s dealmaking activity throughout the year. November alone saw three of the month’s top five deals happening in the region – Actavis’ US$63bn acquisition of Allergan Inc, Halliburton Company’s US$38bn acquisition of Baker Hughes Inc and Laboratory Corporation of America Holdings’ approximately US$6bn buy of Covance.
Meanwhile, the active deal pipeline in Europe can probably be attributed to companies in the region slowly regaining their footing by seeking inorganic growth opportunities despite still-volatile global conditions that are now considered a matter of course.
Top deals
Two remarkable M&A deals happened in November that are worth taking a look at not only because of their size, but also due the circumstances surrounding these acquisitions.
In November, Actavis announced the purchase of Allergan in a cash-and-stock deal that effectively thwarted the seven month-long hostile takeover of the Botox maker by Valeant Pharmaceuticals and hedge fund manager Bill Ackman of Pershing Square Capital Management. The Actavis/Allergan merger will result in one of the top 10 biggest global drug manufacturers. As mentioned, this transaction also puts a stop to the rather acrimonious bid by Valeant and Ackman that involved Allergan suing them for breaking insider trading rules as well as a proxy battle by Ackman and Valeant where they wanted to replace Allergan board members.
In a deal that would create an oilfield services behemoth, the second biggest company in the industry Halliburton will be purchasing the third largest services firm Baker Hughes. Given the decrease in oil prices that have led to challenges for energy-related companies, experts predict that the Halliburton/Baker Hughes transaction might be the start of a slew of industry consolidations going forward. The purchase of Baker Hughes will provide Halliburton increased access to international markets such as Russia and Canada where Baker Hughes has more of a presence. It will also give the combined oil services firm an edge to compete with leading rival, Texas-based Schlumberger Inc.
As the M&A market comes very close to year-end, there are some regional trends that are noteworthy in terms of global dealmaking. A top highlight is North America’s dominance in terms of deal value in 2014. As of November 30, North American M&A deals have reached US$1.4tn, comprising 48% of the total value of global M&A deals that are worth roughly US$2.9tn.
Head of Research: Elias Latsis
Editor: Laura Resetar
For advertising opportunities contact: Erik Wickman Tel: + (1) 212 686 3329 [email protected]
Global Overview: Karen Sibayan and Dan Kim
Latin America: Fabio Lopes and Raquel Mozzer
North America: Nicole Corazza, Elizabeth Lim and Urna Chakraborty
Asia-Pacific: Brandon Taylor and Chris Wong
Europe: Andrea Putaturo and Sabzina Oshikova
Middle East & Africa: Kirsty Wilson
TREND GRAPHS
GLOBAL OVERVIEW Monthly M&A Insider | December | 02
GLOBAL M&A QUARTERLY TREND GLOBAL M&A QUARTERLY PRIVATE EQUITY TREND
GLOBAL M&A ANNUAL TREND GLOBAL M&A ANNUAL PRIVATE EQUITY TREND
Num
ber of deals
0
100
200
300
400
500
600
700
800
900
YTD 2014*201320122011201020092008
Valu
e (U
S$bn
)
Buyout value Exit value Buyout volume Exit volume
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Num
ber of deals
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
YTD 2014*201320122011201020092008
Total value Mid-market value Total volume Mid-market volume
Valu
e (U
S$bn
)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Valu
e (U
S$bn
)
Num
ber of deals
0
200
400
600
800
1,000
1,200
1,400
Q414*
Q314
Q214
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Total value Mid-market value Total volume Mid-market volume
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Valu
e (U
S$bn
)
Num
ber of deals
0
50
100
150
200
250
300
350
400
Q414*
Q314
Q214
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Buyout value Exit value Buyout volume Exit volume
0
100
200
300
400
500
600
700
800
900
GLOBAL OVERVIEW Monthly M&A Insider | December | 03
TREND GRAPHS
GLOBAL M&A GEOGRAPHIC BREAKDOWN YTD 2014
VALUE VOLUME
GLOBAL M&A SECTOR BREAKDOWN YTD 2014
VALUE VOLUME
12.1%
18.8%
12.1%
12.0%
8.0%
4.3%
7.5%
10.3%
3.2%3.4%
3.9%
1.2% 1.1%
0.1%2.0%
Industrials & Chemicals
Consumer
Technology
Business Services
Energy, Mining & Utilities
Financial Services
Pharma, Medical & Biotech
Leisure
Media
Construction
Transportation
Real Estate
Telecommunications
Agriculture
Defence
10.6%
6.8%
11.5%
5.5%
19.9%6.8%
12.3%
3.2%
4.3%
9.8%
0.7%0.1%
3.0%
3.0%
2.5%
Industrials & Chemicals
Consumer
Technology
Business Services
Energy, Mining & Utilities
Financial Services
Pharma, Medical & Biotech
Leisure
Media
Construction
Transportation
Real Estate
Telecommunications
Agriculture
Defence
48.1%
27.3%
18.4%
4.4%
1.8%
North America
Europe
Asia-Pacific
Central & South America
Middle East & Africa
34.3%
37.4%
22.3%
3.4%
2.6%
North America
Europe
Asia-Pacific
Central & South America
Middle East & Africa
GLOBAL OVERVIEW Monthly M&A Insider | December | 04
TREND GRAPHS
GLOBAL M&A DEAL SIZE BREAKDOWN YTD 2014
VALUE VOLUME
Return to contents
80
82
84
86
88
90
92
94
96
98
100
YTD 2014*201320122011201020092008
Perc
enta
ge
90.1% 90.9%89.3% 89.0% 89.2%
0.9% 1.0% 1.1% 1.0% 1.0%
4.6% 3.9%
4.5% 4.8% 4.7%
3.8% 3.7%4.7% 4.7% 4.7%
0.6% 0.6%0.4% 0.5%0.5% 0.4% 0.4%
89.8%
1.0%
4.3%
4.5%
88.3%
1.2%
5.1%
4.8%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
0
10
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Perc
enta
ge
41.9% 40.5%
27.3% 29.9% 29.2%
8.9% 7.9% 9.8% 10.1% 9.8%
15.2% 16.5%
20.3% 19.0% 19.4%
19.4% 20.4%27.4% 26.2% 27.5%
14.6% 14.7% 15.2% 14.8% 14.1%
38.6%
8.7%
18.3%
22.1%
12.3%
28.0%
9.9%
19.0%
28.0%
15.1%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
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A MERGERMARKET M&A REPORT ON
LATIN AMERICA
Monthly M&A Insider | December | 06
The sector with the highest value in deals YTD is Energy, Mining & Utilities with 90 deals valued at US$49.2bn. Telecommunications came second with only 15 deals worth US$20.8bn, followed by Financial Services with 38 deals worth US$12.9bn.
The deal of the month was in the Financial Services sector with Cielo SA agreeing to form a joint venture valued at R$11.6bn (US$4.5bn) with Banco do Brasil SA to manage their debit and credit-card transactions. Cielo, a listed Brazil-based company headquartered in Barueri, is the largest company engaged in providing retail electronic payments network services in Brazil, it also offers innovative solutions in complementary segments, and capturing, transmission, processing and settlement services involving credit and debit cards transactions. Banco do Brasil is a listed Brazil-based commercial bank headquartered in Brasilia, controlled by the Brazilian government; it is the largest Brazilian and Latin American bank by assets, and the third by market value.
Cielo will pay a consideration of R$8.1bn (US$3.12bn) for a 70% stake in the credit card business within Ourocard Payment Arrangement (Arranjo Ourocard) of Banco do Brasil, to be financed through the issue of bonds (debentures) in the Brazilian market and a reduction in shareholder dividends. The remaining 30% stake will be held by Banco do Brasil. The transaction is in line with Cielo’s strategy to diversify in the card payment market. In April, Banco Santander agreed to pay R$1.1bn (US$494m) to acquire Getnet Tecnologia em Captura e Processamento de Transacoes H.U.A.H. SA.
In this transaction, Cielo was advised by Banco Bradesco BBI, Deutsche Bank, JP Morgan, Barbosa Mussnish & Aragão and Lefosse Advogados. Banco do Brasil was advised by Banco BTG Pactual, BB Banco de Investimento SA, Rothschild and Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados; BNP Paribas rendered a fairness opinion.
Brazil, Mexico and Chile are still the most active countries in the region. YTD Brazil has 253 deals announced valued at US$48.7bn, Chile has 41 deals worth US$31.1bn, and Mexico has 67 deals worth US$20.1bn.
Even with the World Cup, political uncertainty, an oil crisis and corruption scandals, foreign investors have continued to make high investments in Latin America this year. There were 264 deals worth US$46.7bn where both bidder and target were Latin American-based companies, while there were 227 deals worth US$77.8bn with foreign-based bidders and LatAm targets in YTD. The same scenario can be found during the same period in 2013, when 342 deals worth US$44.9bn had bidder and target in LatAm, while 244 deals worth US$31.6bn were LatAm targets with foreign investors. In 2012, there were 345 deals worth US$47.2bn with a LatAm bidder and target, while there were 277 deals worth US$58.5bn with foreign investors. While in 2014 foreign investors were involved in 18% fewer transactions than in 2013, the total deal value increased by 33%, which can only mean the Latin American market is becoming more valuable in the world’s view.
Overall, 2014 has seen an increase in the deal value of transactions. In the year-to-date (YTD) there were 475 deals announced worth US$123.7bn, while 2013 saw 660 deals worth US$88.3bn. Thus, even with a decrease of 28% in the number of announced deals, there was a 40% rise in the total deal value.
Monthly M&A Insider | December | 07
TOP DEALS
LATIN AMERICA
TOP 10 LATIN AMERICAN ANNOUNCED DEALS OF THE MONTH (NOV-14)Announced Bidder company Target company Target dominant
sectorSeller company Exit multiples (x) Bid premia
1-day before
Deal value
(US$m) Revenue EBITDA P/E
19-Nov-14 Cielo SA Banco do Brasil SA (Credit and Debit cards operations within Arranjo Ourocard) (70% stake)
Financial Services Banco do Brasil SA - - - - 3,117
07-Nov-14 AT&T Inc Grupo Iusacell TMT Grupo Salinas - - - - 2,500
20-Nov-14 Brookfield Renewable Energy Partners LP
Energisa SA (488 MW multi-technology renewable portfolio)
Energy, Mining & Utilities
Energisa SA - - - - 935
27-Nov-14 Grupo Nutresa SA Hamburguesas El Corral Leisure - - - - - 392
06-Nov-14 Mitsui & Co Ltd Odebrecht Transport Participacoes SA (Railway Assets) (40% stake)
Construction Odebrecht Transport Participacoes SA
- - - - 200
20-Nov-14 JBS Aves Ltda Grupo Big Frango Consumer - 0.4 - - - 166
27-Nov-14 Grana y Montero SAA Morelco SA (70% stake) Construction - - - - - 78
03-Nov-14 Univar Brasil Ltda D'Altomare Quimica Ltda Business Services - - - - - 43
28-Nov-14 Sistema Educacional Brasileiro SA
Colegio GEO; Centro de Ensino Candanguinho; and Escola do Amanha
Business Services - - - - - 40
12-Nov-14 Watt's Alimentos SA Agricola Frutos del Maipo Limitada Consumer - 0.6 - - - 39
Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being Latin America Data correct as of 05-Dec-14
Source: Mergermarket
TREND GRAPHS
LATIN AMERICA Monthly M&A Insider | December | 08
LATIN AMERICAN M&A QUARTERLY TREND
LATIN AMERICAN M&A ANNUAL TREND
LATIN AMERICAN M&A QUARTERLY PRIVATE EQUITY TREND
LATIN AMERICAN M&A ANNUAL PRIVATE EQUITY TREND
Num
ber of deals
0
20
40
60
80
100
120
140
160
180
YTD 2014*201320122011201020092008
Total value Mid-market value Total volume Mid-market volume
Valu
e (U
S$bn
)
0
100
200
300
400
500
600
700
800
Num
ber of deals
0
2,000
4,000
6,000
8,000
10,000
12,000
YTD 2014*201320122011201020092008
Valu
e (U
S$m
)
Buyout value Exit value Buyout volume Exit volume
0
10
20
30
40
50
60
70
Valu
e (U
S$m
)
Num
ber of deals
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Q414*
Q314
Q214
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Buyout value Exit value Buyout volume Exit volume
0
5
10
15
20
25
30
Valu
e (U
S$bn
)
Num
ber of deals
0
10
20
30
40
50
60
70
Q414*
Q314
Q214
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Total value Mid-market value Total volume Mid-market volume
0
50
100
150
200
250
LATIN AMERICAN M&A SECTOR BREAKDOWN YTD 2014
VALUE VOLUME
LATIN AMERICA Monthly M&A Insider | December | 09
TREND GRAPHS
VALUE
LATIN AMERICAN M&A GEOGRAPHIC BREAKDOWN YTD 2014
VOLUME
13.7%
14.9%
18.9%3.4%
4.4%
4.6%
8.0%
11.8%
6.7%
3.2%3.2%
4.0%
1.3%1.9%
Energy, Mining & Utilities
Consumer
Industrials & Chemicals
Business Services
Financial Services
Technology
Leisure
Pharma, Medical & Biotech
Media
Transportation
Telecommunications
Agriculture
Construction
Real Estate
1.4%
0.8%1.0%
0.8%
6.4%
16.8%
0.2%3.6%
4.5%
10.5%
3.0%5.7%
39.9%
5.4%
Energy, Mining & Utilities
Consumer
Industrials & Chemicals
Business Services
Financial Services
Technology
Leisure
Pharma, Medical & Biotech
Media
Transportation
Telecommunications
Agriculture
Construction
Real Estate
0.2%
8.4%
52.7%
6.3%
5.3%
13.7%
0.8%0.8%
0.6%
8.4%
0.2%
0.2%0.4%
0.6%
0.8%0.6%
Brazil
Chile
Colombia
Costa Rica
Domincan Republic
Ecuador
El Salvador
Guatemala
Honduras
Mexico
Panama
Peru
Uruguay
Venezuala
Argentina
Bolivia
5.3%0.2%0.2%
39.4%
24.7%
0.5%
0.7% 3.5%
8.5%0.5%
16.3%
0.2%
Brazil
Chile
Colombia
Costa Rica
Ecuador
Mexico
Panama
Peru
Uruguay
Venezuala
Argentina
Bolivia
LATIN AMERICAN M&A DEAL SIZE BREAKDOWN YTD 2014
VALUE VOLUME
Return to contentsLATIN AMERICA Monthly M&A Insider | December | 10
TREND GRAPHS
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Perc
enta
ge
88.2% 85.8% 86.5% 86.7%
4.8% 6.8% 8.0%6.1% 5.7%
5.2%5.3%
6.6%5.5% 6.6%
1.2% 1.8% 2.0% 1.1% 0.7%0.6% 0.3% 1.2% 1.1%0.9%0.8% 0.3%
86.4%
5.9%
6.8%2.1%
83.3%
5.9%
7.6%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
82.2%
0
10
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Perc
enta
ge
30.3%
9.2%
39.2%28.6%
21.8%
9.9% 10.1%
7.5%
9.6%
10.3%13.8%
25.1%36.6%
24.7%
28.5%
33.4%
20.1%
29.3%
19.0%
18.2%
14.3%
14.6% 14.8% 14.4% 16.7%
16.2%
45.4%
17.2%
21.2%8.4%
23.3%
32.6%
25.6%
10.1%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
Monthly M&A Insider | December | 11
A MERGERMARKET M&A REPORT ON
NORTH AMERICA
The top deal for the month was Actavis’ US$63.1bn acquisition of Allergan as the white knight defending Allergan from Valeant Pharmaceuticals’ hostile bid in the Pharma, Medical & Biotech sector. Allergan, most notably the owner of Botox, initially attempted to discredit Valeant’s business model in an effort to stave off the takeover, casting doubt on the company’s performance, and tried rushing a deal with Salix to stop approaches from Valeant; however, the deal never worked out due to Salix’s accounting issues.
The US$219-a-share cash-and-stock offer from Actavis is a tax inversion and means fewer cuts to research and development for Allergan – US$400m compared to Valeant’s US$900m – and also surpasses the US$185-a-share offered by Valeant. This month brought the Pharma, Medical & Biotech sector to US$220.3bn YTD with 448 deals, representing a 15.8% market share by value and a 9.3% share by volume, the second highest value sector behind Energy, Mining & Utilities.
Meanwhile in the Energy, Mining & Utilities sector, Halliburton Company’s US$38bn acquisition of Baker Hughes Incorporated was the second highest deal for the month of November, as an effort to compete with industry leader Schlumberger. However, the market reaction to the deal has been very mixed, with critics
citing numerous reasons that the deal may not work out in the long run, among which are worldwide antitrust concerns as both companies have been fined by the Department of Justice and the Securities and Exchange Commission for violating the Foreign Corrupt Practices Act, a drop in stock prices post-announcement for both companies indicating concerned investors, and the combined entity having to play catch up in order to compete globally with Schlumberger despite gains in the Americas due to Halliburton’s already well-established presence domestically.
Still others maintain that while short-term returns will not be as evident, Halliburton should profit over the long run by expanding its portfolio of products and services while growing its geographic reach alongside cost synergies. Reportedly the combined entity would hold 36% of the pressure pumping market, 48% of the completions equipment and services market and 49% of the market for cementing services. The Energy, Mining & Utilities sector is still holding on to the top spot by value with 628 deals announced YTD collectively valued at US$343.5bn, almost a quarter of market share by value and 13% by volume. The sector will most likely continue to see more deals and consolidations due to constant oil prices signaling an increasingly stable domestic economy.
North American M&A value two months into the fourth quarter finished with a total of 701 deals worth US$248.7bn, a large increase from last month due mostly to two megadeals in the month of November. Buyouts for the quarter so far amounted to US$16.7bn with 123 deals announced while there were 137 exits collectively worth US$25bn. Interestingly enough, the Telecommunications sector had the highest average deal size at a whopping US$4.3bn, with only 37 deals announced in the year-to-date (YTD).
Monthly M&A Insider | December | 12
TOP DEALS
NORTH AMERICA
TOP 10 NORTH AMERICAN ANNOUNCED DEALS OF THE MONTH (NOV-14)Announced Bidder company Target company Target dominant
sectorSeller company Exit multiples (x) Bid premia
1-day before
Deal value
(US$m) Revenue EBITDA P/E
17-Nov-14 Actavis plc Allergan Inc Pharma, Medical & Biotech
- 10.0 30.6 52.1 10.2% 63,143
17-Nov-14 Halliburton Company Baker Hughes Incorporated
Energy, Mining & Utilities
- 1.7 10.4 31.8 31.3% 38,000
03-Nov-14 Laboratory Corporation of America Holdings
Covance Inc Pharma, Medical & Biotech
- 2.3 16.2 33.4 31.6% 5,584
03-Nov-14 Publicis Groupe SA Sapient Corporation Business Services
- 2.5 20.2 46.3 44.3% 3,239
13-Nov-14 Berkshire Hathaway Inc Duracell International Inc Industrials & Chemicals
Procter & Gamble Company - 4.5 - - 3,000
12-Nov-14 BB&T Corporation Susquehanna Bancshares Inc
Financial Services
- - - 14.9 38.9% 2,492
20-Nov-14 Bohai Leasing Co Ltd Cronos Ltd (80% stake) Transportation A group of investors led by Kelso & Company
6.0 10.3 11.6 - 2,393
17-Nov-14 SunEdison Inc; and TerraForm Power Inc
First Wind Holdings Inc Energy, Mining & Utilities
- - - - - 1,900
19-Nov-14 Colony Financial Inc Cobalt Capital Partners Financial Services
- - - - - 1,600
07-Nov-14 Advent International Corporation; and Avista Capital Partners LP
Kremers Urban Pharmaceuticals Inc
Pharma, Medical & Biotech
UCB SA - - - - 1,525
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-Dec-14
Source: Mergermarket
TREND GRAPHS
NORTH AMERICA Monthly M&A Insider | December | 13
NORTH AMERICAN M&A QUARTERLY TREND
NORTH AMERICAN M&A ANNUAL TREND
NORTH AMERICAN M&A QUARTERLY PRIVATE EQUITY TREND
NORTH AMERICAN M&A ANNUAL PRIVATE EQUITY TREND
Valu
e (U
S$bn
)
Num
ber of deals
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
YTD 2014*201320122011201020092008
Total value Mid-market value Total volume Mid-market volume
0
1,000
2,000
3,000
4,000
5,000
6,000
Valu
e (U
S$bn
)
Num
ber of deals
0
50
100
150
200
250
300
350
400
450
500
YTD 2014*201320122011201020092008
Buyout value Exit value Buyout volume Exit volume
0
200
400
600
800
1,000
1,200
Valu
e (U
S$bn
)
Num
ber of deals
0
50
100
150
200
250
Q414*
Q314
Q214
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Buyout value Exit value Buyout volume Exit volume
0
50
100
150
200
250
300
350
Valu
e (U
S$bn
)
Num
ber of deals
0
100
200
300
400
500
600
Q414*
Q314
Q214
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Total value Mid-market value Total volume Mid-market volume
0
200
400
600
800
1,000
1,200
1,400
1,600
Monthly M&A Insider | December | 14NORTH AMERICA
NORTH AMERICAN M&A SECTOR BREAKDOWN YTD 2014
VALUE VOLUME
NORTH AMERICAN M&A DEAL SIZE BREAKDOWN YTD 2014
VALUE VOLUME
TREND GRAPHS
Return to contents
75
80
85
90
95
100
YTD 2014*201320122011201020092008
Perc
enta
ge
90.6% 91.1%
87.6% 87.6% 87.2%
0.9% 1.0% 1.1% 1.4% 1.4%
4.1% 3.8%
5.2% 5.4%5.0%
3.7% 3.4%5.5% 4.9% 5.9%
0.7% 0.7% 0.6% 0.6%0.5%
86.4%
1.6%1.0%
5.4%
5.6%
0.7%
88.5%
1.1%
4.5%
5.3%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
0
10
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Perc
enta
ge
49.0%58.6%
31.8%37.1%
32.1%
7.3%5.5%
9.8% 9.0% 8.2%
17.4%
13.2%
27.6%20.8% 27.4%
13.9%
13.3%
17.9%
21.0%21.2%
12.4% 9.4% 12.9% 12.1% 11.1%
41.5%
7.4%
24.2%
15.9%
49.2%
16.2%
8.6%
6.7%
19.3%
11.0%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
16.8%
15.2%
13.0%
12.9%
9.3%
9.3%
8.8%
4.1%
2.9%
2.0%
0.8%1.0% 0.6%
0.2%
3.1% Industrials & Chemicals
Technology
Energy, Mining & Utilities
Business Services
Consumer
Pharma, Medical & Biotech
Financial Services
Media
Leisure
Construction
Transportation
Real Estate
Telecommunications
Agriculture
Defence
9.8%
8.0%
24.6%
5.7%10.5%
15.8%
4.8%
0.7%
2.5%1.0%
1.9%3.2%
11.5%Industrials & Chemicals
Technology
Energy, Mining & Utilities
Business Services
Consumer
Pharma, Medical & Biotech
Financial Services
Media
Leisure
Construction
Transportation
Real Estate
Telecommunications
Monthly M&A Insider | December | 15
A MERGERMARKET M&A REPORT ON
ASIA-PACIFIC
Asia-Pacific M&A activity for the month of November saw the completion of 264 deals worth US$47.7bn, an increase over October figures at 225 deals valued at US$28.5bn. Perhaps more importantly, November’s total deal activity for year-to-date (YTD) 2014 – 3,143 worth US$533bn – has surpassed that for all of last year (2013), which had 3,105 transactions worth US$456.6bn.
China-Australia FTA
China and Australia on November 17 signed a declaration of intent toward a free trade agreement. While the China-Australia Free Trade Agreement is expected to have broad effects on deal flow between the two countries, M&A activity in agriculture and infrastructure in particular stand to benefit from the accord, government sources, bankers and lawyers said in a recent Mergermarket intelligence report.
While every investment by a Chinese state-owned enterprise (SOE) will still be scrutinised by Australia’s Foreign Investment Review Board (FIRB), the agreement lifts the FIRB threshold for investments by private Chinese investors in non-sensitive sectors to AU$1.078bn from AU$248m. This is in line with FTAs signed this year with Japan and Korea that match the levels faced by US and New Zealand.
Sources within the Australian government said the FTA fosters greater confidence in China and boosts trade, precursors to increased M&A. M&A advisory services can also now be executed more efficiently, with Australian legal firms and financial service providers having greater and unprecedented access to operate in China.
Australia privatisationsA number of privatisations are in the works in Australia as state governments prepare to put power and electric assets up for sale. According to Mergermarket intelligence, advisers for the Queensland, Australia government held informal discussions with Asian investors in Hong Kong earlier this month. Discussions surrounded the sale of the state’s transmission assets. The sale of its electricity grid is expected to come to market before similar opportunities in New South Wales (NSW). Both states will put one transmission and two distribution network businesses up for sale in 2015.
These deals hinge on the governments being returned to power at state elections in the first half of the year. NSW and Queensland are both due to call elections in March next year. Transmission business Powerlink was mentioned as the first of the electricity grid assets to be sold.
Oil and gas investment
M&A in Asia-Pacific’s Energy, Mining, & Utilities sector saw the heaviest investment in November, accounting for 19% of deal value at US$9bn. YTD 2014, the sector has seen 320 deals worth US$82.2bn, the largest by deal value, come to market.
In the energy space, the region’s oil and gas sector is set to see a surge of interest from financial investors, with deals driven by increased energy needs in Southeast Asia and the retreat of traditional funding partners, such as the oil majors and independent oil companies, according to a Mergermarket intelligence report.
Private equity (PE) investment in the region’s energy assets hit highs of close to US$12bn in 2007 but sank to all-time lows of US$ 471m in 2012, according to Mergermarket data. However, last year saw nine deals worth US$1.1bn and the first 10 months of 2014 has seen seven oil-related deals valued at a combined US$846m involving purely financial buyers. While the numbers are still relatively low, this is expected to change and financial investors are showing interest in the sector and region.
TOP DEALS
Monthly M&A Insider | December | 16ASIA-PACIFIC
TOP 10 ASIA-PACIFIC ANNOUNCED DEALS OF THE MONTH (NOV-14)Announced Bidder company Target company Target dominant
sectorSeller company Exit multiples (x) Bid premia
1-day before
Deal value
(US$m)Revenue EBITDA P/E
22-Nov-14 Bestv New Media Co Ltd
Shanghai Oriental Pearl (Group) Co Ltd Media - 9.36 28.52 51.62 -4.0% 5,524
18-Nov-14 Sinotex Investment & Development Co Ltd
Essence Securities Co Ltd Financial Services
An investor group led by State Development & Investment Corporation
5.70 - 37.05 - 2,917
06-Nov-14 EQT Partners AB; and Santo Holding AG
Siemens Audiology Solutions Pharma, Medical & Biotech
Siemens AG 3.10 14.83 - - 2,681
20-Nov-14 Kotak Mahindra Bank Limited
ING Vysya Bank Ltd Financial Services
- n/a n/a 23.29 10.4% 2,570
22-Nov-14 An investor group led by Shanghai Media & Entertainment Group
Bestv New Media Co Ltd (11.69% stake) Media - 6.12 n/a 52.39 n/a 1,628
16-Nov-14 JSW Energy Limited Himachal Baspa Power Company Limited
Energy, Mining & Utilities
Jaiprakash Power Ventures Limited
6.21 - - - 1,571
12-Nov-14 Consortium for United Envirotech Ltd
United Envirotech Ltd Energy, Mining & Utilities
- 8.40 30.87 69.94 8.8% 1,352
22-Nov-14 Bestv New Media Co Ltd
Shanghai Dongfang CJ Business Co Ltd (84.16% stake); SMG Pictures Co Ltd; Shanghai Wuan Media Co Ltd; and Shanghai Wenguang Hudong TV Co Ltd (68.07% stake)
Media An investor group led by Shanghai Media & Entertainment Group
- - - - 1,248
20-Nov-14 JBS Australia Pty Limited
P&M Quality Smallgoods Pty Ltd Consumer Affinity Equity Partners; and Lederer family
- - - - 1,248
26-Nov-14 Wuhan Kaidi Electric Power Co Ltd
Sunshine Kaidi New Energy Group Co Ltd (biomass plant assets); Zhongying Changjiang International New Energy Investment Co Ltd (wind power assets); Sichuan Kaidi Hydropower Development Investment Co Ltd (87.5% stake); Zhongying Changjiang International New Energy Investment Co Ltd (hydroelectric power assets); Zhongying Changjiang International New Energy Investment Co Ltd (forest land assets); and Sunshine Kaidi New Energy Group Co Ltd (forest land assets)
Energy, Mining & Utilities
An investor group led by Sunshine Kaidi New Energy Group Co Ltd
- - - - 1,116
n/a=not applicable Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being Asia-Pacific Data correct as of 05-Dec-14
Source: Mergermarket
TREND GRAPHS
Monthly M&A Insider | December | 17
ASIA-PACIFIC M&A QUARTERLY TREND
ASIA-PACIFIC M&A ANNUAL TREND
ASIA-PACIFIC M&A QUARTERLY PRIVATE EQUITY TREND
ASIA-PACIFIC M&A ANNUAL PRIVATE EQUITY TREND
Valu
e (U
S$bn
)
Num
ber of deals
0
20
40
60
80
100
120
140
160
180
200
Q414*
Q314
Q214
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Total value Mid-market value Total volume Mid-market volume
0
100
200
300
400
500
600
700
800
900
1,000
Valu
e (U
S$bn
)
Num
ber of deals
0
100
200
300
400
500
600
YTD 2014*201320122011201020092008
Total value Mid-market value Total volume Mid-market volume
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Valu
e (U
S$bn
)
Num
ber of deals
0
10
20
30
40
50
60
70
80
90
YTD 2014*201320122011201020092008
Buyout value Exit value Buyout volume Exit volume
0
50
100
150
200
250
300
350
Valu
e (U
S$bn
)
Num
ber of deals
0
5
10
15
20
25
30
Q414*
Q314
Q214
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
0
20
40
60
80
100
120
0
20
40
60
80
100
120
Buyout value Exit value Buyout volume Exit volume
ASIA-PACIFIC
ASIA-PACIFIC M&A SECTOR BREAKDOWN YTD 2014
ASIA-PACIFIC M&A GEOGRAPHIC BREAKDOWN YTD 2014
VALUE VOLUME
VALUE VOLUME
Monthly M&A Insider | December | 18ASIA-PACIFIC
TREND GRAPHS
Industrials & Chemicals
Technology
Consumer
Energy, Mining & Utilities
Business Services
Financial Services
Pharma, Medical & Biotech
Leisure
Transportation
Media
Construction
Real Estate
Agriculture
Telecommunications
Defence
Other
8.6%
11.7%
9.5%
15.3%
5.6%10.0%
4.2%
4.5%
2.9%
7.6%
1.9%
6.5%
0.8%
2.3%
0.5%
8.1%
12.8%
20.2%
11.2%
10.2%
9.3%
7.1%
6.5%
5.6%
4.1%
3.9%
3.2%3.3%
1.6%
0.7% 0.1%
0.2%
Industrials & Chemicals
Technology
Consumer
Energy, Mining & Utilities
Business Services
Financial Services
Pharma, Medical & Biotech
Leisure
Transportation
Media
Construction
Real Estate
Agriculture
Telecommunications
Defence
Other
46.8%
11.9%
10.6%
6.3%
5.5%
5.6%
2.2%
4.4%
1.1%1.1%
4.5%China
South Korea
Australia
Hong Kong
India
Japan
Singapore
Malaysia
Papua New Guinea
Taiwan
Other
38.1%
8.4%13.6%
4.1%
10.8%
8.0%
2.8%
3.8%
0.2%1.1%
9.1%China
South Korea
Australia
Hong Kong
India
Japan
Singapore
Malaysia
Papua New Guinea
Taiwan
Other
Monthly M&A Insider | December | 19ASIA-PACIFIC
ASIA-PACIFIC M&A DEAL SIZE BREAKDOWN YTD 2014
VALUE VOLUME
TREND GRAPHS
0
10
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Perc
enta
ge
13.5%
34.6%
13.3%
15.2%
23.4%
13.4%
25.6%
21.6%
16.8%
22.6%
29.4%19.9%
13.5%23.9% 20.6%
12.0% 11.2% 11.3% 12.1% 12.3%
22.3%30.3% 26.6% 29.9% 28.6%
15.8%
17.0% 26.6%13.6% 16.6%
20.5% 22.0% 20.5% 21.9%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
21.6%
75
80
85
90
95
100
YTD 2014*201320122011201020092008
Perc
enta
ge
88.5%
0.9%
5.7%
4.5%
0.4% 0.3%0.4%
87.9% 88.7% 87.6% 88.5%
1.0% 1.4% 0.8% 0.9%
5.3%5.2%
5.9%5.6%
5.4% 4.4% 5.3% 4.7%
0.4% 0.3% 0.3%0.3%
88.0%
5.6%
0.7%
5.4%
87.5%
6.4%
0.9%
4.9%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
Return to contents
Monthly M&A Insider | December | 20
A MERGERMARKET M&A REPORT ON
EUROPE
So far in 2014, a total of 146 deals above the US$1bn mark were announced, 13 of which were done in November. At US$12.3bn, General Electric’s acquisition of the thermal & renewable power and grid business of Alstom was the largest deal of the month and the sixth-largest so far this year. It was also the biggest transaction in the Energy, Mining & Utilities sector YTD. The agreement, which is scheduled to be completed in the first half of 2015, was given the green light by France’s Ministry of Economy on November 5. The complexity of the final deal arrangement set up by General Electric reflects the concerns raised by the French Government on having a listed national champion falling into foreign hands. General Electric and Alstom will establish three fifty-fifty joint ventures in the grid, renewables, and nuclear segments. The French State will hold a 20% stake in Alstom.
The other large deal announced in November was Terra Peregrin’s tender offer for Portugal Telecom SGPS at US$7.6bn. Terra Peregrin is owned by Isabel dos Santos, the daughter of the President of Angola. Whether the bid turns out be successful remains to be seen, with news articles picked up by Mergermarket reporting that the bidder is considering withdrawing the offer in the face of opposition by the target’s main shareholders. On December 10 Portugal Telecoms’ Board of Directors (BoD) said that the €1.35 a share bid is too low and should be priced at a minimum €1.50, plus amendments to other conditions in the offer. The BoD does not however consider the bid as hostile.
With two megadeals (>US$10bn) bagged so far this year and several transactions above one billion, the Pharmaceutical, Medical & Biotech sector came in on top by value, with US$110.4bn-worth of deals signed by the end of November, accounting for a 13.8% market share. At US$45bn, Medtronic’s bid for Ireland-based Covidien in June was still the biggest transaction on record in 2014, after US-based AbbVie dropped its US$54.4bn bid for Irish pharmaceutical company Shire following the US administration’s crackdown on tax inversion arrangements.
The Consumer sector came in second place (US$95.5bn and an 11.9% market share), followed by Energy, Mining & Utilities (US$93.7bn; 11.7%) and Telecommunications (US$87.2bn; 10.9%). In terms of deal count, the Industrials & Chemicals sector was the most active for the year so far (1,088 transactions announced), with Consumer and Business Services in second (796) and third (709) positions respectively. Although it was the highest sector by value, Pharma was only seventh by volume, pointing again to the presence of a few large high value transactions propping up the total.
France, the United Kingdom and Germany were the most attractive countries for the year so far. France signed US$158.2bn-worth of deals (19.8% market share), the UK signed US$127.8bn (16%), and Germany signed US$73.9bn (9.2%). Combined together, these three countries accounted for 45% of total activity in 2014.
On the PE front, buyout’s deal flow mirrors the overall trend: the total for the year so far (US$116.8m) was already above the total for the whole of any year since 2008, when it stood at US$130.9m. As for PE exits, US$151.2m-worth of deals was agreed, which is the highest value since 2007 and likely to be by year-end the second-best since 2004.
With only one month to go, 2014 is on course to be the best year for M&A activity in Europe post-2008. A total of US$800.5bn worth of deals was signed up to the end of November year-to-date (YTD), a 37.7% increase on the same period last year (US$581.3bn) and above any year since 2008, when it stood at US$965.1bn. As a further sign of the upbeat mood, the total for the year so far was also higher than the total for the whole of 2013 (US$640.3bn). Deal count, on the other hand, stayed almost the same with a total of 5,351 transactions (YTD 2014) compared to 5,219 in YTD 2013 – a modest 2.53% increase. Narrowing it down to a single month, November 2014 was 30.87% up on November 2013 in terms of value (US$74.2bn vs. US$56.7bn), but markedly down on deal count – 361 vs. 499, a 27.7% drop.
TOP DEALS
Monthly M&A Insider | December | 21EUROPE
TOP 10 EUROPEAN ANNOUNCED DEALS OF THE MONTH (NOV-14)Announced Bidder company Target company Target dominant
sectorSeller company Exit multiples (x) Bid premia
1-day before
Deal value
(US$m)Revenue EBITDA P/E
05-Nov-14 General Electric Company Alstom SA (Thermal Power, Renewable Power and Grid business)
Energy, Mining & Utilities
Alstom SA 0.7 - - - 12,327
09-Nov-14 Terra Peregrin – Participacoes SGPS SA
Portugal Telecom SGPS SA Telecommunications - 2.1 5.2 3.7 10.9% 7,594
24-Nov-14 Onex Corporation SIG Combibloc Group AG Industrials & Chemicals
Reynolds Group Holdings Limited
2.2 8.6 - - 4,658
06-Nov-14 Perrigo Company plc Omega Pharma Belgium NV Pharma, Medical & Biotech
Omega Pharma Invest NV 2.8 - - - 4,490
06-Nov-14 Public Sector Pension Investment Board; Arcus Infrastructure Partners LLP; Brookfield Infrastructure Partners LP; and APG Group NV
TDF SAS Media Charterhouse Capital Partners LLP; TPG Capital LP; Ardian; and BPI France SA
- 9.5 - - 4,440
12-Nov-14 The Federal Agency for State Property Management
Bashneft ANK OAO (81.67% stake)
Energy, Mining & Utilities
AFK Sistema OAO 0.4 2.4 3.0 - 3,476
03-Nov-14 Yildiz Holding AS United Biscuits Limited Consumer Blackstone Group LP; and PAI Partners
2.2 15.0 - - 3,196
28-Nov-14 Macquarie Group Limited; and Wren House Infrastructure Management
E.ON Espana SL Energy, Mining & Utilities
E.ON SE - 8.3 - - 3,123
19-Nov-14 Banco Bilbao Vizcaya Argentaria SA
Turkiye Garanti Bankasi AS (14.89% stake)
Financial Services Dogus Holding AS - - 10.4 -0.8% 2,466
04-Nov-14 Greene King Plc Spirit Pub Company Plc Leisure - 1.9 9.9 20.6 9.4% 2,264
Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being Europe Data correct as of 09-Dec-14
Source: Mergermarket
TREND GRAPHS
Monthly M&A Insider | December | 22
EUROPEAN M&A QUARTERLY PRIVATE EQUITY TREND
EUROPEAN M&A QUARTERLY TREND
EUROPE
Num
ber of deals
0
100
200
300
400
500
600
Q414*
Q314
Q214
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Total value Mid-market value Total volume Mid-market volume
Valu
e (U
S$bn
)
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Valu
e (U
S$bn
)
Num
ber of deals
0
20
40
60
80
100
120
140
Q414*
Q314
Q214
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
0
50
100
150
200
250
300
350
400
450
Buyout value Exit value Buyout volume Exit volume
EUROPEAN M&A ANNUAL TREND EUROPEAN M&A ANNUAL PRIVATE EQUITY TREND
Valu
e (U
S$bn
)
Num
ber of deals
0
200
400
600
800
1,000
1,200
1,400
1,600
YTD 2014*201320122011201020092008
Total value Mid-market value Total volume Mid-market volume
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Num
ber of deals
0
50
100
150
200
250
300
350
YTD 2014*201320122011201020092008
Buyout value Exit value Buyout volume Exit volume
Valu
e (U
S$bn
)
0
200
400
600
800
1,000
1,200
1,400
1,600
Monthly M&A Insider | December | 23
VALUE VOLUME
TREND GRAPHS
EUROPE
EUROPEAN M&A GEOGRAPHIC BREAKDOWN YTD 2014
EUROPEAN M&A SECTOR BREAKDOWN YTD 2014
VALUE VOLUME
19.7%
9.2%
16.0%
6.9% 7.1%
6.0%
4.5%
3.9%
2.9%
4.0%
2.0%
2.3%
5.7%
9.8%France
UK
Germany
Republic of Ireland
Switzerland
Spain
Netherlands
Italy
Norway
Russia
Portugal
Sweden
Finland
Other
21.3%
11.9%
12.0%
1.7%
5.7%6.0%
3.6%
2.4%
4.2%
0.7%3.4%
18.0%
6.3%
2.8%
France
UK
Germany
Republic of Ireland
Switzerland
Spain
Netherlands
Italy
Norway
Russia
Portugal
Sweden
Finland
Other
5.6%
3.9%
11.8%
7.5%
13.8%11.7%
6.3%
3.8%
4.4%
3.0%
5.9%
0.9%
10.9%
0.1%
10.4%Industrials & Chemicals
Consumer
Business Services
Technology
Financial Services
Pharma, Medical & Biotech
Energy, Mining & Utilities
Leisure
Construction
Media
Transportation
Real Estate
Telecommunications
Agriculture
Defence
13.3%9.4%
14.9%
7.5%
7.1%
6.7%
4.0%
4.6%
3.9%3.7%
2.2%
1.5% 0.9%
0.2%
20.1% Industrials & Chemicals
Consumer
Business Services
Technology
Financial Services
Pharma, Medical & Biotech
Energy, Mining & Utilities
Leisure
Construction
Media
Transportation
Real Estate
Telecommunications
Agriculture
Defence
Monthly M&A Insider | December | 24EUROPE
TREND GRAPHS
EUROPEAN M&A DEAL SIZE BREAKDOWN YTD 2014
VALUE VOLUME
Return to contents
80
82
84
86
88
90
92
94
96
98
100
YTD 2014*201320122011201020092008
Perc
enta
ge
90.6%93.1% 92.1%
91.1% 91.7%
0.9% 0.9% 0.7% 0.9% 0.8%
4.2%
2.9%3.2%
3.6%3.7%
3.7%2.7% 3.7% 4.0%
3.5%
0.6%
91.1%
1.0%
3.7%
3.8%
0.4% 0.4%0.4%
91.5%
0.9%
4.2%
3.2%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
0.3% 0.3% 0.2%
0
10
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Perc
enta
ge
44.4%
8.3%
19.2%
15.0%
13.1%
33.6%28.6% 26.6%
33.3%
8.5% 9.0% 9.8% 9.6%
20.9%29.1% 29.0%
25.5%
20.7%18.7% 20.4%
18.9%
16.3% 14.6% 14.2% 12.7%
22.1%
12.3%
27.3%
25.8%
12.5%
34.3%
9.0%
24.0%
21.2%
11.5%
US$0-US$250m
US$251m-US$500m
US$501m-US$2,000m
US$2,001m-US$5,000m
>US$5,001m
Monthly M&A Insider | December | 25
A MERGERMARKET M&A REPORT ON
THE MIDDLE EAST & AFRICA
The Consumer sector is on the rise in the ME&A region, ranking at the first position among all other industries, representing 43.1% in terms of value (US$6.3bn) in November 2014 and standing at 22.2% of the total deal number for six deals out of 27. This fact is linked to the oil collapse in June 2014, which continues to decline, after nearly five years of stability. In November, multiple international deals were announced across several sectors, witnessing the world’s interest in the region’s growing consumer market. In particular, there was a trend among the companies to expand more in Africa’s consumer sector.
The most active part of the ME&A region so far this year is South Africa, reporting a quarter of the total value for US$13.3bn standing for 25% of all the transactions value, which is equivalent to 28.8% (107) of total transactions.
The top transaction of the month was between two South African companies in the Consumer sector. Steinhoff International acquired a 92.4% stake in Pepkor from Brait and entities, controlled by Christo Wiese. The transaction represents a 39.3% of November’s total value.
This acquisition will allow Steinhoff, one of the largest furniture groups, to diversify into clothing, which is also expected to meet Africa’s rising consumer demand. According to the company, the deal is also expected to fortify its position in discount retailing, which is becoming more widespread.
The second largest transaction in the Consumer sector for this month is the acquisition of a 21.7% stake of Centrale Laitiere, a Moroccan company, by Danone, a French dairy leader. The acquirer will now own a 90.8% stake in the business. The transaction is in line with Danone’s strategy to further expand its business operations in the Moroccan and North African markets.
Private equity buyouts have also accelerated this month. At the end of November, Q4 buyouts represented a total value of US$2.9bn for 11 transactions, which represent 52.5% of the year buyouts and constitute the highest value since 2007. The value of exits remains substantially the same as US$1.5bn for ten transactions which represents 26.7% of the entire year so far. It is likely to happen that at the end of December 2014, we will see a record in buyouts of the last seven years.
In November 2014, M&A activity in ME&A region achieved a US$14.6bn value for 27 transactions, showing a significant growth in terms of value (249.6%) and volume (17%) compared to October’s US$4.1bn for 23 transactions. With the number of transactions remaining practically the same in November (27 deals versus 23 in October), we can claim a record in terms of value for the end of 2014. So far, Q4 constitutes the strongest quarter of the year, standing at US$19.2bn for 57 transactions, representing a solid 36.1% of the total annual value.
TOP DEALS
Monthly M&A Insider | December | 26MIDDLE EAST & AFRICA
TOP 10 MIDDLE EASTERN & AFRICAN ANNOUNCED DEALS OF THE MONTH (NOV-14)Announced Bidder company Target company Target dominant
sectorSeller company Exit multiples (x) Bid premia
1-day before
Deal value
(US$m)Revenue EBITDA P/E
25-Nov-14 Steinhoff International Holdings Ltd
Pepkor Limited (92.34% stake)
Consumer Christo Wiese (private investor); and Brait Mauritius Limited
1,726.3 - - - 5,744
13-Nov-14 DP World Limited Economic Zones World Real Estate Ports & Free Zones World 8.0 9.9 - - 3,459
03-Nov-14 Undisclosed bidder IHS Holdings Limited Telecommunications - - - - - 2,000
10-Nov-14 Ormat Technologies Inc Ormat Industries Limited Energy, Mining & Utilities
First Israel Mezzanine Investors Ltd; and Bronicki Family
1.6 - 29.3 4.8% 857
03-Nov-14 Danone SA Centrale Laitiere (21.75% stake)
Consumer Societe Nationale D'Investissement SA
2.2 20.6 65.5 7.7% 347
28-Nov-14 AXA SA Mansard Insurance plc (77% stake)
Financial Services DEG – Deutsche Investitions – und Entwicklungsgesellschaft mbH; Proparco SA; FMO – Netherlands Development Finance Company; AfricInvest; and Development Partners International LLP
- - 30.5 91.3% 247
13-Nov-14 Microsoft Corporation Aorato Ltd Technology Accel Partners; Innovation Endeavors; and Glilot Capital Partners
- - - - 200
25-Nov-14 Carlyle Sub-Saharan Africa Fund; and Old Mutual Private Equity Fund IV
TiAuto Pty Ltd Industrials & Chemicals
Ethos Private Equity Limited - - - - 160
20-Nov-14 Ethos Fund V1 Nampak Ltd (Corrugated, Sacks and Tissue divisions)
Industrials & Chemicals
Nampak Ltd - - - - 142
02-Nov-14 Abraaj Capital Holdings Limited
Bisco Misr Consumer - 1.6 8.0 13.3 3.6% 113
Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being Middle East or Africa Data correct as of 09-Dec-14
Source: Mergermarket
TREND GRAPHS
Monthly M&A Insider | December | 27MIDDLE EAST & AFRICA
MIDDLE EASTERN & AFRICAN M&A QUARTERLY TREND
MIDDLE EASTERN & AFRICAN M&A QUARTERLY PRIVATE EQUITY TREND
MIDDLE EASTERN & AFRICAN M&A ANNUAL TREND
MIDDLE EASTERN & AFRICAN M&A ANNUAL PRIVATE EQUITY TREND
Valu
e (U
S$m
)
Num
ber of deals
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Q414*
Q314
Q214
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Total value Mid-market value Total volume Mid-market volume
0
20
40
60
80
100
120
140
160
Valu
e (U
S$bn
)
Num
ber of deals
0
10
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Total value Mid-market value Total volume Mid-market volume
0
100
200
300
400
500
600
Valu
e (U
S$bn
)
Num
ber of deals
0
2
4
6
8
10
12
14
YTD 2014*201320122011201020092008
Buyout value Exit value Buyout volume Exit volume
0
10
20
30
40
50
60
70
Valu
e (U
S$m
)
Num
ber of deals
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Q414*
Q314
Q214
Q114
Q413
Q313
Q213
Q113
Q412
Q312
Q212
Q112
Q411
Q311
Q211
Q111
Q410
Q310
Q210
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Buyout value Exit value Buyout volume Exit volume
0
5
10
15
20
25
Monthly M&A Insider | December | 28MIDDLE EAST & AFRICA
MIDDLE EASTERN & AFRICAN M&A GEOGRAPHIC BREAKDOWN YTD 2014
VALUE VOLUME
TREND GRAPHS
MIDDLE EASTERN & AFRICAN M&A SECTOR BREAKDOWN YTD 2014
VALUE VOLUME
25.1%
13.0%
0.1%
1.0%0.2%
11.0%
2.2%
1.3%
5.0%
0.9%0.9%
0.7%0.5%
0.3%0.2%
4.6%
0.7%
1.2%
1.7%
12.6%16.8%
South Africa
Israel
United Arab Emirates
Nigeria
Saudi Arabia
Kenya
Egypt
Qatar
Angola
Morocco
Tunisia
Jordan
Algeria
Ivory Coast
Botswana
Ghana
Namibia
Cameroon
Democratic Republicof Congo
Mauritius
Other
19.1%
10.5%
6.2%
4.0%
4.0%
2.7%1.9%
1.6%
1.1%1.3%
1.1%1.1%
0.8%
10.0%
29.0%
South Africa
Israel
United Arab Emirates
Nigeria
Saudi Arabia
Kenya
Egypt
Qatar
Angola
Morocco
Tunisia
Jordan
Rwanda
Algeria
Ivory Coast
Botswana
Ghana
Namibia
Cameroon
Democratic Republicof Congo
Mauritius
Other
12.9%
11.9%
14.8%
7.8%
11.3%10.5%
5.1%
4.3%
3.8%
3.2%3.2%
3.0%
3.0%
0.3%
0.3%
4.6%
Energy, Mining & Utilities
Industrials & Chemicals
Consumer
Financial Services
Technology
Business Services
Pharma, Medical & Biotech
Telecommunications
Transportation
Real Estate
Leisure
Media
Construction
Agriculture
Defence
Other
20.9%
0.8%
16.7%
5.8%
17.9%
0.8%
1.8%
0.1%
3.8%0.2%
0.6%
2.5%
17.6%
8.6%
1.9%
Energy, Mining & Utilities
Industrials & Chemicals
Consumer
Financial Services
Technology
Business Services
Pharma, Medical & Biotech
Telecommunications
Transportation
Real Estate
Leisure
Media
Construction
Agriculture
Defence
Monthly M&A Insider | December | 29MIDDLE EAST & AFRICA
MIDDLE EASTERN & AFRICAN M&A DEAL SIZE BREAKDOWN YTD 2014
VALUE VOLUME
TREND GRAPHS
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0
10
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Perc
enta
ge
42.4%47.3% 45.1% 46.7% 44.5%
5.6% 4.0%5.6% 6.1% 4.8%
11.5% 13.0%10.3% 11.3% 12.5%
36.5%32.4% 33.1% 28.7% 30.5%
4.0% 3.3% 5.9% 7.2% 7.7%
54.8%
4.3%
9.3%
25.9%
5.7%
48.7%
12.4%
27.0%
5.1%6.8%
US$0-US$14.9m
US$15m-US$100m
US$101m-US$250m
US$251m-US$500m
>US$501m
0
10
20
30
40
50
60
70
80
90
100
YTD 2014*201320122011201020092008
Perc
enta
ge
48.7%53.1%
67.8%58.2%
64.9%
13.4% 12.9% 9.0% 9.3% 8.2%
18.5%13.2%
12.5%
14.1% 13.9%
61.0%
7.8%
16.1%
14.1%
17.7% 19.2%
9.6%
17.1%12.1%
1.6% 1.1% 1.3%
72.2%
6.5%
10.0%
10.3%
US$0-US$14.9m
US$15m-US$100m
US$101m-US$250m
US$251m-US$500m
>US$501m
1.7% 0.9% 1.0% 1.0%
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Monthly M&A Insider | December | 32
MERRILL CORPORATION CONTACTS
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EXECUTIVE MANAGEMENTEd BifulkPresident Tel: +1 212 229 6563
EXECUTIVE SALESAnna ScottRegional Director, UK Tel: +44 (0) 207 422 6263
Chris BeckmannRegional Director, Germany, Switzerland & Poland Tel: +49 69 244 321 480
Martin AlamriRegional Director, Germany Tel: +49 69 244 321 471
Jérôme PottierRegional Director, France Tel: +33 1 40 06 13 12
Paul VictoorRegional Director, France Tel: +33 1 40 06 13 02
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Sean DaintyRegional Director, Europe Tel: +44 (0) 207 422 6271
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Adam PangRegional Director, Europe Tel: +44 (0) 207 422 6268
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Mary WalshRegional Director, Europe Tel: +44 (0) 207 422 6270
Jonathan HughesRegional Director, Europe Tel: +44 (0) 207 422 6267
Laura SmithAccount Manager, Europe Tel: +44 (0) 207 422 6271
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Alex GrossRegional Director, Eastern Europe & Middle East Tel: +49 69 7593 7148
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Chhin LeeRegional Director, Asia-Pacific Tel: +852 2536 6640
John PateRegional Director, Australia & New Zealand Tel: +61 (0) 499 992 400
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Ryan MacMillanRegional Director, Canada Tel: +1 416 214 2448
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John McElroneRegional Director, New York Tel: +1 212 229 6656
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Hillary PryorRegional Director, New York Tel: +1 212 367 5924
Harry Poulos Regional Director, New York Tel: +1 212 367 5924
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David YearyVice President, DataSite Life Sciences Tel: +1 415 307 4414
The following notes pertain to data contained in this publication:
Deals are included where the deal value is greater than or equal to US$5m.
Where no deal value has been disclosed, deals are included if the turnover of the target is greater than or equal to US$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.
Mid-market is defined as US$10m - US$250m.
*Q4 2014 refers to the period 01-Nov-14 to 30-Nov-14. *YTD 2014 refers to the period 01-Jan-14 to 30-Nov-14.
For a full version of the mergermarket M&A deal database inclusion and league table criteria, go to http://www.mergermarket.com/pdf/deal_criteria.pdf.
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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 qualified professional adviser. While reasonable effort has been made to ensure the accuracy of the information contained in this publication, this cannot be guaranteed and neither Merrill DataSite nor Mergermarket nor any of its subsidiaries or 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.