a mergermarket report on global m&a activity monthly m&a insider june 2010 ·...
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Monthly M&A InsIderA mergermArket report on globAl m&A Activity
JUne 2010
Monthly M&A InsIdermergermarket
GlobAl overvIew 01
AmericAs: lAtin AmericA 05
north AmericA 13
AsiA-pAcific 23
eUrope 34
middle eAst & AfricA 43
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CONTENTS
Monthly M&A Insider
global overview
01
global overview
Head of Research – elias latsis
Editor – anna Henderson
For advertising opportunities contact:
Erik Wickman
Tel: + (1) 212 6863329
Global overview: Tom Coughlan
Latin America: Mathew albert and Jennifer ruiz
North America: Jason Cozza and Jennifer ruiz
Asia-Pacific: Shunsuke okano and anita wong
Europe: Samuel Tedjasukmana and Damien Julliard
Middle East & Africa: Sylvia Traganida andMarie-laure Keyrouz
a total of 732 M&a transactions were announced in the month of May across the globe, carrying an aggregate disclosed valuation of US$130.1bn. Compared to the same time period 12 months previous, deal valuations were up by 3% on an annual basis. and while activity was driven by large-cap deal making in the United States, it is significant that the top deal of the month was actually witnessed in the australian Mining sector.
The deal in question saw Newcrest Mining, australia’s largest gold miner, acquire its closest competitor lihir gold in a transaction valued at US$8.29bn. Despite the sheer size of the deal, its most remarkable feature is arguably the fact that it was announced just two days after australian Prime Minister Kevin rudd announced plans for a 40% tax on “super profits” generated by Mining firms. a number of industry figures have claimed that the proposed legislation will adversely impact upon australia’s competitiveness and threaten future investment in the Mining sector, although this was seemingly not enough to deter Newcrest in its bid to become a leading global player.
The second largest May transaction was witnessed in the beleaguered US aviation space with United airlines and Continental announcing a US$6.19bn all-stock merger, in the process creating the world’s largest airline. according to a press release, based on 2009 financial results, the combined entity would have annual revenues of US$29bn on a pro forma basis. The deal is also expected to deliver around US$1bn in
net annual synergies by 2013, broadly comparable to the one-off costs incurred by the companies as a result of the merger. The terms of the deal involve Continental shareholders receiving 1.05 shares of United airlines common stock for each share they own, resulting in United airlines shareholders owning 55% of equity post-deal.
elsewhere, one of the more significant deals came to the market in latin america with Norwegian company Norsk Hydro acquiring the aluminium operations of vale in a transaction valued at US$4.9bn. This deal is just the latest in a number of large-cap M&a transactions announced in brazil with 2010 already seeing eight US$1bn+ deals in the market. M&a investment in brazil has historically tended to lag behind that of China, india and, to a lesser extent, russia. However, there are signs that this dynamic is beginning to change, particularly at the top end of the market. indeed, casting an eye towards M&a valuations, brazil has so far in 2010 accounted for 32% of overall activity in the emerging briC countries, up from 25% in 2009.
Clearly, brazil is an emerging force on the global stage, largely thanks to the attractiveness of assets in its Mining and Chemicals sectors. with the domestic economy predicted to grow by 5.5% in 2010, outbound activity may also pick up as cash-rich acquisitive brazilian corporates increasingly look to expand outside of their own domestic market.
by Tom Coughlan, Remark, The Mergermarket Group
a ToTal oF 732 M&a TraNSaCTioNS were aNNoUNCeD iN THe MoNTH oF May aCroSS THe globe, CarryiNg aN aggregaTe DiSCloSeD valUaTioN oF US$130.1bN. CoMPareD To THe SaMe TiMe PerioD 12 MoNTHS PrevioUS, Deal valUaTioNS were UP by 3% oN aN aNNUal baSiS. aND wHile aCTiviTy waS DriveN by large-CaP Deal MaKiNg iN THe UNiTeD STaTeS, iT iS SigNiFiCaNT THaT THe ToP Deal oF THe MoNTH waS aCTUally wiTNeSSeD iN THe aUSTraliaN MiNiNg SeCTor.
Monthly M&A Insider 02
globAl overvieW
TrEND graPHS
GlobAl M&A quArterly trend
valUE vOlUME
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$m
)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Volu
me
of d
eals
GlobAl M&A quArterly MId-MArket trend
valUE vOlUME
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$m
)
0
500
1,000
1,500
2,000
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Num
ber
of d
eals
Moving average trend line
Monthly M&A Insider 03
globAl overvieW
TrEND graPHS
GlobAl M&A seCtor breAkdown ytd 2010
valUE vOlUME
9.9%
4.5%
17%
12.7%
3.3%
1.6%
2.9%
11.1%
0.4%0.8%
10.8%
23.6%
1.5% Industrials & Chemicals
TMT
Consumer
Business Services
Energy, Mining & Utilities
Financial Services
Pharma, Medical & Biotech
Construction
Leisure
Transportation
Real Estate
Agriculture
Defence
Industrials & Chemicals
TMT
Consumer
Business Services
Financial Services
Energy, Mining & Utilities
Pharma, Medical & Biotech
Construction
Leisure
Transportation
Real Estate
Agriculture
Defence
12.4%
15.1%
18.1%
4.4%
3.7%
2.3%
2.6%
0.7%1.2%
10.5%
10.5%
11.1%
7.3%
GlobAl M&A quArterly PrIvAte equIty trend
valUE vOlUME
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$m
)
Global buyouts
Global exits
0
100
200
300
400
500
600
700
800
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Num
ber
of d
eals
Global buyouts
Global exits
Monthly M&A Insider 04
globAl overvieW
TrEND graPHS
GlobAl M&A deAl sIze breAkdown
valUE vOlUME
0
500
1,000
1,500
2,000
2,500
H12010*
H22009
H12009
H22008
H12008
H22007
H12007
H22006
H12006
H22005
H12005
H22004
H12004
> $501m
$251m-$500m
$101m-$250m
$15m-$100m
$5m-$14.9m
Valu
e (U
S$bn
)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
H12010*
H22009
H12009
H22008
H12008
H22007
H12007
H22006
H12006
H22005
H12005
H22004
H12004
> $501m
$251m-$500m
$101m-$250m
$15m-$100m
$5m-$14.9m
Value not disclosed
Num
ber
of d
eals
LATIN AM
ERICA
LATIN AMERICAA MERgERMARkET M&A REpoRT oN
Monthly M&A Insider 05
Nowhere has this been more apparent over the last month than in peru, which bustled with an untypical level of activity as five transactions worth a collective US$137m came to market – and this, in a country where a total of just 10 deals worth US$288m have been announced in the year-to-date. Consolidation in the country’s rich fisheries and fish processing industry drove deal activity with all five transactions coming to market in the niche. Takeover activity is quickening following the peruvian government’s reforms last year, which imposed caps on fishing fleets and quotas in the sector, making M&A an attractive option for firms looking to boost market share and grow top line revenue.
pesquera Exalmar, a local trade player, was the most active buyer, acquiring three assets worth US$24m, in order to increase its presence in the anchovy niche, which is benefitting from a trend of increasing prices as global demand for fishmeal – a by-product of raw anchovies – is on the rise. The pacific waters off coastal peru are home to some of the world’s most abundant anchovy stocks and the country has become a world leader in production of the fish in recent years. As such, it is not surprising that foreign players are presently active in the peruvian market with Hong kong-based acquirers, through local subsidiaries, undertaking two deals in May.
Indeed, in the largest fisheries transaction brokered in Latin America this year, pacific Andes International Holdings, a Hong kong-based holding company, acquired pesquera Alejandria for US$95m through its peruvian subsidiary CFg Investment. Elsewhere, China Fishery group, which is partially owned by pacific Andes, acquired Deep Seas Fishing, a peruvian fisher active in the anchovy market, through its local subsidiary Epesca pisco for US$18m.
Meanwhile, further south in Chile, the deal market is also witnessing fairly brisk activity with four deals worth US$655m announced in May. In the year to date, the Chilean market has seen a total of 17 transactions worth US$3.70bn announced, making it the second most active regional M&A market after Brazil, responsible for around one-tenth of overall deal flow in Latin America. Not surprisingly, the Mining sector is the most active space for dealmaking in Chile, accounting for a quarter of deal volume and value this year. Moreover, Chile has the distinction of seeing the largest Mining transaction in Latin America in 2010 in a deal that saw Japan’s Mitsubishi Corporation move to acquire a 25% stake in Compania Minera del pacifico for a total consideration of US$924m in February.
IN THE MoNTH oF MAy, LATIN AMERICA RECoRDED ITS FIRST yEAR-oN-yEAR INCREASE IN ANNoUNCED DEALS SINCE SLIppINg INTo A pATTERN oF DECLINE BACk IN oCToBER 2008. THE ToTAL MoNTHLy DEAL CoUNT AMoUNTED To 37 TRANSACTIoNS woRTH A CoMBINED US$13.34BN, Up 8.8% AND 77% CoMpARED To ACTIvITy ovER THE SAME TIMEFRAME 12 MoNTHS pREvIoUS. wHILE THE vIBRANCy oF THE REgIoN’S DEAL MARkET HAS BEEN MUCH HERALDED THIS yEAR, THE pACE oF RECovERy HAS NoT BEEN pARTICULARLy STRoNg oUTSIDE oF BRAzIL, AND To AN ExTENT, MExICo, wHERE A SpATE oF MEgA-MERgERS wERE ANNoUNCED AT THE BEgINNINg oF THE yEAR. THAT SAID, STIRRINgS oF STRoNgER DEAL ACTIvITy ARE Now BEgINNINg To EMERgE ELSEwHERE IN THE REgIoN.
06
LATIN AM
ERICA
Monthly M&A Insider
Target: Companhia de Alumina do para (61% stake)Alumina do Norte do Brasil SA (57% Stake)Aluminio Brasileiro SA (51% Stake)paragominas bauxite mine (60% Stake)
Announced: 2 May 2010
Bidder: Norsk Hydro ASA Deal value: US$4900m
Seller: vale SA Deal nature: Acquisition, Cross border, public
STRucTuRe:• Norsk Hydro ASA has signed a definitive agreement to
acquire the aluminium operations of vale SA.
• Aluminio Brasileiro SA, Alumina do Norte do Brasil SA and Companhia de Alumina do para, the Brazil based companies, are aluminium producers.
• paragominas bauxite mines, the Brazil based company, is a mine for extracting bauxite required to produce aluminium.
• vale SA, the listed Brazil based company headquartered in Rio de Janeiro, is engaged in the production of metallic and non metallic ores.
• Norsk Hydro ASA, the listed Norway based company headquartered in oslo, is a supplier of aluminium and aluminium product materials and a producer of energy from renewable resources.
TeRMS:• Norsk Hydro will acquire a 51% stake in Aluminio
Brasileiro SA; a 57% stake in Alumina do Norte do Brasil SA, a 61% stake in Companhia de Alumina do para, and a 60% stake in paragominas bauxite mines.
• As per the agreement, Norsk Hydro will pay US$405m in cash for the stakes in the aluminium producing companies.
• Norsk Hydro will also assume US$700m of the net debt of the three aluminium producers.
• In addition, the company will issue shares representing a 22% ownership of its oustanding shares to vale as a part of the consideration.
• The 60% stake in paragominas bauxite mines will be acquired by Norsk Hydro for a cash consideration of US$600m.
FInAncIng:• The transaction will be funded by Norsk Hydro through a
fully underwritten rights issue of Nok 10bn (US$1.75bn).
RATIonAle:• The acquisition is in line with Norsk Hydro’s strategy to
form a resource-rich and fully intergrated aluminium business. The company will also secure its bauxite supplies in a 100 year perspective.
PoST DeAl DeTAIlS:• vale will appoint one representative to Norsk Hydro’s
board.
• The company can not increase its interest in Norsk Hydro beyond 22%.
• Norsk Hydro’s stake in the acquired assets will increase from 34% to 91% with respect to Alunorte, and from 20% to 81% with respect to Companhia de Alumina.
• The company will also acquire the remaining 40% stake in the paragominas bauxite mines in equal tranches of 20% in 2013 and 2015, for US$200m each in cash.
• Around 3,600 vale employees will be transferred to Norsk Hydro.
exPecTeD coMPleTIon:• The transaction is expected to be completed in the fourth
quarter of 2010.
conDITIonS:• Approval of Norsk Hydro ASA shareholders.
• Regulatory approval.
• Approval of vale SA’s partners in the companies whose interests will be contributed to Norsk Hydro ASA.
DEAL oF THE MoNTH
07
LATIN AM
ERICA
Monthly M&A Insider
DEAL oF THE MoNTH
Advisers
Target/Seller Bidder
Financial - Financial Credit SuisseCitigroup Inc
legal Allen & overy LLpwikborg Rein & Co
legal ThommessenLatham & watkins LLpwiersholmSelmerveirano AdvogadosFreshfields Bruckhaus Deringer
PR - PR -
exit multiples – Y/e 31/12/2009 Premium analysis
Multiples Value ($m) offer price per share ($) -
Revenue 1.01x 1871.0 1 day before -
eBITDA 84.6x 22 1 month before -
eBIT - -179 1 day after -
earnings - 107 Pre-rumour -
08
LATIN AM
ERICA
Monthly M&A Insider
ToP 15 lATIn AMeRIcAn AnnounceD DeAlS YTD 2010Announced Status Target company Sector Bidder company Seller company exit multiples (x) Bid premia
1-day beforeDeal value
(uS$m)Revenue eBITDA P/e
13-Jan-10 p Carso global Telecom SAB de Cv
TMT America Movil SA de Cv 2.8% 19,358
11-Jan-10 p FEMSA Cerveza SA de Cv
Consumer Heineken Nv Fomento Economico Mexicano SAB de Cv
- 7,692
13-Jan-10 p Telmex Internacional SAB de Cv (39.30% stake)
TMT America Movil SA de Cv 2.6 10.6 23.6 2.2% 6,533
2-May-10 p Alumina do Norte do Brasil SA (57% stake); Aluminio Brasileiro SA (51% stake); Companhia de Alumina do para (61% stake); paragominas bauxite mine (60% stake)
Industrials & Chemicals
Norsk Hydro ASA vale SA 1.0 84.6 - 4,900
22-Jan-10 p polibutenos SA Industrias Quimicas (33.33% stake); Quattor participacoes SA (60% stake);and Unipar Comercial e Distribuidora SA
Industrials & Chemicals
Braskem SA Uniao de Industrias petroquimicas SA
- 4,238
27-Jan-10 p Bunge participacoes e Investimentos SA
Industrials & Chemicals
vale SA Bunge Limited - 3,800
14-Mar-10 p Bridas Corporation (50% stake)
Energy, Mining & Utilities
CNooC International Limited
Bridas Energy Holdings Ltd
- 3,100
28-Jan-10 p Fertilizantes Fosfatados SA (57.70% stake)
Industrials & Chemicals
vale SA The Mosaic Company; yara Brasil Fertilizantes SA
7.2 - 2,878
3-May-10 p Agre Empreendimentos Imobiliarios SA
Real Estate pDg Realty SA Empreendimentos e participacoes
13.8 1.5% 1,955
18-May-10 p plena Transmissoras SA (Seven Brazilian transmission companies)
Energy, Mining & Utilities
State grid Corporation of China
plena Transmissoras SA
- 1,721
15-Feb-10 p Comunicaciones Nextel de Mexico SA de Cv (30% stake)
TMT grupo Televisa SA de Cv NII Holdings Inc - 1,440
21-Feb-10 p Equipav SA Acucar e Alcool (50.79% stake)
Consumer Shree Renuka Sugars Limited
Equipav group - 1,184
18-May-10 p Itau Unibanco Holding SA (2.50% stake)
Financial Services
Itausa - Investimentos Itau SA
Bank of America Corporation
n/a n/a 15.0 12676.7% 1,115
12-Apr-10 p Devon Energy Corporation (gulf of Mexico Shelf Assets)
Energy, Mining & Utilities
Apache Corporation Devon Energy Corporation
- 1,050
10-May-10 p Tivit Terceirizacao de processos Servicos e Tecnologia SA
TMT Apax partners LLp patria-Banco de Negocios ; votorantim Novos Negocios Ltda
1.8 8.9 22.4 7.4% 938
C = Completed; p = pending; L = Lapsed Source: mergermarket
Top DEALS & ExpECTED DEALS
LATIN AM
ERICA
Monthly M&A Insider 09
Top deals & expecTed deals
Top 5 LATIn AMerIcAn Announced deALs of The MonTh (MAy 2010)Announced status Target company sector Bidder company seller company exit multiples (x) Bid premia
1-day beforedeal value
(us$m)revenue eBITdA p/e
2-May-10 p alumina do Norte do Brasil sa (57% stake); aluminio Brasileiro sa (51% stake); companhia de alumina do para (61% stake); paragominas bauxite mine (60% stake)
Industrials & chemicals
Norsk Hydro asa Vale sa 1.0 84.6 - 4,900
3-May-10 p agre empreendimentos Imobiliarios sa
Real estate pdG Realty sa empreendimentos e participacoes
13.8 1.5% 1,955
18-May-10 p plena Transmissoras sa (seven Brazilian transmission companies)
energy, Mining & Utilities
state Grid corporation of china
plena Transmissoras sa
- 1,721
18-May-10 p Itau Unibanco Holding sa (2.50% stake)
Financial services
Itausa - Investimentos Itau sa
Bank of america corporation
n/a n/a 15.0 12676.7% 1,115
10-May-10 p Tivit Terceirizacao de processos servicos e Tecnologia sa
TMT apax partners llp patria-Banco de Negocios ; Votorantim Novos Negocios ltda
1.8 8.9 22.4 7.4% 938
c = completed; p = pending; l = lapsed source: mergermarket
pIpeLIne of expecTed deALs situation Target
companysector potential bidder
companyfinancial adviser to bidder (B); target (T); seller (s)
seller company Market cap/ est. value ($m)
comments
auction aguas Nuevas
energy, Mining & Utilities
Macquarie capital, Morgan stanley Infrastructure or Marubeni
Banco santander Us$350m Banco santander is negotiating with a few buyers on the sale of aguas Nuevas, the chilean utility, and it is close to sealing a deal, said a source close to the situation. In February, Banco santander sent out an information memorandum on aguas Nuevas and bids were expected the following month, as previously reported by this news service. likely buyers are infrastructure funds such as Macquarie capital and Morgan stanley Infrastructure, also previously reported. a published report in december 2009 tagged Japanese conglomerate Marubeni as a potential buyer. The source could not comment on a potential deal value, but it has been reported that aguas Nuevas could be worth Us$350m. The utility has 356,000 customers and an 8.8% share of the chilean water market.santander Infrastructure Fund II, which specializes in infrastructure assets, acquired the chilean utility last year from Grupo solari.
Rumoured takeover target
express de santiago Uno
Transportation Grupo Rios Us$34m (target revenue)
It was reported that Grupo Rios, the colombia-based conglomerate, is in talks to acquire chilean mass transportation company express de santiago Uno. according to the article sources say Grupo Rios is currently restructuring the conglomerate’s management and is preparing a strategy to spur growth in chile through acquisitions. It also states 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$34m.
expected deals based on confirmed announcements by companies involved
10
LATIN AM
ERICA
Monthly M&A Insider
LEAgUE TABLES
vALUEYTD
31-May-10house Value
(uS$m)Deal count
1 Credit Suisse 46,080 16
2 Citigroup 14,382 5
3 Bank of America Merrill Lynch 11,482 10
4 Rothschild 9,671 8
5 Allen & Company 9,132 2
6 Deutsche Bank 7,899 5
7 Morgan Stanley 5,777 3
8 JpMorgan 5,312 5
9 Banco Bradesco 4,254 2
10 Hopu Investment Management 3,100 1
11 Banco Comercial portugues 2,726 3
12 HSBC Bank 2,576 5
13 Standard Chartered 2,500 1
14 Santander global Banking and Markets 1,963 3
15 Singular partners 1,955 1Source: mergermarket
voLUME
The financial adviser league tables by value and volume have been run from 01 January 2010 to 31 May 2010 and exclude lapsed and withdrawn deals. The tables cover all sectors andare based on the geography of either the target, bidder or seller being Latin America
YTD 31-May-10
house Value (uS$m)
Deal count
1 Credit Suisse 46,080 16
2 Bank of America Merrill Lynch 11,482 10
3 Rothschild 9,671 8
4 Citigroup 14,382 5
5 Deutsche Bank 7,899 5
6 JpMorgan 5,312 5
7 HSBC Bank 2,576 5
8 UBS Investment Bank 1,060 5
9 goldman Sachs 1,949 4
10 patria-Banco de Negocios 1,049 4
11 Morgan Stanley 5,777 3
12 Banco Comercial portugues 2,726 3
13 Santander global Banking and Markets 1,963 3
14 Lazard 1,462 3
15 Caixa Banco de Investimento 1,221 3Source: mergermarket
ToP 15 FInAncIAl ADVISeRS – lATIn AMeRIcA
vALUEYTD
31-May-10house Value
(uS$m)Deal count
1 Dewey & LeBoeuf 25,931 3
2 Cleary gottlieb Steen & Hamilton 15,611 6
3 Allen & overy 14,742 3
4 Freshfields Bruckhaus Deringer 12,592 2
5 Skadden Arps Slate Meagher & Flom 10,236 5
6 gibson Dunn & Crutcher 8,281 2
7 Simpson Thacher & Bartlett 7,822 4
8 Loyens & Loeff 7,692 1
9 Ulhoa Canto, Rezende e guerra - Advogados 6,678
2
10 veirano Advogados 6,181 3
11 Tozzini Freire Teixeira E Silva Advogados 5,768 7
12 Barbosa, Mussnich & Aragao 5,173 3
13= Latham & watkins 4,900 1
13= Thommessen 4,900 1
13= wikborg Rein & Co 4,900 1Source: mergermarket
voLUME
The legal adviser leue tables by value and volume have been run from 01 January 2010 to 31 May 2010 and include lapsed and withdrawn deals. The tables cover all sectors andare based on the geography of either the target, bidder or seller being Latin America
YTD 31-May-10
house Value (uS$m)
Deal count
1 pinheiro Neto Advogados 2,519 8
2 Estudio Muniz, Ramirez, perez-Taiman & olaya Abogados
461 8
3 Tozzini Freire Teixeira E Silva Advogados 5,768 7
4 Cleary gottlieb Steen & Hamilton 15,611 6
5 Machado Meyer Sendacz e opice 2,197 6
6 Skadden Arps Slate Meagher & Flom 10,236 5
7 Uria Menendez 1,802 5
8 Mattos Filho, veiga Filho, Marrey Jr. e Quiroga Advogados
1,535 5
9 Linklaters 1,284 5
10 Simpson Thacher & Bartlett 7,822 4
11 Demarest e Almeida 1,093 4
12 Dewey & LeBoeuf 25,931 3
13 Allen & overy 14,742 3
14 veirano Advogados 6,181 3
15 Barbosa, Mussnich & Aragao 5,173 3Source: mergermarket
ToP 15 legAl ADVISeRS – lATIn AMeRIcA
11
LATIN AM
ERICA
Monthly M&A Insider
TREND gRApHS
lATIn AMeRIcAn M&A quARTeRlY TRenD
vALUE voLUME
0
10,000
20,000
30,000
40,000
50,000
60,000
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$m
)
0
25
50
75
100
125
150
175
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Num
ber
of d
eals
Moving average trend line
lATIn AMeRIcAn M&A quARTeRlY MID-MARkeT TRenD
vALUE voLUME
0
1,000
2,000
3,000
4,000
5,000
6,000
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$m
)
0
20
40
60
80
100
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Num
ber
of d
eals
12
LATIN AM
ERICA
Monthly M&A Insider
TREND gRApHS
lATIn AMeRIcAn M&A SecToR BReAkDown YTD 2010
vALUE voLUME
22%
14.4%
14.1%
0.8%0.3%1.8%
0.3%
38.1%
4.9%0.6%
Energy, Mining & Utilities
Industrials & Chemicals
Consumer
Financial Services
Business Services
TMT
Pharma, Medical & Biotech
Agriculture
Leisure
Transport
Energy, Mining & Utilities
Industrials & Chemicals
Consumer
Financial Services
Business Services
TMT
Leisure
Pharma, Medical & Biotech
Agriculture
Transport
15.5%
21.6%
1%
1.4%
2.7%4.7%
5.4%
8.8%
10.8%14.2%
5.4%
8.1%
Energy, Mining & Utilities
Industrials & Chemicals
Consumer
Financial Services
Business Services
TMT
Pharma, Medical & Biotech
Agriculture
Leisure
Transport
Construction
Real Estate
lATIn AMeRIcAn M&A quARTeRlY PRIVATe equITY TRenD
vALUE voLUME
0
3
6
9
12
15
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Num
ber
of d
eals
Latin American buyouts
Latin American exits
0
500
1,000
1,500
2,000
2,500
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$m
)
Latin American buyouts
Latin American exits
NORTH
AMERICA
NORTH AMERICAA MERgERMARkET M&A REpORT ON
13Monthly M&A Insider
HIgHlIgHT:
In May, pabst Brewing Company, the fifth largest beer supplier in the US, signed a definitive agreement to be acquired by C. Dean Metropoulos, the consumer food investor that is known for managing popular brands such as Chef Boyardee, from California-based kalmanovitz Charitable Foundation, for an approximate consideration of US$250m. pabst Brewing is a supplier of more than 25 beer brands, including Schiltz and Colt 45 Malt liquor.
The US subsidiary of Rakuten, the listed Japan based internet services company, announced its acquisition of Massachusetts based Buy.com. The mid-market acquisition also had a consideration of US$250m, and reflects Rakuten’s strategy to expand its presence in the US market.
UAl Corporation’s agreement to merge with Continental Airlines for approximately US$6.2bn marked the largest North American deal in May. The airline deal, which is expected to close in the fourth quarter, could put pressure on other US airliners to merge as the industry continues to see increased consolidation.
MId-MArket deAls: On the rIse
NORTH AMERICAN MID-MARkET DEAlS CONTINUE TO BE RIFE THIS yEAR-TO-DATE. WITH A TOTAl DEAl vAlUE OF US$32BN, 2010 MID-MARkET DEAlS HAvE AlREADy SURpASSED THE vAlUE OF MID-MARkET DEAlS IN THE FIRST HAlF OF 2009, WHICH HAD AN AppROxIMATE TOTAl vAlUE OF US$28.5BN.
14
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Monthly M&A Insider
target: Continental Airlines Inc Announced: 3 May 2010
Bidder: UAl Corporation deal value: US$6.19bn
seller: deal nature: Acquisition, Cross border, public
structure:• UAl Corporation has signed a definitive agreement to be
acquired by Continental Airlines.
• UAl Corporation and Continental Airlines, the US based companies, are airline operators.
• Continental, a US based company headquartered in Houston, Tx, is the world’s fifth largest airline.
• UAl, a US based company headquartered in Chicago, Il, is a holding company engaged in airline-related activities, its principal operating subsidiary being United Air lines.
terMs:• 1.05 shares of UAUA per share of CAl.
• This represents a value of US$22.68 for each CAl share.
• The offer provides a premium of 1.48% based on CAl’s closing share price on 30 April 2010 of US$22.35 and a discount of 2.45% based on the pre rumor closing share price on 20 April 2010 of US$23.25.
• The implied equity value of the transaction is approx. US$3.2bn.
• If a superior offer were to emerge for CAl, the company would be required to give UAUA at least 5 business days to make adjustments to its current offer before CAl’S board of directors could effect a change of recommendation of the deal.
rAtIOnAle:• The merger is expected to see targeted annual net
synergies of US$1.0 to $1.2bn. Approximately 75% of the synergies are expected to be achieved in the second year, with full run-rate expected to be achieved in year three.
expected cOMpletIOn:
• The transaction is expected to close in the fourth quarter of 2010.
cOndItIOns:• HSR (USA)
• EC (Europe)
• FAA (USA)
• DOT (USA)
• CAl EgM
• UAUA EgM
DEAl OF THE MONTH
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Monthly M&A Insider
DEAL OF THE MONTH
Exit multiples – Y/E 31/12/2009 Premium analysis
Multiples Value ($m) Offer price per share ($) 22.68
Revenue 0.5x 12,586 1 day before 22.35
EBITDA 17.8x 348 1 month before 22.08
EBIT - -146 1 day after 20.53
Earnings - -282 Pre-rumour 23.25
Advisers
Target/Seller Bidder
Financial Morgan StanleyLazardUBS Investment Bank
Financial Goldman SachsJPMorgan
Legal Gibson Dunn & Crutcher (Advising Morgan Stanley, Lazard)Jones DayBlake Cassels & GraydonVinson & ElkinsFreshfields Bruckhaus Deringer
Legal Cravath Swaine & Moore Fried Frank Harris Shriver & Jacobson (Advising Goldman Sachs, JPMorgan)Howrey
PR PR
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Monthly M&A Insider
tOp 15 nOrth AMerIcAn AnnOunced deAls FOr Ytd 31 MAY 2010 Announced status target company sector Bidder company seller company exit multiples (x) Bid premia
1-day beforedeal value
(us$m)revenue eBItdA p/e
22-Apr-10 p Qwest Communications International Inc
TMT Centurylink 1.8 5.2 15.9 15.0% 22,216
8-Mar-10 p American life Insurance Company
Financial Services
Metlife Inc American International group Inc
n/a n/a - 15,544
25-Feb-10 p Coca-Cola Enterprises Inc (North American operations)
Consumer The Coca-Cola Company
Coca-Cola Enterprises Inc
- 12,200
21-Feb-10 p Smith International Inc Energy, Mining & Utilities
Schlumberger limited
1.5 12.7 67.4 18.1% 12,198
19-Jan-10 p The Williams Companies Inc (certain gas pipeline and domestic midstream businesses)
Energy, Mining & Utilities
Williams partners lp
The Williams Companies Inc
- 11,750
11-Feb-10 p Allegheny Energy Inc Energy, Mining & Utilities
FirstEnergy Corp 2.6 7.4 12.0 31.6% 8,899
9-Mar-10 p Intervet/Schering-plough Animal Health;and Merial limited
pharma, Medical & Biotech
Sanofi-Aventis SA/Merck & Co Inc Jv
Merck & Co Inc; and Sanofi-Aventis SA
- 8,250
28-Apr-10 p E.ON US llC Energy, Mining & Utilities
ppl Corporation E.ON Ag - 7,625
11-Mar-10 p Devon Energy Corporation (Assets in the deepwater gulf of Mexico, Brazil and Azerbaijan)
Energy, Mining & Utilities
Bp plc Devon Energy Corporation
- 7,000
28-Feb-10 p Millipore Corporation pharma, Medical & Biotech
Merck kgaA 4.1 16.3 34.0 13.3% 6,760
11-Feb-10 p Airgas Inc Industrials & Chemicals
Air products & Chemicals Inc
1.5 8.8 19.2 -2.1% 6,544
3-May-10 p Continental Airlines Inc Transportation UAl Corporation 0.492 17.7925 1.5% 6,192
12-Apr-10 p Syncrude Canada ltd (9.03% stake)
Energy, Mining & Utilities
Sinopec International petroleum Exploration and production Corporation
Conocophillips Company
- 4,650
15-Feb-10 l Terra Industries Inc Industrials & Chemicals
yara International ASA
2.7 10.4 26.9 23.6% 4,204
15-Apr-10 p Mariner Energy Inc Energy, Mining & Utilities
Apache Corporation
4.1 6.7 7.8 44.9% 3,854
5-Jan-10 C kraft Foods (frozen pizza business)
Consumer Nestle SA kraft Foods Inc 1.8 12.5 - 3,700
C = Completed; p = pending; l = lapsed Source: mergermarket
TOp DEAlS & ExpECTED DEAlS
17
NORTH
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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 (us$m)
comments
Expected Deal Novell Inc TMT Elliott Associates
(T)JpMorgan 2,084 Elliott Associates, l.p. (together with funds under common management), a significant institutional stockholder of Novell, Inc., offered to purchase the entire company for US$5.75 per share in cash, which implies an enterprise value net of cash of US$1.0bn. The firm sent a letter to the Board of Directors of the Company explaining its offer.
Expected Deal Dollar Thrifty Automotive group
Industrials & Chemicals
Avis Budget group, Inc
(B)Citigroup 1,281 Avis Budget group would like to make a substantially higher offer to acquire Dollar Thrifty. Dollar Thrifty had recently signed a definitive agreement to be acquired by Hertz for approximately US$41 per share.
Expected Deal Argon St Inc Industrials & Chemicals
Undisclosed Bidder
(T) Stone key partners
552 Argon St Inc has retained Stone key partners to assist the company in evaluating strategic alternatives, including acquisitions, mergers, sale of the company or other transactions.
Expected Deal California pizza kitchen Inc.
leisure Undisclosed Bidder
(B)Moelis & Company
439 California pizza kitchen, Inc. (CpkI) announced that its Board of Directors has authorized management to consider a wide range of financial and strategic alternatives to enhance shareholder value. The Company has engaged Moelis & Company, a global investment bank, to be its exclusive financial advisor in this review. California pizza kitchen , a US based company headquartered in lA, CA, is a casual dining restaurant chain with a particular focus on the pizza segment.
Expected Deal galleon Energy Energy, Mining & Utilities
Undisclosed Bidder
(T)Cormark Securities, gMp Securities, Macquarie Capital Markets Canada
410 galleon Energy’s (TSE: gO) financial advisors are already talking with potential buyers. galleon announced it had retained gMp Securities, Cormark and Macquarie Capital to review strategic alternatives, which will include a number of options, including an outright sale or disposal of a material portion of its assets.
Expected deals are based on confirmed announcements by companies involved.
pIpelIne OF nOrth AMerIcAn expected deAls
tOp 5 nOrth AMerIcAn AnnOunced deAls OF the MOnth (MAY 2010) Announced status target company sector Bidder company seller company exit multiples (x) Bid premia
1-day before
deal value
(us$m)revenue eBItdA p/e
3-May-10 p Continental Airlines Transportation UAl Corporation 0.5 17.8 1.5% 6,192
4-May-10 p Interactive Data Corporation
Business Services Interactive Data Consortium
4.2 11.6 23.0 2.6% 3,159
17-May-10 p psychiatric Solutions Inc pharma, Medical & Biotech
Universal Health Inc 1.7 9.9 1.6 3.4% 3,083
21-May-10 p Michael Foods Inc (80%) Consumer gS Capital partners Thomas H lee partners
1.1 7.8 17.3 - 1,460
24-May-10 p Sterling Commerce TMT IBM Corporation - 1,400C = Completed; p = pending; l = lapsed Source: mergermarket
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Monthly M&A Insider
lEAgUE TABlES
vAlUEWYtd
31-May-10house Value
(us$m)deal count
1 goldman Sachs 121,775 60
2 Barclays Capital 90,951 42
3 Morgan Stanley 84,010 51
4 Deutsche Bank 83,961 39
5 JpMorgan 77,986 45
6 Credit Suisse 77,676 52
7 Bank of America Merrill lynch 71,955 49
8 lazard 55,886 32
9 Citigroup Inc 53,060 28
10 UBS Investment Bank 43,487 33
11 Evercore partners Inc 35,833 8
12 perella Weinberg partners 33,876 8
13 Blackstone group Holdings 29,479 10
14 HSBC Bank 17,847 8
15 greenhill & Co 16,302 10
16 Allen & Company 15,292 5
17 Tudor, pickering, Holt & Co 14,712 6
18 RBC Capital Markets 13,084 30
19 Rothschild 12,011 31
20 Scotia Capital 9,640 8Source: mergermarket
vOlUME
The financial adviser league tables by value and volume have been run from 01 January 2010 to 31 May 2010 and exclude lapsed and withdrawn deals. The tables cover all sectors andare based on the geography of either the target, bidder or seller being USA and Canada
Ytd 31-May-10
house Value (us$m)
deal count
1 goldman Sachs 121,775 60
2 Credit Suisse 77,676 52
3 Morgan Stanley 84,010 51
4 Bank of America Merrill lynch 71,955 49
5 JpMorgan 77,986 45
6 Barclays Capital 90,951 42
7 Deutsche Bank 83,961 39
8 UBS Investment Bank 43,487 33
9 lazard 55,886 32
10 Rothschild 12,011 31
11 RBC Capital Markets 13,084 30
12 Citigroup 53,060 28
13 Jefferies & Company 9,251 28
14 TD Securities 7,042 23
15 Houlihan lokey 5,534 23
16 CIBC World Markets 4,239 18
17 lincoln International 460 16
18 Macquarie group 2,789 15
19 Raymond James & Associates 1,753 15
20 Harris Williams & Co 227 15
Source: mergermarket
tOp 20 FInAncIAl AdVIsers – nOrth AMerIcA
vAlUEYtd
31-May-10house Value
(us$m)deal count
1 Simpson Thacher & Bartlett 125,616 52
2 Cleary gottlieb Steen & Hamilton 85,592 28
3 Sullivan & Cromwell 81,584 36
4 Skadden Arps Slate Meagher & Flom 78,391 41
5 Weil gotshal & Manges 76,683 38
6 Wachtell, lipton, Rosen & katz 74,881 27
7 Cravath Swaine & Moore 66,466 19
8 latham & Watkins 65,895 43
9 Debevoise & plimpton 64,133 14
10 Dewey & leBoeuf 60,747 36
11 Davis polk & Wardwell 54,880 24
12 Shearman & Sterling 48,205 30
13 Blake, Cassels & graydon 43,574 37
14 Baker Botts 41,101 19
15 Herbert Smith/gleiss lutz/Stibbe 39,929 10
16 Slaughter and May 36,533 6
17 Norton Rose 35,500 5
18 Fried Frank Harris Shriver & Jacobson 32,910 15
19 Jones Day 32,188 58
20 paul Weiss Rifkind Wharton & garrison 31,001 23Source: mergermarket
vOlUME
The legal adviser league tables by value and volume have been run from 01 January 2010 to 31 May 2010 and include lapsed and withdrawn deals. The tables cover all sectors andare based on the geography of either the target, bidder or seller being USA and Canada
Ytd 31-May-10
house Value (us$m)
deal count
1 Jones Day 32,188 58
2 kirkland & Ellis 13,314 55
3 Simpson Thacher & Bartlett 125,616 52
4 DlA piper 2,950 46
5 latham & Watkins 65,895 43
6 Skadden Arps Slate Meagher & Flom 78,391 41
7 Weil gotshal & Manges 76,683 38
8 Blake, Cassels & graydon 43,574 37
9 Sullivan & Cromwell 81,584 36
10 Dewey & leBoeuf 60,747 36
11 gibson Dunn & Crutcher 30,679 34
12 Wilson Sonsini goodrich & Rosati p.C. 3,512 33
13 Shearman & Sterling 48,205 30
14 O'Melveny & Myers 17,340 30
15 Stikeman Elliott 14,411 30
16 Cleary gottlieb Steen & Hamilton 85,592 28
17 Morgan lewis & Bockius 8,724 28
18 Wachtell, lipton, Rosen & katz 74,881 27
19 Richards layton & Finger, pA 22,870 25
20 Davis polk & Wardwell 54,880 24
Source: mergermarket
tOp 20 legAl AdVIsers – nOrth AMerIcA
19
NORTH
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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 2010 to 31 May 2010 and exclude lapsed and withdrawn deals
ActIVItY tABle OF prIVAte equItY FIrMs On nOrth AMerIcAn BuYOuts
vAlUE
Ytd 31-May-10
house Value (us$m)
deal count
1 kohlberg kravis Roberts & Co lp 4,700 1
2 Apax partners llp 3,009 1
3 Thomas H lee partners lp 2,560 2
4 Bridgepoint Capital limited 1,544 1
5 The Carlyle group llC 1,440 3Source: mergermarket
vOlUME
The private equity exit activity tables by value and volume are based on private equity firms advising the vendor on exit deals where the dominant geography of the target company is USA and Canada The tables by value and volume have been run from 01 January 2010 to 31 May 2010 and exclude lapsed and withdrawn deals
Ytd 31-May-10
house Value (us$m)
deal count
1 Denham Capital Management lp 921 5
2 Foundation Capital - 5
3 Highland Capital partners Inc 435 4
4 The Carlyle group llC 1,440 3
5 Advent International Corporation 305 3
Source: mergermarket
ActIVItY tABle OF prIVAte equItY FIrMs On nOrth AMerIcAn exIts
Ytd 31-May-10
house Value (us$m)
deal count
1 Warburg pincus 5,078 8
2 Silver lake partners 3,159 3
3 Bain Capital 3,157 7
4 Advent International 2,468 4
5 Blackstone group Holdings 2,196 4Source: mergermarket
Ytd 31-May-10
house Value (us$m)
deal count
1 Warburg pincus 5,078 8
2 Bain Capital 3,157 7
3 The Carlyle group 1,357 7
4 HIg Capital 174 7
5 Sun Capital partners 360 6
Source: mergermarket
20
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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
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$m
)
0
200
400
600
800
1,000
1,200
1,400
Q210*
Q110
Q 09
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Volu
me
of d
eals
nOrth AMerIcAn M&A quArterlY MId-MArket trend
vAlUE vOlUME
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$m
)
0
100
200
300
400
500
600
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Num
ber
of d
eals
Moving average trend line
vAlUE vOlUME
21
NORTH
AMERICA
Monthly M&A Insider
TREND gRApHS
nOrth AMerIcAn M&A sectOr BreAkdOwn Ytd 2010
vAlUE vOlUME
34%
7%
10%
7%
9%
16%
1%2%
0.21%
1%
10%
1%
2%
Industrials & Chemicals
Financial services
Business services
Consumer
Energy, Mining & Utilites
TMT
Leisure
Transportation
Pharma, Medical & Biotech
Construction
Agriculture
Real Estate
Defence
13%
12%
9%
12%
9%3%
3%1.28%
1.06%
0.98%
0.45%
15%
21%
Industrials & Chemicals
Financial services
Energy, Mining & Utilites
Pharma, Medical & Biotech
Consumer
Construction
Leisure
Transportation
Defence
Real Estate
Agriculture
TMT
Business services
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
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$m
)
North American buyouts
North American exits
0
25
50
75
100
125
150
175
200
225
250
275
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Num
ber
of d
eals
North American buyouts
North American exits
vAlUE vOlUME
22
NORTH
AMERICA
Monthly M&A Insider
TREND gRApHS
nOrth AMerIcAn M&A deAl sIze BreAkdOwn
vAlUE vOlUME
0
100
200
300
400
500
600
700
800
900
1,000
H12010*
H22009
H12009
H22008
H12008
H22007
H12007
H22006
H12006
H22005
H12005
H22004
H12004
> $501m
$251m-$500m
$101m-$250m
$15m-$100m
$5m-$14.9m
Valu
e (U
S$bn
)
0
500
1,000
1,500
2,000
2,500
3,000
H12010*
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
ASIA-PAcIfIc
A mergermArket m&A report on
Monthly M&A Insider 23
ASIA-pAcIfIc
prudential had been in talks with American International group Inc (AIg), the listed US based insurance provider, to acquire AIA group since early 2009. prudential, whose shareholders believed that the deal was overpriced, had proposed a US$5bn cut and lowered the offer to US$30.375m in June 2010. they began having difficulties when AIg claimed that the lower price for its Asian insurance business would not be acceptable. consequently, prudential announced its termination of the agreement after AIg insisted on adhering to the original terms of its agreement with prudential. prudential estimated the cost of the failed AIA transaction at approximately £450m, which includes a break-up fee of £152.6m.
prudential launched a US$21bn rights issue to finance the acquisition of AIA. Investors expressed concern about the deal price, with the extensive expansion into Asia creating one of the major sticking points. “the size of prudential was just so small that the amount of money that they had to borrow was greater than their market cap,” said former AIg head maurice “Hank” greenberg.
AIg is expected to raise funds in order to repay a US$182.3bn government bailout that the company received two years ago, and they are expected to embark on the original plan to list AIA group in Hong kong. However, there are still doubts whether an Ipo could obtain the same valuation as offered by prudential.
JApAn mUllS lower corporAte tAx
According to the report released by the ministry of economy, trade and Industry, Japan is now considering to lower its corporate tax to match the standard in Asia in a hope to invite the foreign investment inflow and to stimulate the corporate activity in Japan.
while many countries actively lowered the corporate tax in the past decade, Japan has maintained its high level of tax. the report points out that the Japanese tax is approximately 15% higher than the Asian average of 25% or eU average of 27%. the gap in tax rates has encouraged some firms to relocate their headquarters away from Japan, and at the same time discouraged overseas companies from setting up companies. the ministry hopes a change in the tax system will lead to more investment in the domestic market.
In past years, Japanese companies sought acquisitions abroad and the number of outbound deals was over 100 each year. conversely, inbound activities were slow with an average of 30 deals annually. Between 2003 and 2009, Japanese companies spent approximately US$100bn more on outbound acquisition than overseas companies used on inbound transactions, according to the mergermarket data. while the tax cannot be the only cause of a lack in inbound investment, it is likely the high corporate tax does not aid the cause of making Japanese companies more attractive.
nevertheless, there is no consensus among the new government about the tax policy. while the minister of economy supports the report and argues that lower corporate tax should begin next year, the new prime minister is reported to be skeptical of its effect on corporate activities.
PrudentIAl/AIA deAl lAPses
on 3 JUne 2010, prUdentIAl plc, tHe lISted Uk BASed fInAncIAl ServIceS provIder, AnnoUnced tHAt ItS US$35Bn BId for AmerIcAn InternAtIonAl ASSUrAnce compAny lImIted (AIA groUp) HAS collApSed. tHe AcqUISItIon woUld HAve mAde prUdentIAl tHe lArgeSt foreIgn InSUrer In ASIA And gIven prUdentIAl ABoUt 30 mIllIon cUStomerS In ASIA.
ASIA PAcIfIc
Monthly M&A Insider 24
target: lihir gold limited Announced: 04 may 2010
Bidder: newcrest mining limited deal value: US$8.29bn
seller: deal nature: recommended
• newcrest mining limited, the listed largest gold miner in Australia, has agreed to acquire lihir gold limited, a smaller listed domestic counterpart, via a scrip and cash scheme of arrangement.
terMs:• 0.111 newcrest shares plus A$0.225 cash will be
exchanged for each lihir share. It represents an implied offer price of A$3.87 per lihir share (based on newcrest closing price of A$32.82 on 31 mar 10, prior to the pre-announcement day).
• the offer price presents a premium of 27.7% over the closing price of A$3.03 on 31 mar 2010, last trading day prior to the pre-announcement day.
FInAncIng• the maximum cash consideration is A$533m (USd 491m)
based on the cash component of A$0.225 per lihir share.
• newcrest will issue 263.19m of new shares based on the share component of 0.111 newcrest shares per lihir share, representing a 35% dilution in newcrest.
BAckground:• on 4 may 2010, newcrest mining announced a revised
offer of 0.1186 newcrest shares plus A$0.225 cash per lihir share. It represents an implied offer price of A$4.03 per lihir share (based on newcrest closing price of A$32.06 on 3 may 10, the last trading day prior to the formal announcement).
revIsed oFFer:• the revised offer on 4 may represents a premium of 9.75%
over the closing price of A$3.67 on 3 may 2010, the last trading day prior to the formal announcement.
• the new offer also implies a premium of 4.08% over the previous indicative proposal from newcrest mining on 1 mar 2010.
• the revised total cash consideration will range from A$522m to A$1.0bn, subject to scale back on a pro-rata basis if required.
rAtIonAle:• the merger is expected to create a world-class
portfolio of long life, high margin gold assets, increase geographical and asset diversification and improve newcrest mining’s financial strength.
Post deAl detAIl:• Upon completion of the scheme, lihir shareholders will
hold approximately 35.5% to 36.8% of the merged entity.
condItIons:• Approval from lihir Board of the scheme of arrangement
• Approval from the foreign Investment review Board obtained
• Approval from the Australian competition and consumer commission
• Approval from lihir shareholders at egm (min 75% votes req)
deAl of tHe montH
25
ASIA PAcIfIc
Monthly M&A Insider
deAl of tHe montH
Advisers
target/seller Bidder
Financial macquarie group greenhill caliburn
Financial lazardBank of America merrill lynch
legal Blake dawson legal Sidley Austin llp Allens Arthur robinson
Pr Pr kreab gavin Anderson
Mergermarket/dealreporter Intelligence
22-April-10 lihir gold: talk of newmont interest may be overplayed; rival bids from north American majors seen as unlikely
30-April-10 lihir gold has not granted newcrest access to data room
06-May-10 lihir gold: newmont interested although wary of price tag, source says
exit multiples – Y/e 31/12/2009 Premium analysis
Multiples value ($m) offer price per share ($) 3.65
revenue 8.5x 976.49 1 day before 9.54%
eBItdA 19.9x 416.67 1 month before -0.5%
eBIt 33.0x 251.08 1 day after 7.2%
earnings 54.2x 160.47 Pre-rumour -
timetable and expected events
regulatory date completed notes
Accc Approval of the Australian competition and consumer commission, 30/45 calendar days for phase 1 decision for formal authorisation, further 60 calendar days if referred to tribunal (normally 2 to 12 weeks under informal clearance procedure)
fIrB Approval of foreign Investment regulatory Board; decision period of 30 calendar days (extra 10 calendar days for notification; 90 calendar days extendable)
offer timetable
SoA doc issued late June, from company; publication of Scheme of Arrangement Booklet registered with Australian Securities & Investments commission and filed with the Australian Securities exchange
Scheme meeting expected August; from company; reference the approval of the scheme; minimum 75% vote required
court approval reference sanction of proposed scheme of arrangement by Supreme court
effective date expected Sep, from co; ref implementation of the Scheme, normally next trading day from court approval
Settlement date normally latest 1m after effective date (as stipulated for Australian public offers)
end date 31 december 2010, from company; reference the latest legal date for the merger to be effective
company events
completion of due diligence
08-Jun-10 y completed, from company; reference the completion of due diligence inquiries by newcrest on lihir
lgl ex-egm rights late July, from company; last day to purchase lihir shares to be eligible to vote at the Scheme meeting. ex-right date 4 trading days prior to record date and record date 2 trading days prior to Scheme meeting
ncm prelim 10 results expected mid August, reference year ended 30 Jun 10
ncm ex-div expected mid September, reference estimated final dividend of A$0.15
lgl H1 results expected late August, reference 6m ended 30 Jun 10
lgl ex-div expected early november, reference estimated interim dividend of A$0.01458
ASIA PAcIfIc
Monthly M&A Insider 026
toP 15 AsIA-PAcIFIc Announced deAls For Ytd 31 MAY 2010Announced status target company sector Bidder company seller company exit multiples (x) Bid premia
1-day beforedeal value
(us$m)revenue eBItdA P/e
1-mar-10 l American International Assurance company limited
financial Services
prudential plc American International group Inc
n/a n/a 20.2 - 35,500
30-mar-10 p AxA Asia pacific Holdings (Asian businesses)
financial Services
AxA SA AxA Asia pacific Holdings limited
n/a n/a 24.7 - 8,645
4-may-10 p lihir gold limited energy, mining & Utilities
newcrest mining limited
8.5 19.9 54.2 9.5% 8,286
10-mar-10 p Shanghai pudong development Bank (20% stake)
financial Services
china mobile group guangdong co ltd
n/a n/a 11.1 -13.1% 5,831
25-Jan-10 c Jupiter telecommunications co ltd (37.8% stake)
tmt kddI corporation liberty global Inc
3.6 8.3 32.6 64.5% 4,014
21-may-10 p piramal Healthcare Solutions business
pharma, medical & Biotech
Abbott laboratories piramal Healthcare limited
8.3 - 3,720
30-mar-10 p AxA Asia pacific Holdings limited
financial Services
national Australia Bank limited
n/a n/a 21.8 1.3% 3,579
22-mar-10 p Arrow energy limited energy, mining & Utilities
consortium comprising royal dutch Shell and petrochina
36.9 7.4 10.5 -11.2% 3,352
18-may-10 p denway motors limited Industrials & chemicals
guangzhou Automobile group co ltd
62.1 (loss) 23.6 53.0% 3,293
6-may-10 p Hua xia Bank co limited (27.15% stake)
financial Services
deutsche Bank Ag; Shougang group corp; and State grid corporation of china
n/a n/a 14.9 - 3,042
17-mar-10 c Astro All Asia networks plc
tmt Astro Holdings Sdn Bhd
3.0 (loss) (loss) 20.3% 2,649
18-Jan-10 c orient overseas developments limited
real estate capitaland lmited orient overseas (International) limited
n/a n/a (loss) - 2,200
21-may-10 p Agricultural Bank of china (Undisclosed stake)
financial Services
national council for Social Security fund
n/a n/a - 2,198
12-mar-10 p Siam city Bank plc financial Services
Bank of nova Scotia; and thanachart capital public company limited
financial Institutions development fund
n/a n/a 16.9 4.8% 2,109
6-Jan-10 c San miguel corporation consumer top frontier Investment Holdings Inc
0.5 1.2 4.0 12.0% 2,014
c = completed; p = pending; l = lapsed Source: mergermarket
top deAlS & expected deAlS
ASIA PAcIfIc
Monthly M&A Insider 027
toP 5 AsIA-PAcIFIc Announced deAls oF the Month (MAY 2010)Announced status target company sector Bidder company seller company exit multiples (x) Bid premia
1-day beforedeal value
(us$m)revenue eBItdA P/e
4-may-10 p lihir gold limited energy, mining & Utilities
newcrest mining limited 8.5 19.9 54.2 9.5% 8,286
21-may-10 p piramal Healthcare Solutions business
pharma, medical & Biotech
Abbott laboratories piramal Healthcare limited
8.3 - 3,720
18-may-10 p denway motors limited
Industrials & chemicals
guangzhou Automobile group co ltd
62.1 (loss) 23.6 53.0% 3,293
6-may-10 p Hua xia Bank co limited (27.15% stake)
financial Services
deutsche Bank Ag; Shougang group corp; and State grid corporation of china
n/a n/a 14.9 - 3,042
21-may-10 p Agricultural Bank of china (Undisclosed stake)
financial Services
national council for Social Security fund
n/a n/a - 2,198
c = completed; p = pending; l = lapsed Source: mergermarket
top deAlS
28
ASIA PAcIfIc
Monthly M&A Insider
PIPelIne oF AsIA-PAcIFIc exPected deAlssituation target company sector Potential bidder
companyFinancial adviser to bidder (B); target (t); seller (s)
seller company Market cap/ est. value (us$m)
comments
expected deal
transurban group
construction canada pension plan Investment Board (cppIB); and ontario teachers’ pension plan (otpp)
lazard (t); UBS Investment Bank (t); goldman Sachs (B); Jpmorgan (B)
6,500 transurban group in november received a conditional and non-binding joint takeover proposal from cppIB and otpp. the Board then evaluated the proposal and rejected it on the original terms. the future fund Board of guardians has subsequently considered supporting the proposal by cppIB and otpp. However, transurban continues to insist a bona fide proposal is needed before talks can proceed.
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
Healthscope ltd pharma, medical & Biotech
Undisclosed bidders
1,537 on 14 may 2010, Healthscope received an indicative take private proposal from a private equity consortium for AUd 5.50 each share. on 31 may 2010, Healthscope ltd received two additional competitive proposals, both at an indicative price of AUd 5.80 per share, from undisclosed parties.
expected deal
Hunan nonferrous metals corporation
Industrials & chemicals
china minmetals corporation
china International capital corporation (B); evolution watterson Securities (t)
State-owned Assets Supervision and Administration commission of Hunan provincial people's government
817 china minmetals has announced to acquire a 51% stake in Hunan nonferrous metals with the possibility to trigger mandatory unconditional cash offer.
expected deal
Boom logistics limited
transport Archer capital 355 Boom is reported to have received highly conditional, confidential and incomplete proposal from Archer at an indicative price of 52 cents per share.
expected deal
Sigma pharmaceuticals limited
pharma, medical & Biotech
Aspen pharmacare Holdings limited
342 Sigma receives non-binding, indicative and conditional proposal from Aspen to acquire all issued share capital for an indicative price of AUd 0.60.
expected deAlS
29
ASIA PAcIfIc
Monthly M&A Insider
leAgUe tABleS
vAlUeYtd
31-May-10house value
(us$m)deal count
1 Jpmorgan 29,740 19
2 morgan Stanley 29,740 18
3 UBS Investment Bank 28,113 22
4 deutsche Bank 23,524 19
5 macquarie group 21,533 15
6 goldman Sachs 18,211 20
7 Barclays capital 16,163 8
8 nomura Holdings 15,143 6
9 Bnp paribas 14,425 5
10 Standard chartered 14,196 6
11 HSBc 13,619 8
12 Bank of America merrill lynch 13,331 10
13 credit Suisse 11,675 14
14 china International capital 11,457 7
15= global Investment House 10,700 1
15= State Bank of India 10,700 1
17 lazard 9,624 2
18 greenhill caliburn 8,377 2
19 citigroup 8,271 12
20 cImB group 6,856 13Source: mergermarket
volUme
the financial adviser league tables by value and volume have been run from 01 January 2010 to 31 may 2010 and exclude lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being Asia-pacifc excluding Japan.
Ytd 31-May-10
house value (us$m)
deal count
1 UBS Investment Bank 28,113 22
2 goldman Sachs 18,211 20
3 Jpmorgan 29,740 19
4 deutsche Bank 23,524 19
5 morgan Stanley 29,740 18
6 deloitte 6,157 16
7 macquarie group 21,533 15
8 credit Suisse 11,484 13
9 cImB group 6,856 13
10 pricewaterhousecoopers 1,652 13
11 citigroup 8,271 12
12 kpmg 3,076 12
13 Bank of America merrill lynch 13,341 10
14 rothschild 6,221 10
15 ernst & young 647 9
16 Barclays capital 16,163 8
17 HSBc 13,619 8
18 china International capital 11,457 7
19 nomura Holdings 15,143 6
20 Standard chartered 14,196 6Source: mergermarket
toP 20 FInAncIAl AdvIsers – AsIA-PAcIFIc excl JAPAn
toP 15 legAl AdvIsers – AsIA-PAcIFIc excl JAPAnvAlUe
Ytd 31-May-10
house value (us$m)
deal count
1 Herbert Smith/gleiss lutz/Stibbe 48,884 5
2 Slaughter and may 38,683 4
3 norton rose 38,029 13
4 Simpson thacher & Bartlett 37,422 6
5 cravath Swaine & moore 36,988 2
6 Sullivan & cromwell 36,077 4
7 cleary gottlieb Steen & Hamilton 35,950 3
8 debevoise & plimpton 35,922 2
9 weil gotshal & manges 35,571 2
10 davis polk & wardwell 30,765 7
11 Allens Arthur robinson 23,014 11
12 linklaters 20,270 11
13 Allen & overy 15,698 14
14 mallesons Stephen Jaques 14,762 20
15 AZB & partners 14,262 24
16 freehills 13,701 19
17 Blake dawson 10,645 12
18 Baker & mckenzie 10,283 15
19 Sidley Austin 8,661 4
20 Blake, cassels & graydon 6,692 3Source: mergermarket
volUme
the legal adviser league tables by value and volume have been run from 01 January 2010 to 31 may 2010 and include lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being Asia-pacifc excluding Japan.
Ytd 31-May-10
house value (us$m)
deal count
1 AZB & partners 14,262 24
2 mallesons Stephen Jaques 14,762 20
3 freehills 13,701 19
4 wongpartnership 3,566 19
5 Jones day 3,099 19
6 kim & chang 3,148 18
7 freshfields Bruckhaus deringer 4,963 16
8 clayton Utz 3,712 16
9 minter ellison 1,410 16
10 Baker & mckenzie 10,283 15
11 dlA piper 484 15
12 Allen & overy 15,698 14
13 clifford chance 3,219 14
14 norton rose 38,029 13
15 Allen & gledhill 3,850 13
16 Blake dawson 10,645 12
17 Allens Arthur robinson 23,014 11
18 linklaters 20,270 11
19 Skadden Arps Slate meagher & flom 5,063 10
20 king & wood 1,411 10Source: mergermarket
30
ASIA PAcIfIc
Monthly M&A Insider
leAgUe tABleS
vAlUe
Ytd 31-May-10
house value (us$m)
deal count
1 nomura Holdings 7,915 262 Jpmorgan 7,434 73 Bank of America merrill lynch 5,131 34 citigroup 4,440 45 UBS Investment Bank 4,014 16 goldman Sachs 3,671 47 lazard 3,301 28 centerview partners 3,301 19 morgan Stanley 2,543 510 mizuho financial group 1,798 2111 Sumitomo mitsui financial group 1,476 1212= deutsche Bank 1,226 112= greenhill & co 1,226 114 mitsubishi UfJ Securities 1,025 515 celfin capital 924 1
Source: mergermarket
volUme
the financial adviser league tables by value and volume have been run from 01 January 2010 to 31 may 2010 and exclude lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being Japan
Ytd 31-May-10
house value (us$m)
deal count
1 nomura Holdings 7,915 26
2 mizuho financial group 1,798 21
3 Sumitomo mitsui financial group 1,476 12
4 daiwa Securities group 465 9
5 Jpmorgan 7,434 7
6 gcA Savvian 622 7
7 morgan Stanley 2,543 5
8 mitsubishi UfJ Securities 1,025 5
9 kpmg 678 5
10 pricewaterhousecoopers 335 5
11 citigroup 4,440 4
12 goldman Sachs 3,671 4
13 Bank of America merrill lynch 5,131 3
14 rothschild 270 3
15 A.g.S. consulting 221 3Source: mergermarket
toP 15 FInAncIAl AdvIsers – JAPAn
vAlUe
Ytd 31-May-10
house value (us$m)
deal count
1 mori Hamada & matsumoto 8,082 19
2 Skadden Arps Slate meagher & flom 7,433 4
3 nishimura & Asahi 5,819 11
4 Shearman & Sterling 5,355 7
5 gibson dunn & crutcher 5,131 3
6 Anderson mori & tomotsune 4,187 10
7 latham & watkins 4,035 2
8 morrison & foerster 3,668 6
9 nagashima ohno & tsunematsu 3,487 11
10 dewey & leBoeuf 3,301 1
11 ropes & gray 1,807 2
12 tmI Associates 1,784 8
13 Simpson thacher & Bartlett 1,527 2
14 morgan lewis & Bockius 1,356 1
15 Abe, Ikubo & katayama 582 2Source: mergermarket
volUme
the legal adviser league tables by value and volume have been run from 01 January 2010 to 31 may 2010 and include lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being Japan
Ytd 31-May-10
house value (us$m)
deal count
1 mori Hamada & matsumoto 8,082 19
2 nagashima ohno & tsunematsu 5,420 14
3 nishimura & Asahi 5,819 11
4 Anderson mori & tomotsune 4,187 10
5 tmI Associates 1,784 8
6 Shearman & Sterling 5,355 7
7 morrison & foerster 3,668 6
8 kitamura & Hiraga 323 5
9 Skadden Arps Slate meagher & flom 7,433 4
10 Baker & mckenzie 278 4
11 Sato & partners 118 4
12 gibson dunn & crutcher 5,131 3
13 oh-ebashi lpc & partners 343 3
14 freshfields Bruckhaus deringer 163 3
15 cuatrecasas, goncalves pereira 7 3Source: mergermarket
toP 15 legAl AdvIsers – JAPAn
31
ASIA PAcIfIc
Monthly M&A Insider
trend grApHS
AsIA-PAcIFIc M&A quArterlY trend
vAlUe volUme
0
50,000
100,000
150,000
200000
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$m
)
0
100
200
300
400
500
600
700
800
Q2 10*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Num
ber
of d
eals
AsIA-PAcIFIc M&A quArterlY MId-MArket trend
vAlUe volUme
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q2 04
Q104
Valu
e (U
S$m
)
0
100
200
300
400
500
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Num
ber
of d
eals
moving average trend line
32
ASIA PAcIfIc
Monthly M&A Insider
trend grApHS
AsIA-PAcIFIc M&A sector BreAkdown Ytd 2010
vAlUe volUme
11.2%
14%
7.4%
15.1%27.2%
6.5%
1.4%
3%
6.8%
4%
1.6%1.7%
Industrials & Chemicals
TMT
Consumer
Energy, Mining & Utilities
Financial Services
Business Services
Pharma, Medical & Biotech
Construction
Real Estate
Transport
Leisure
Agriculture
20.4%
13.8%
11.3%
6.7%
9.4%
2.6%
10.6%
6.5%
6%
5.4%
3.7%3.7%
Industrials & Chemicals
TMT
Consumer
Energy, Mining & Utilities
Financial Services
Business Services
Pharma, Medical & Biotech
Construction
Real Estate
Transport
Leisure
Agriculture
AsIA-PAcIFIc M&A quArterlY PrIvAte equItY trend
vAlUe volUme
0
5,000
10,000
15,000
20,000
25,000
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (U
S$m
)
Asia-Pacificbuyouts
Asia-Pacificexits
0
20
40
60
80
100
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q 07
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Num
ber
of d
eals
Asia-Pacificbuyouts
Asia-Pacificexits
33
ASIA PAcIfIc
Monthly M&A Insider
trend grApHS
AsIA-PAcIFIc M&A geogrAPhIc BreAkdown Ytd 2010
vAlUe volUme
Australia
China
Hong Kong
India
Indonesia
Japan
Malaysia
Singapore
South Korea
Taiwan
Other
24.4%7.5%
8.7%
1.5%
4.7%
12.9%
2.9%
5.8%
1.2%
22.3%
8.2%
26.6%
11.1%
12.1%
14.9%
18%
4.6%
4.4%
3.9%2.4% 1.9%
China
Japan
Australia
South Korea
India
Hong Kong
Malaysia
Singapore
Indonesia
Taiwan
AsIA-PAcIFIc M&A deAl sIZe BreAkdown
vAlUe volUme
0
50
100
150
200
250
300
H12010*
H22009
H12009
H22008
H12008
H22007
H12007
H22006
H12006
H22005
H12005
H22004
H12004
> $501m
$251m-$500m
$101m-$250m
$15m-$100m
$5m-$14.9m
Valu
e (U
S$bn
)
0
300
600
900
1,200
1,500
H12010*
H22009
H12009
H22008
H12008
H22007
H12007
H22006
H12006
H22005
H12005
H22004
H12004
> $501m
$251m-$500m
$101m-$250m
$15m-$100m
$5m-$14.9m
Value not disclosed
Num
ber
of d
eals
34Monthly M&A Insider
europe
A mergermArket m&A report on
eUrope
Indeed, rising uncertainty has reflected a number of economic and political factors such as the emergence of the greek debt crisis, fears of contagion to other european states and the uncertainty surrounding the British elections. All of these factors are valid concerns, as the greek crisis continues unabated and the Uk election delivered a hung parliament and a weak mandate to the new governing coalition.
Dealmakers need even greater confidence to source transactions outside of their home markets. In europe, this is another source of concern given that cross-border transactions drive a great level of deal activity, accounting for some 60% of european m&A in Q1 2010. given the uncertainty surrounding the euro due to the turmoil in greece, this could deter some overseas companies from making firm investment commitments into the eurozone area at the moment.
recovery expecteD wIthIn the FInAncIAl ServIceS DeAl Flow throUghoUt remAInDer oF the yeAr
elsewhere, recovery in Financial Services deal flow is expected during the remainder 2010 with Spain and germany emerging as potential hot beds of activity. the potential pick up in activity has not yet materialised with deal levels remaining reasonably low across europe. Indeed, transactions in the US$500m+ range have accounted for around a tenth of total Financial Services deals announced in europe over the first five months of the year, compared to around 15% for the whole of 2009.
however, the ongoing restructuring of the european banking sector is expected to be a key force driving m&A activity going forward. As such, activity over the next few months is likely to be focused on publicly controlled banks as they seek to divest
parts of their businesses, in order to meet eU commission State Aid conditions. Beyond banking, further scale-building transactions among insurers, financial infrastructure companies and asset managers are also likely to feature prominently in the m&A landscape. the coming regulatory shake up in the asset management sector has the potential to spur deal activity.
UcItS Iv, the set of european Union directives that aim to allow collective investment schemes to operate freely throughout the eU voted last January, could also be a driver of consolidation and we may see service providers seeking to expand their footprint across europe. Further m&A activity involving private equity firms is also expected, boosted by the growing availability of debt finance, the recovery in financial services valuations and some funds’ need to invest capital pledged by lps before the financial crisis.
eU competition rulings and growing political pressure are adding further impetus to the resurgence of m&A in the german banking sector. germany offers opportunities for synergies and market development that few other countries of this size can match.
Spain is highlighted as one of the countries in which restructuring is likely to be most pronounced. Institutions are looking to consolidation and divestment to help strengthen margins and rebuild their balance sheets creating a range of opportunities for investment.
EuropEAn M&A rEMAIns low
In mAy, eUropeAn m&A ActIvIty SAw 252 trAnSActIonS collectIvely vAlUeD At €16.93Bn, the loweSt monthly volUme AnD vAlUe SInce the regIon’S DeAl mArket troUgheD In AUgUSt 2009. cleArly, m&A InveStment DepenDS on A hIgh level oF mArket conFIDence Among ceos AnD corporAte BoArDS. AnD In eUrope, A ‘perFect Storm’ oF UncertAInty hAS ArISen In recent monthS pUnctUrIng SUch conFIDence.
35
EUROPE
Monthly M&A Insider
Target: Harrods Limited Announced: 08 May 2010
Bidder: Qatar Investment Authority Deal value: €1.74bn
Seller: Mr. Mohamed Al-Fayed Deal nature: Cross-border, Private
• Qatar Holding LLC, the Qatar based investment arm of Qatar Investment Authority, the Qatari sovereign wealth fund, has acquired Harrods Limited, the UK based operator of the upper market department store Harrods, from Mohamed Al-Fayed, the UK based businessman, for a total consideration of £1.5bn (€1.76bn).
• The acquisition is in line with Qatar Holding’s strategy to acquire prestigious top-performing businesses. Harrods’ management team will be supported by Mr. Ahmad Al-Sayed, CEO of Qatar Holding. Harrods was acquired by Mr. Al-Fayed in 1985 for £615m (€912.35m). Post transaction, Mr. Al-Fayed will become the honorary Chairman of Harrods.
DEAL OF THE MONTH
Advisers
Target/Seller Bidder
Financial Lazard Financial Credit Suisse
Legal Herbert Smith/Gleiss Lutz/Stibbe Legal Latham & WatkinsLoyens & Loeff
PR Brunswick Group PR -
Exit multiples – Y/E 31/03/10 Premium analysis
Multiples Value (€m) Offer price per share (€) n/a
Revenue - - 1 day before n/a
EBITDA - - 1 month before n/a
EBIT - - 1 day after n/a
Earnings - - Pre-rumour n/a
36
europe
Monthly M&A Insider
Top 15 EuropEAn AnnouncED DEAls YTD 31 MAY 2010Announced status Target company sector Bidder company seller company Exit multiples (x) Bid premia
1-day beforeDeal value
(€m)revenue EBITDA p/E
4-Jan-10 p Alcon Inc (52% stake)
pharma, medical & Biotech
novartis Ag nestle SA 8.0 20.9 26.9 9.5% 18,247
5-Jan-10 c nk russneft oAo energy, mining & Utilities
mr. mikhail gutseriyev (private Investor)
en+ group ltd - 4,595
18-mar-10 p ratiopharm gmbh pharma, medical & Biotech
teva pharmaceutical Industries ltd
2.3 - 3,625
20-Jan-10 p Areva t&D SA Industrials & chemicals
Alstom SA; and Schneider electric SA
ArevA SA 0.6 - 3,180
22-Apr-10 p Arriva plc transportation Deutsche Bahn Ag 0.8 7.7 14.6 1.2% 2,819
8-Apr-10 p Iberia lineas Aereas de espana SA
transportation British Airways plc 0.5 0.9% 2,234
15-mar-10 c tommy hilfiger corporation
consumer phillips-van heusen corporation
Apax partners llp
1.3 7.9 - 2,200
30-Apr-10 c BSg resources (guinea) limited (51% stake)
energy, mining & Utilities
vale SA BSg resources limited
- 1,880
8-may-10 c harrods limited consumer Qatar Investment Authority
mohamed Al Fayed (private investor)
- 1,742
17-Feb-10 c Barclays plc (5.20% stake)
Financial Services
International petroleum Investment company
n/a n/a 8.9 -32.7% 1,428
23-mar-10 p vt group plc Business Services
Babcock International group plc
1.2 15.5 56.0 6.5% 1,367
29-Jan-10 c talk talk telecom group plc
tmt the carphone warehouse group plc (shareholders)
the carphone warehouse group plc
0.9 8.5 - 1,355
21-may-10 p kBl european private Bankers SA
Financial Services
the hinduja group kBc group nv n/a n/a - 1,350
28-mar-10 p volvo cars corporation
Industrials & chemicals
Zhejiang geely holding group company limited
Ford motor company
- 1,342
19-Jan-10 p cegelec SA Industrials & chemicals
vinci SA Qatari Diar real estate Investment company
- 1,291
c = completed; p = pending; l = lapsed Source: mergermarket
top DeAlS & expecteD DeAlS
37
europe
Monthly M&A Insider
top DeAlS & expecteD DeAlS
Top 5 EuropEAn AnnouncED DEAls oF ThE MonTh (MAY 2010)Announced status Target company sector Bidder company seller company Exit multiples (x) Bid premia
1-day beforeDeal value
(€m)revenue EBITDA p/E
8-may-10 c harrods limited consumer Qatar Investment Authority
mohamed Al Fayed (private investor)
- 1,742
21-may-10 p kBl european private Bankers S.A
Financial Services
the hinduja group kBc group nv n/a n/a - 1,350
19-may-10 p Sperian protection SA
Industrials & chemicals
honeywell International Inc
essilor International SA; and mr. ginette Dalloz (private Investor)
1.7 17.2 47.6 31.8% 1,112
26-may-10 p netto Foodstores limited
consumer ASDA group limited Dansk Supermarked A/S
1.1 27.9 389.2 - 904
19-may-10 p Svyazinvest telecommunication Investment JSc (25% stake)
tmt oAo rostelecom mgtS Finance SA; and oAo comstar United teleSystems
- 690
c = completed; p = pending; l = lapsed Source: mergermarket
situation Target company sector potential bidder company
Financial adviser to bidder (B); target (T); seller (s)
seller company Market cap/ est. value (€m)
comments
potential takeover target
compagnie de Saint-gobain (packaging division)
construction Bank of America merrill lynch (S); Bnp paribas (S); Jpmorgan (S)
compagnie de Saint-gobain SA
4,000 Saint gobain is still intent on eventually selling its glass packaging division, said pierre-Andre de chalendar, ceo of the French listed building construction group. chalendar will proceed with the divestiture "at the right time," he pointed out.
potential takeover target
centea nv; and Fidea
Financial Services
Deutsche Bank Ag; and AxA SA
kBc group nv 1,000 kBc group’s sale of retail banking unit centea and insurance brokerage Fidea are unlikely to start before the fourth quarter, sources close to the deal said.
potential takeover target
hansa metallwerke Ag
consumer 140 hansa metallwerke, the german bathroom fitting company, is up for sale, it is understood. the company management is reviewing its strategic options and the sale process is in early stages.
potential takeover target
Scott wilson group plc
construction 101 Scott wilson, the Uk-listed design and engineering consultancy, is in talks with two potential bidders, according to a person familiar with the situation.
note: expected deals based on confirmed announcements by companies involved
pIpElInE oF EuropEAn ExpEcTED DEAls
38
europe
Monthly M&A Insider
leAgUe tABleS
vAlUeYTD
31-May-10house Value
(€m)Deal count
1 credit Suisse 57,148 462 goldman Sachs 45,246 273 citigroup 40,883 184 Deutsche Bank 31,251 335 Jpmorgan 31,308 326 rothschild 27,071 607 Bank of America merrill lynch 20,915 168 greenhill & co 19,046 59 morgan Stanley 18,899 3210 lazard 16,869 3011 UBS Investment Bank 14,690 2512 Barclays capital 13,637 1513 pricewaterhousecoopers 8,969 4314 nomura holdings 8,948 1215 Blackstone group holdings 8,765 416 hSBc Bank 8,423 1517 evercore partners 7,432 218 macquarie group limited 7,315 719 perella weinberg partners 7,048 320 royal Bank of Scotland group 6,316 7
Source: mergermarket
volUme
the financial adviser league tables by value and volume have been run from 01 January 2010 to 31 may 2010 and exclude lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being europe.
YTD 31-May-10
house Value (€m)
Deal count
1 rothschild 27,071 60
2 credit Suisse 57,148 46
3 pricewaterhousecoopers 8,969 43
4 kpmg 3,831 40
5 Deloitte 3,196 38
6 Deutsche Bank 31,251 33
7 Jpmorgan 31,308 32
8 morgan Stanley 18,899 32
9 lazard 16,869 30
10 goldman Sachs 45,246 27
11 UBS Investment Bank 14,690 25
12 ernst & young 1,066 22
13 Dc Advisory partners 3,457 19
14 citigroup 40,883 18
15 grant thornton corporate Finance 577 17
16 global m&A 71 17
17 Bank of America merrill lynch 20,915 16
18 Bnp paribas 3,592 16
19 Barclays capital 13,637 15
20 hSBc Bank 8,423 15Source: mergermarket
Top 20 FInAncIAl ADVIsErs
vAlUeYTD
31-May-10house Value
(€m)Deal count
1 Sullivan & cromwell 59,936 12
2 cravath Swaine & moore 52,278 7
3 Simpson thacher & Bartlett 44,618 18
4 Allen & overy 40,964 61
5 weil gotshal & manges 39,713 23
6 cleary gottlieb Steen & hamilton 37,683 20
7 herbert Smith/gleiss lutz/Stibbe 36,023 26
8 Slaughter and may 31,909 17
9 norton rose 28,958 21
10 Skadden Arps Slate meagher & Flom 28,939 12
11 Blake, cassels & graydon 28,482 11
12 Freshfields Bruckhaus Deringer 28,262 44
13 Debevoise & plimpton 27,195 3
14 linklaters 26,308 60
15 Davis polk & wardwell 25,822 5
16 wachtell, lipton, rosen & katz 21,516 4
17 homburger 21,212 5
18 Dewey & leBoeuf 16,371 22
19 latham & watkins 13,531 23
20 Fried Frank harris Shriver & Jacobson 11,252 4Source: mergermarket
volUme
the legal adviser league tables by value and volume have been run from 01 January 2010 to 31 may 2010 and include lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being europe.
YTD 31-May-10
house Value (€m)
Deal count
1 Allen & overy 40,964 61
2 linklaters 26,308 60
3 Freshfields Bruckhaus Deringer 28,262 44
4 cmS 3,247 43
5 clifford chance 11,174 42
6 DlA piper 2,482 40
7 Jones Day 8,382 32
8 herbert Smith/gleiss lutz/Stibbe 36,023 26
9 weil gotshal & manges 39,713 23
10 latham & watkins 13,531 23
11 Dewey & leBoeuf 16,371 22
12 mannheimer Swartling 3,837 22
13 norton rose 28,958 21
14 hogan lovells 4,846 21
15 travers Smith 2,738 21
16 vinge 1,275 21
17 cleary gottlieb Steen & hamilton 37,683 20
18 loyens & loeff 11,152 20
19 Baker & mckenzie 6,769 20
20 garrigues 4,993 19Source: mergermarket
Top 20 lEgAl ADVIsErs
39
europe
Monthly M&A Insider
leAgUe tABleS
vAlUe
YTD 31-May-10
house Value (€m)
Deal count
1 Advent International 1,818 4
2 kohlberg kravis roberts & co 1,450 4
3 triton partners 1,133 2
4 niam AB 1,088 1
5 Bridgepoint capital 898 4
6= Bain capital 883 1
6= Berkshire partners 883 1
8 cinven 800 1
9 charterhouse capital partners 763 2
10 warburg pincus 698 4Source: mergermarket
volUme
the private equity buyout activity tables by value and volume are based on private equity firms advising the bidder on buyout deals where the dominant geography of the target company is europethe tables by value and volume have been run from 01 January 2010 to 31 may 2010 and exclude lapsed and withdrawn deals.
YTD 31-May-10
house Value (€m)
Deal count
1 hgcapital 414 6
2 Advent International 1,818 4
3 kohlberg kravis roberts & co 1,450 4
4 Bridgepoint capital 898 4
5 warburg pincus 698 4
6 Sovereign capital partners 44 4
7 procuritas 28 4
8 Bnp paribas Developpement - 4
9 Sun capital partners 141 3
10 herkules capital 19 3Source: mergermarket
AcTIVITY TABlE oF prIVATE EquITY FIrMs on EuropEAn BuYouTs
vAlUe
YTD 31-May-10
house Value (€m)
Deal count
1 Apax partners 2,200 1
2 3i group 1,133 2
3 montagu private equity 1,117 2
4 Bridgepoint capital 1,101 1
5 Astorg partners 804 1
6 tA Associates 629 1
7= AxA private equity 585 1
7= european capital 585 1
9 lloyds tSB Development capital 417 2
10= Duke Street 404 3
10= parcom capital 404 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 europethe tables by value and volume have been run from 01 January 2010 to 31 may 2010 and exclude lapsed and withdrawn deals.
YTD 31-May-10
house Value (€m)
Deal count
1= Duke Street 404 3
1= parcom capital 404 3
3 ISIS private equity partners 29 3
4 capman group - 3
5 3i group 1,133 2
6 montagu private equity 1,117 2
7 lloyds tSB Development capital 417 2
8 Barclays private equity 363 2
9 phoenix equity partners 256 2
10 naxicap partners 237 2Source: mergermarket
AcTIVITY TABlE oF prIVATE EquITY FIrMs on EuropEAn ExITs
europe
Monthly M&A Insider 40
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
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q4 04
Q304
Q2 04
Q104
Valu
e (€
m)
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Num
ber
of d
eals
EuropEAn M&A quArTErlY MID-MArkET TrEnD
vAlUe volUme
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (€
m)
0
100
200
300
400
500
600
700
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Num
ber
of d
eals
moving average trend line
europe
Monthly M&A Insider 42
EuropEAn M&A sEcTor BrEAkDown YTD 2010
vAlUe volUme
0.5%
7.8%
3.5%
0.7%
14%
12.8%4.2%
9.0%
17.3%
23%2.5%
1.1%
4.5%
TMT
Business Services
Financial Services
Energy, Mining & Utilities
Pharma, Medical & Biotech
Construction
Leisure
Transportation
Real Estate
Agriculture
Defence
Industrials & Chemicals
Consumer
16.7%
21.8%
0.7%
0.7%
3.2%1.6% 4.1%
6.6%4.9%
11%
8.8%
7.6%
12.2%TMT
Business Services
Financial Services
Energy, Mining & Utilities
Pharma, Medical & Biotech
Construction
Leisure
Transportation
Real Estate
Agriculture
Defence
Industrials & Chemicals
Consumer
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
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e (€
m)
European buyouts
European exits
0
50
100
150
200
250
300
350
400
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Num
ber
of d
eals
European buyouts
European exits
europe
Monthly M&A Insider 42
EuropEAn M&A DEAl sIzE BrEAkDown
vAlUe volUme
0
50
100
150
200
250
300
350
400
450
500
550
600
650
700
H12010*
H22009
H12009
H22008
H12008
H22007
H12007
H22006
H12006
H22005
H12005
H22004
H12004
> €501m
€251m-€500m
€101m-€250m
€15m-€100m
€5m-€14.9m
Valu
e (€
bn)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
H12010*
H22009
H12009
H22008
H12008
H22007
H12007
H22006
H12006
H22005
H12005
H22004
H12004
> €501m
€251m-€500m
€101m-€250m
€15m-€100m
€5m-€14.9m
Value not disclosed
Num
ber
of d
eals
trenD grAphS
EuropEAn M&A gEogrAphIc BrEAkDown YTD 2010
vAlUe volUme
SEE
UK & Ireland
Nordic
France
CEE
Germany
Iberia
Benelux
Italy
Other
17.1%
2.8%
9.1%
7.4%
27.8%
9.0%
10.8%
8.1%
6.3%
2.5%
22.9%
12.6%
7.7%
12.3%12.3%
11.7%
6.7%
5.3%5.2% 3.1%
SEE
UK & Ireland
Nordic
France
CEE
Germany
Iberia
Benelux
Italy
Other
43
Mid
dle east &
africa
THE MIDDLE EAST & AFRICA
A MERgERMARkET M&A REpoRT on
Monthly M&A Insider
Amr El-Barbary, the Managing Director at Citadel Capital believes that Saudi Arabia will soon be a potentially big private equity market in the region. “The current environment creates substantial opportunities for private equity players. For example, the kingdom’s latest budget is the largest ever, with projected spending of SAR540bn. This allocates budget for spending on infrastructure, and real estate will have a strong knock-on effect in industries ranging from commodities such as steel to services including transportation,” he said. Companies that want to invest in the region need to take into consideration not only economical aspects but also political factors.
Businesses doing M&A deals also tend to be moving away from the traditional oil and gas sectors and moving to other areas like real estate and especially hotels where there is a high demand. For instance, Spanish hotel chain occidental Hotels and Resorts is looking to build hotels in the MEnA region and First & Foremost Hotels and Resorts, the UAE hospitality management company, is looking to set up JVs to develop 12 hotels in the gulf Cooperation Council.
Middle Eastern companies also appear to be on a shopping spree of Western luxury super stores. Indeed, the biggest acquisition in May was the sale of Harrods to Qatar Holding, the investment arm of Qatar Investment Authority, for €1.76bn by Mohammed al-Fayed, who will remain in the company as honorary chairman. Qatar Holding already holds stakes in Barclays, Credit Suisse, porsche, Volkswagen, Canary Wharf, London Stock Exchange and Sainsbury’s. This is the first time that it has bought the entire holding in a company signaling a bolder M&A strategy.
The Qatari company is contemplating opening a Harrods store in Shanghai on top of the knightsbridge and new York branches. Another luxury goods store, Barneys new York, is owned by Istithmar World Capital, the state-owned UAE private equity firm. now it remains to be seen if any other super stores get snapped up by Middle Eastern companies.
M&A deAls In MIddle eAst to pIck up, And sAudI ArAbIA tIpped to be the next bIg MArket In the regIon
AFTER A ToUgH 2009, M&A DEALS In MIDDLE EAST AnD noRTH AFRICA ARE SHoWIng SIgnS oF IMpRoVEMEnT. LAST MonTH SAW 14 DEALS In THE REgIon WITH A ToTAL VALUE oF €2.5Bn. In TERMS oF SECToRS, TELECoMMUnICATIonS AnD FInAnCIAL SERVICES ARE TWo InDUSTRIES In THE MIDDLE EAST THAT WILL SEE MoRE ConSoLIDATIon, ACCoRDIng To A ZAWYA REpoRT.
44
Mid
dle east &
africa
Monthly M&A Insider
target: Anglo American Zinc Announced: 10 May 2010
bidder: Hindustan Zinc Limited deal value: US$1.34bn
seller: Anglo American plc deal nature: Cross Border, private
descrIptIon • Anglo American plc has agreed to sell its portfolio of zinc
assets (Anglo American Zinc) to Vedanta Resources plc for a total consideration of US$1,338m on an attributable, debt and cash free basis.
• Anglo American Zinc assets include 100% of the Skorpion mine in namibia, 100% of the Lisheen mine in Ireland and 74% of Black Mountain Mining, which includes the Black Mountain mine and gamsberg project in South Africa. Anglo American plc, the listed Uk based company headquartered in London, is a mining and natural resources group. Hindustan Zinc Limited, the listed India based company headquartered in Udaipur, Rajasthan, operates as a mining and smelting company and a subsidiary of Vedanta Resources plc, the listed Uk based company headquartered in London, which is a metal mining company.
terMs• Total consideration of US$1,338m, on debt and cash-
free basis.
• As per the agreement, of the total consideration, US$698m relates to the Skorpion mine, US$308m relates to the Lisheen mine and US$332m relates to Anglo American’s 74% interest in Black Mountain Mining. ZAR 50 (£4.36) in cash per northam platinum share.
FInAncIng• The transaction will be funded from Vedanta’s existing
cash resources. Vedanta had cash and cash equivalents worth US$7.2bn as on 31 December 2010.
rAtIonAle• The transaction is expected to be immediately accretive
to earnings. Anglo Zinc is an operational and strategic fit, complementing Vedanta’s existing zinc business. The acquisition increases Vedanta’s geographical presence in Africa and Europe. The divestment is a part of Anglo
American’s strategy to focus on its portfolio of key mining assets including commodities like copper, iron ore and platinum.
• The transaction increases Vedanta’s zinc and lead production capacity from 1,064ktpa to 1,462ktpa, representing an increase of 37% in its annualized production capacity. The acquisition of mines increases reserves and resources by 206m tonnes, increasing Vedanta’s total reserves and resources by 76%.
expected coMpletIon• The transaction is expected to be completed within the
next 12 months. Vedanta expects separate completion dates for Skorpion, Lisheen and Black Mountain Mining, to be completed in stages. The economic ownership will be transferred from 1 January 2010.
condItIons• Customary regulatory approvals.
• Competition clearance in relevant jurisdictions.
bAckground• on 22 october 2009, Anglo American had announced
its decision to divest certain non-core assets, so as to focus on its core mining portfolio creating a streamlined business, with an enhanced focus on operational effectiveness and project delivery.
DEAL oF THE MonTH
45
Mid
dle east &
africa
Monthly M&A Insider
Advisers
target/seller bidder
Financial goldman SachsUBS Investment Bank
Financial Lazard
legal A&L goodbodyLinklaters
legal Dewey & LeBoeufCorpus Legal practitioners
pr Brunswick group pr Finsbury group
exit multiples – Y/e 30/06/2009 premium analysis
Multiples Value (us$m) offer price per share (us$) n/a
revenue 2x 670 1 day before n/a
ebItdA 6.3x 213 1 month before n/a
ebIt 8.7x 154 1 day after n/a
earnings - pre-rumour n/a
DEAL oF THE MonTH
46
Mid
dle east &
africa
Monthly M&A Insider
top 15 MIddle eAstern & AFrIcAn Announced deAls For Ytd 31 MAY 2010Announced status target company sector bidder company seller company exit multiples (x) bid premia
1-day beforedeal value
(us$m)revenue ebItdA p/e
30-Mar-10 p Zain Africa BV TMT Bharti Airtel Limited Mobile Telecommunications Company k.S.C.
11.2 10,700
28-Mar-10 p Sonangol Sinopec International Limited (55% stake)
Energy, Mining & Utilities
Sinopec Corporation Hongkong International Limited
Sinopec overseas oil & gas Limited
2,457
18-Feb-10 p Tsogo Sun Holdings pty Ltd
Leisure gold Reef Resorts Limited
Hosken Consolidated Investments Limited; and SABMiller plc
2,249
31-Mar-10 p Momentum group Limited
Financial Services
Metropolitan Life Limited
FirstRand Limited 1,986
10-May-10 p Anglo American Zinc Energy, Mining & Utilities
Hindustan Zinc Limited
Anglo American plc 2.0 6.3 1,338
25-Mar-10 p Hyprop Investments Limited (66.70% stake)
Real Estate Redefine Income Fund Limited
15.3 2.5% 942
21-Mar-10 C Qatar Shipping Company QSC
Transportation Qatar navigation Company Q.S.C.
-24% 917
10-Jan-10 C Qatar Real Estate Investment Co
Real Estate Barwa Real Estate Company QSC
n/a n/a 10.1 30.6% 862
20-May-10 p Shadeed Iron & Steel LLC
Industrials & Chemicals
Jindal Steel & power Ltd
Al ghaith Holding pJSC
464
10-Mar-10 C Foodcorp (proprietary) Limited (77% stake)
Consumer new Foodcorp Holdings (proprietary) Limited
pamodzi Investment Holdings (proprietary) Limited
0.6 5.8 453
18-Jan-10 p Bank Audi SAL - Audi Saradar group (13.95% stake)
Financial Services
M1 group Ltd EFg-Hermes Holding Company
n/a n/a 3.4% 450
15-Mar-10 p kingdom Hotel Investments (43.90% stake)
Leisure kingdom Holding Company
4.1 14.3 0.4 25.0% 375
18-Feb-10 p Chambishi Metals plc (90% stake); and Comit Resources FZE
Energy, Mining & Utilities
Eurasian natural Resources Corporation plc
International Mineral Resources BV
300
26-Apr-10 p northam platinum Ltd (12.20% stake)
Energy, Mining & Utilities
Eurasian natural Resources Corporation plc
Mvelaphanda Resources Limited
5.4 18.3 28.7 -4.8% 295
31-Mar-10 p Freeworld Coatings Ltd (81.14% stake)
Industrials & Chemicals
Brait private Equity 1.0 6.5 0.2 13.3% 291
C = Completed; p = pending; L = Lapsed Source: mergermarket
Top DEALS & ExpECTED DEALS
47
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 (us$m)
comments
potential takeover target
Sinokrot Agricultural Sector
Agriculture Abraaj Capital Holdings Limited; and Siraj Capital
10 Sinokrot Agricultural Sector (Sgg Agriculture), a palestinian agricultural project, is offering a financial or strategic investor a 25% stake for US$10m, the chairman of the board of directors, Mazen Sinokrot, said. Sgg Agriculture has been speaking with potential investors, Sinokrot said, adding that Dubai-based Abraaj Capital and Siraj Capital are looking at the project.
Rumoured takeover
Togo Telecom TMT France Telecom SA; MTn group Limited; globacom; Huawei Technologies Co Ltd
République Togolaise
200 Togo Telecom, the western African telecom player, is in talks to introduce a foreign strategic investor as part of its privatization programme, said a company source. It has spoken to France Telecom, MTn and globacom, and would welcome more approaches, he added.
Rumoured merger
Al khalij Commercial Bank QSC
Financial Services
International Bank of Qatar
11,100 The board of International Bank of Qatar (IBQ) has yet to meet to discuss its proposed merger with Qatar-listed Al-khalij Commercial Bank, a person with knowledge of the situation said
Expected deals based on confirmed announcements by companies involved
pIpelIne oF MIddle eAstern & AFrIcAn expected deAls
Top DEALS & ExpECTED DEALS
top 5 MIddle eAstern & AFrIcAn Announced deAls oF the Month (MAY 2010)Announced status target company sector bidder company seller company exit multiples (x) bid premia
1-day before
deal value
(us$m)revenue ebItdA p/e
10-May-10 p Anglo American Zinc Energy, Mining & Utilities
Hindustan Zinc Limited
Anglo American plc 2.0 6.3 1,338
20-May-10 p Shadeed Iron & Steel LLC
Industrials & Chemicals
Jindal Steel & power Ltd
Al ghaith Holding pJSC
464
17-May-10 C Al kout Industrial projects Company kSCC (48.69% stake)
Industrials & Chemicals
kuwait Financial Centre SAkC
Shuaa Capital pSC 2.8 0.02 57
11-May-10 p Regency Jerusalem Mount Scopus Hotel
Leisure Dan Hotels Corporation Ltd
Regency Jerusalem Hotel Ltd
47
24-May-10 C Comsys Communication and Signal processing Ltd
TMT Intel Corporation genesis partners; koor Corporate Venture Capital; Microdent Ventures ; and pitango Venture Capital
30
C = Completed; p = pending; L = Lapsed Source: mergermarket
48
Mid
dle east &
africa
Monthly M&A Insider
LEAgUE TABLES
VALUEYtd
31-May-10house Value
(us$m)deal count
1 UBS Investment Bank 15,795 4
2 Barclays Capital 13,943 3
3 HSBC Bank 11,617 2
4 Standard Chartered 11,000 2
5 Morgan Stanley 10,888 2
6 Bnp paribas 10,700 2
7= global Investment House 10,700 1
7= State Bank of India 10,700 1
9 goldman Sachs 10,306 8
10 Royal Bank of Scotland group 4,933 2
11 Commerzbank 4,933 1
12 Deutsche Bank 4,415 5
13 Lazard 3,967 4
14 Credit Suisse 3,399 3
15 Rand Merchant Bank 2,864 6Source: mergermarket
VoLUME
The financial adviser league tables by value and volume have been run from 01 January 2010 to 31 May 2010 and exclude lapsed and withdrawn deals. The tables cover all sectors andare based on the geography of either the target, bidder or seller being Middle East & Africa including Israel
Ytd 31-May-10
house Value (us$m)
deal count
1 goldman Sachs 10,306 8
2 Rand Merchant Bank 2,864 6
3 Deutsche Bank 4,415 5
4 UBS Investment Bank 15,795 4
5 Lazard 3,967 4
6 Barclays Capital 13,943 3
7 Credit Suisse 3,399 3
8 Standard Bank group 888 3
9 Deloitte 50 3
10 HSBC Bank 11,617 2
11 Standard Chartered 11,000 2
12 Morgan Stanley 10,888 2
13 Bnp paribas 10,700 2
14 Royal Bank of Scotland group 4,933 2
15 Investec 2,280 2Source: mergermarket
top 15 FInAncIAl AdVIsers – MIddle eAst & AFrIcA
VALUEYtd
31-May-10house Value
(us$m)deal count
1 Herbert Smith/gleiss Lutz/Stibbe 15378 4
2 Allen & overy 13573 6
3 Linklaters 13275 4
4 AZB & partners 11484 4
5 Edward nathan Sonnenbergs 5684 7
6 Freshfields Bruckhaus Deringer 5514 4
7 Stikeman Elliott 4966 2
8 Sullivan & Cromwell 4933 2
9= goERg Rechtsanwaelte 4933 1
9= kirkland & Ellis 4933 1
9= noerr 4933 1
9= Willkie Farr & gallagher 4933 1
13 Skadden Arps Slate Meagher & Flom 2457 1
14 Webber Wentzel 2328 5
15 Tabacks 2249 1
Source: mergermarket
VoLUME
The legal adviser league tables by value and volume have been run from 01 January 2010 to 31 May 2010 and include lapsed and withdrawn deals. The tables cover all sectors andare based on the geography of either the target, bidder or seller being Middle East & Africa including Israel
Ytd 31-May-10
house Value (us$m)
deal count
1 Edward nathan Sonnenbergs 5,684 7
2 Allen & overy 13,573 6
3 Bowman gilfillan 1,465 6
4 Webber Wentzel 2,328 5
5 Werksmans 678 5
6 Herbert Smith/gleiss Lutz/Stibbe 15,378 4
7 Linklaters 13,275 4
8 AZB & partners 11,484 4
9 Freshfields Bruckhaus Deringer 5,514 4
10 Dewey & LeBoeuf 2,163 4
11 norton Rose 0 4
12 gibson Dunn & Crutcher 735 3
13 Jones Day 597 3
14 DLA Cliffe Dekker Hofmeyer 392 3
15 Stikeman Elliott 4,966 2Source: mergermarket
top 15 legAl AdVIsers – MIddle eAst & AFrIcA
49
Mid
dle east &
africa
Monthly M&A Insider
LEAgUE TABLES
VALUE
VALUE
Ytd 31-May-10
house Value (us$m)
deal count
1 Capitau 453 1
2 Brait private Equity 291 1
3 Temasek Holdings 200 1
4 Tene Capital 23 1
5= Asian Healthcare Fund 20 1
5= Capinnova Investment Bank 20 1
7= good Energies Investments 15 1
7= new Energies Invest 15 1
7= Zouk Ventures 15 1
10 Halcyon Capital Holding Co 11 1Source: mergermarket
VoLUME
The private equity buyout activity tables by value and volume are based on private equity firms advising the bidder on buyout deals where the dominant geography of the target company is Middle East & Africa including Israel The tables by value and volume have been run from 01 January 2010 to 31 May 2010 and exclude lapsed and withdrawn deals
Ytd 31-May-10
house Value (us$m)
deal count
1 Capitau 453 1
2 Brait private Equity 291 1
3 Temasek Holdings 200 1
4 Tene Capital 23 1
5= Asian Healthcare Fund 20 1
5= Capinnova Investment Bank 20 1
7= good Energies Investments 15 1
7= new Energies Invest 15 1
7= Zouk Ventures 15 1
10 Halcyon Capital Holding Co 11 1Source: mergermarket
ActIVItY tAble oF prIVAte equItY FIrMs on MIddle eAstern & AFrIcAn buYouts
VALUEYtd 31-May-10
house Value (us$m)
deal count
1 pamodzi Investment Holdings 453 1
2 Radius Ventures 160 1
3 pitango Venture Capital 100 2
4= Ant Capital partners Co 60 1
4= Bridge Capital Fund 60 1
4= Cedar Fund 60 1
4= Marathon Venture Capital Fund 60 1
4= Mitsubishi UFJ Capital Co 60 1
4= nippon Venture Capital Co 60 1
4= Teuza - A Fairchild Technology Venture 60 1
4= Yozma group 60 1Source: mergermarket
VoLUME
The private equity exit activity tables by value and volume are based on private equity firms advising the vendor on exit deals where the dominant geography of the target company is Middle East & Africa including Israel The tables by value and volume have been run from 01 January 2010 to 31 May 2010 and exclude lapsed and withdrawn deals
Ytd 31-May-10
house Value (us$m)
deal count
1 pamodzi Investment Holdings 453 1
2 Radius Ventures 160 1
3 pitango Venture Capital 100 2
4= Ant Capital partners Co 60 1
4= Bridge Capital Fund 60 1
4= Cedar Fund 60 1
4= Marathon Venture Capital Fund 60 1
4= Mitsubishi UFJ Capital Co 60 1
4= nippon Venture Capital Co 60 1
4= Teuza - A Fairchild Technology Venture 60 1
4= Yozma group 60 1Source: mergermarket
ActIVItY tAble oF prIVAte equItY FIrMs on MIddle eAst & AFrIcA exIts
50
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
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e ($
m)
0
20
40
60
80
100
120
140
Q210*
Q110
Q4 09
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
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q3 05
Q205
Q105
Q404
Q304
Q204
Q104
Valu
e ($
m)
0
10
20
30
40
50
60
70
80
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Q104
Volu
me
of d
eals
Moving average trend line
51
Mid
dle east &
africa
Monthly M&A Insider
TREnD gRApHS
MIddle eAst & AFrIcA M&A sector breAkdown Ytd 2010
VALUE VoLUME
17%11%
4%
42%7%
1%
10%
5%
3%
Financial Services
Consumer
TMT
Business Services
Real Estate
Pharma, Medical & Biotech
Leisure
Transportation
Construction
Agriculture
Defence
Industrials & Chemicals
Energy, Mining & Utilites
15%
13%
6%
15%16%
15%
3%2%
1%
6%4%3%
3%
Financial Services
Consumer
TMT
Business Services
Real Estate
Pharma, Medical & Biotech
Leisure
Transportation
Construction
Agriculture
Defence
Industrials & Chemicals
Energy, Mining & Utilites
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
-
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Valu
e ($
m)
Middle East& Africa buyouts
Middle East& Africa exits
0
2
4
6
8
10
12
14
16
18
20
-
Q210*
Q110
Q409
Q309
Q209
Q109
Q408
Q308
Q208
Q108
Q407
Q307
Q207
Q107
Q406
Q306
Q206
Q106
Q405
Q305
Q205
Q105
Q404
Q304
Q204
Num
ber
of d
eals
Middle East& Africa buyouts
Middle East& Africa exits
52
Mid
dle east &
africa
Monthly M&A Insider
TREnD gRApHS
MIddle eAst & AFrIcA M&A geogrAphIc breAkdown Ytd 2010
VALUE VoLUME
3%9%
1%
13%
5%
1%
1%3%
7%
56%
Oman
Qatar
Saudi Arabia
Angola
Congo
Egypt
Iran
Isreal
Jordan
Kenya
Kuwait
Lebanon
Mauritania
Libya
Morocco
Namibia
Nigeria
4%7%
7%
3%
1%
10%
1%
41%
3%1%
7%
3%
1%1%
1%3%
5%
Oman
Qatar
Saudi Arabia
Angola
Congo
Egypt
Iran
Isreal
Jordan
Kenya
Kuwait
Lebanon
Mauritania
Libya
Morocco
Namibia
Nigeria
MIddle eAst & AFrIcA M&A deAl sIZe breAkdown
VALUE VoLUME
0
10
20
30
40
50
60
H12010*
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
H12010*
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
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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.
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The following notes pertain to data contained in this publication:
• Deals are included where the deal value is greater than or equal to €5m.
• Where no deal value has been disclosed, deals are included if the turnover of the target is greater than or equal to €10m.
• Deals are included in the graphs and Top Deals in each section based on the dominant geography and dominant sector of the target company. Data underlying the League Tables are based on deals where the bidder, target or parent geography of either is that of the geography in focus.
• H1 2010 refers to the period 31 January 2010 to 31 May 2010.