November 2019, Issue 92

M&A activity in the U.S. and worldwide was mixed in October. The number of deals continued to fall with a decline of 11.2% in the U.S., to 744, and of 8.1% globally, to 2,708. At the same time, total deal value1 rose by 37.5% in the U.S., to $99.29 billion, and by 47.2% globally, to $282.72 billion. Average deal value also increased by 54.8% in the U.S., to $133.5 million, and by 60.2% globally, to $104.4 million. Figure 1.

Strategic vs. Sponsor Activity The number of strategic deals decreased in the U.S. by 15.6% to 583 and globally by 9.6% to 2,349, but strategic deal volume as measured by dollar value increased in the U.S. by 23.8% to $65.39 billion and globally by 27.4% to $197.49 billion. As the one consistent bright spot this month, sponsor-related deals showed gains across all metrics. The number of sponsor-related deals increased by 9.5% to 161 in the U.S. and by 2.6% to 359 globally, respectively, and sponsor-related volume by dollar value also significantly increased by 74.6% to $33.90 billion in the U.S. and by 129.7% to $85.24 billion globally. Figure 1 and Annex Figures 1A—4A.

Crossborder Activity Crossborder activity also demonstrated strength in October, and increased significantly across most indicators. Crossborder deal volume by dollar value increased by 112.9% to $132.99 billion, whereas the number of crossborder deals decreased globally by 3.8% to 608. U.S. inbound activity as measured by dollar value increased by 49.6% to $33.90 billion, driven in part by the announced $16.23 billion proposed acquisition of Tiffany & Co by LVMH Moet Hennessy Louis Vuitton SE, while the number of U.S. inbound crossborder deals decreased in October by 14.1% to 97. U.S. outbound activity as measured by dollar value increased significantly by 246.0% to $17.02 billion, driven largely by the announced $8.88 billion acquisition of InterXion Holding NV by Digital Realty Trust Inc. The number of U.S. outbound crossborder deals also increased by 3.5% to 120. Figure 1 and Annex Figures 5A—7A. France was the leading country for U.S. inbound activity in October by total dollar value ($16.23 billion), due again to the proposed offer for Tiffany & Co, while Canada was the leading country for U.S. inbound activity in October by number of deals (26). Canada was the leading country for U.S. inbound activity by deal value ($58.44 billion) and by number of deals over the last 12-month period (334 deals). The Netherlands was the leading country of destination for U.S. outbound activity in October by total dollar value ($8.88 billion) for the first time since June 2017, due to the $8.88 billion InterXion Holding NV acquisition. Canada was again the leading country of destination for U.S. outbound activity over the last 12 months as measured by dollar value ($29.73 billion), whereas the U.K. was the leading country of destination for U.S. outbound activity in October by number of deals (24) and over the last 12 months (264). Figure 3.

U.S. Deals by Industry Computers and Electronics was the most active target industry in October and over the last 12 months by number of deals (285 and 3,100, respectively). Real Estate and Property was the most active target industry in October by dollar value, while Computer and Electronics was the most active target industry over the last twelve months ($19.45 billion and $412.42 billion, respectively). Figure 2.

U.S. Public Mergers As for U.S. public merger deal terms in October 2019, average target break fees were slightly above their 12-month levels (at 4.0% compared to 3.7%). Average reverse break fees were, however, significantly above their 12-month levels (at 8.1% compared to 5.8%). The percentage of deals containing a go-shop provision also increased to 25.0% in October 2019, compared to the 12-month figure of 12.2%. Figures 6, 7 and 8. Cash transactions comprised 58.3% of U.S. public mergers, above the 52.4% 12-month average. Figure 9. Hostile or unsolicited transactions comprised 7.7% of U.S. public mergers in October 2019, significantly lower than the 12-month average of 13.5% of deals. Figure 12.

1 Each metric in this publication that references deal volume by dollar value is calculated from the subset of the total number of deals that includes a disclosed deal value.

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M&A Terms (Continued) Return to Summary

M&A Activity Figure 1 Figure 2 – Most Active U.S. Target Industries2 October 2019 Global +/- From U.S. +/- From By Volume (US$B) Prior Prior Month Month October 2019

Total Real Estate/Property $19.45 Volume (US$B) 282.72 90.59 99.29 27.07 Retail $16.75 No. of deals 2,708 (240) 744 (94) Computers & Electronics $14.63 Avg. value of deals (US$mil) 104.4 39.2 133.5 47.3 Oil & Gas $10.37

Healthcare $7.20 Strategic Transactions $0 $6 $12 $18 $24 $30 Volume (US$B) 197.49 42.46 65.39 12.58 No. of deals 2,349 (249) 583 (108) Last 12 Months Avg. value of deals (US$mil) 84.1 24.4 112.2 35.7

Computers & Electronics $412.42 Sponsor-Related Transactions Healthcare $400.09 Volume (US$B) 85.24 48.13 33.90 14.48 Oil & Gas $161.63 No. of deals 359 9 161 14 Avg. value of deals (US$mil) 237.4 131.4 210.6 78.5 Real Estate/Property $113.16 Defense $92.07 Crossborder Transactions1 $0 $120 $240 $360 $480 $600 Volume (US$B) 132.99 70.52 Inbound Inbound 33.90 11.24 Outbound Outbound By Number of Deals 17.02 12.10 October 2019 No. of deals 608 (24) Inbound Inbound 97 (12) Outbound Outbound Computers & Electronics 285 120 4 Avg. value of deals (US$mil) 218.7 119.9 Inbound Inbound Healthcare 91 349.4 141.6 Outbound Outbound Professional Services 69 141.8 99.4 Construction/Building and 34 Finance³ 0 60 120 180 240 300 Last 12 Months Figures 1-3 were compiled using Cortex, and are for the broader M&A market, including mergers of any value involving public and/or private entities. Deal volume by dollar value and Computers & Electronics average value of deals are calculated from the subset of the total number of deals that include 3,100 a disclosed deal value. Figures 4 and 5 were compiled using Deal Point Data, and include Healthcare 1,091 acquisitions seeking majority or full control of U.S. targets valued at $100 million or higher announced during the period indicated regardless of whether a definitive merger agreement Professional Services 942 was reached and filed or withdrawn. All data is as of November 11, 2019 unless otherwise Finance 525 specified. “Last 12 Months” data is for the period from November 2018 to October 2019 inclusive. Data obtained from Cortex and Deal Point Data has not been reviewed for accuracy Construction/Building 390 by Paul, Weiss. 0 700 1,400 2,100 2,800 3,500

1 Global crossborder transactions are those where the acquirer and the target have different nationalities. Nationality is based on where a company has either its headquarters or a majority of its operations. U.S. crossborder transactions are those transactions where the acquirer and the target have different nationalities and either the acquirer (“Outbound”) or the target (“Inbound”) has a U.S. nationality. 2 Industry categories are determined and named by Cortex. 3 Each of Construction/Budiling and Finance had 34 deals in October 2019.

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M&A Terms (Continued) Return to Summary

Figure 3 – Top 5 Countries of Origin or Destination for U.S. Crossborder Transactions Inbound U.S. Crossborder Transactions for October 2019 Inbound U.S. Crossborder Transactions for the Last 12 Months By Volume (US$B) By Volume (US$B)

France $16.23 Canada $58.44

Japan $7.02 United Kingdom $40.86

Canada $3.34 Japan $38.61

Belgium $2.31 Germany $35.58

Netherlands $1.40 France $30.22 $0 $5 $10 $15 $20 $0 $25 $50 $75 $100 By Number of Deals By Number of Deals

Canada 26 Canada 334 Japan 16 Japan 209 United Kingdom 13 United Kingdom 147 Sweden 5 Germany 69 China 4 China 61

0 8 15 23 30 0 100 200 300 400

Outbound U.S. Crossborder Transactions for October 2019 Outbound U.S. Crossborder Transactions for the Last 12 Months By Volume (US$B) By Volume (US$B)

Netherlands $8.88 Canada $29.73

China $2.85 United Kingdom $23.40

Puerto Rico $1.95 France $13.45

United Kingdom $0.78 Germany $11.01

Germany $0.49 Netherlands $9.96

$0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $0 $25 $50 $75 $100

By Number of Deals By Number of Deals

United Kingdom 24 United Kingdom 264

Canada Canada 12 228 Australia 99 China 7 Germany 78 Australia, Israel 6 and Sweden⁴ France 70 0 8 15 23 30 0 100 200 300 400

4 Each of Australia, Israel and Sweden was the country of destination for six transactions in September 2019.

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M&A Terms (Continued) Return to Summary

Figure 4 – Average Value of Announced U.S. Public Mergers (in US$mil)

$25,000

$21,507.8

$20,000 $19,092.4

$16,353.8 $13,310.6 $15,000 $11,592.8 $11,137.9 $10,000 $9,397.4 $2,418.4 $5,095.6 $8,508.1 $6,153.2 $6,779.4 $5,000 $4,729.8 $4,352.0 $5,064.4 $5,748.4 $4,287.0 $956.2 $1,599.0 $1,477.1 $1,981.3 $1,575.3 $2,699.0 $0 $822.3

Average Value of U.S. Public Mergers Average Value of Five Largest U.S. Public Mergers

Figure 5 – Five Largest U.S. Public Mergers October 2019 Equity Value (US$B)

Tiffany & Co. ~ LVMH Moet Hennessy Louis Vuitton SE $14.50 (October 28, 2019) Liberty Property Trust ~ Prologis, Inc. $9.66 (October 27, 2019) Anixter International Inc. ~ Clayton, Dubilier & Rice, LLC $2.73 (October 30, 2019) Ra Pharmaceuticals, Inc. ~ UCB S.A. $2.26 (October 10, 2019) Jagged Peak Energy Inc. ~ Parsley Energy, Inc. $1.62 (October 14, 2019) $0 $10 $20 $30 $40 $50 Last 12 Months Equity Value (US$B)

Celgene Corporation ~ Bristol-Myers Squibb Company $71.62 (January 3, 2019) Raytheon Company ~ United Technologies Corporation $52.03 (June 9, 2019) Anadarko Petroleum Corporation ~ Occidental Petroleum Corporation $37.97 (April 24, 2019) Worldpay, Inc. ~ Fidelity National Information Services, Inc. $34.84 (March 18, 2019) Anadarko Petroleum Corporation ~ Chevron Corporation $32.47 (April 12, 2019) (Offer withdrawn May 9, 2019) $0 $20 $40 $60 $80 $100

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M&A Terms (Continued) Return to Summary M&A Terms Figure 6 – Average Break Fees as % of Equity Value5

(US$mil) 12% $15,000 $13,519.1

8.1% $10,000 6.8% $8,508.1 6.5% 5.7% 6.0% 6% 5.5% 5.6% 4.7% 4.8% 4.7% 4.4% $5,748.4 4.2% 3.6% $5,995.0 3.6% $5,000 $5,678.8 $5,016.2 4.0% 3.9% 3.8% 4.0% 3.6% 3.6% 3.5% 3.2% 3.3% 3.0%

$2,216.2 $1,659.7 $1,637.0 $1,514.4 $1,715.9 0% $822.3 $0

Target Break Fee Reverse Break Fee Average Value of U.S. Public Mergers (in US$mil)

Figure 7 – Average Break Fees as % of Equity Value6 Figure 8 – U.S. Public Merger Go-Shop Provisions10 October Last 12 October Last 12

2019 Months 2019 Months

Target Break Fee for All Mergers 4.0 3.7 % of Mergers with Go-Shops 25.0 12.2 % of Mergers Involving Financial 11 75.0 39.4 October Last 12 Buyers with Go-Shops

2019 Months % of Mergers Involving Strategic Buyers 12 0.0 4.4 Reverse Break Fee for All Mergers7 8.1 5.8 with Go-Shops Reverse Break Fee for Mergers Avg. Go-Shop Window (in Days) for All 8.6 6.9 30.3 36.8 Involving Financial Buyers8 Mergers with Go-Shops13 Reverse Break Fee for Mergers 7.3 5.0 Avg. Go-Shop Window (in Days) for Involving Strategic Buyers9 Mergers Involving Financial Buyers with 30.3 35.5 14 Go-Shops Figures 6-12 were compiled using Deal Point Data, and include acquisitions seeking Avg. Go-Shop Window (in Days) for majority or full control of U.S. targets valued at $100 million or higher announced Mergers Involving Strategic Buyers with N/A 40.4 during the period indicated and for which a definitive merger agreement was reached Go-Shops15 and filed (unless otherwise indicated). Data obtained from Deal Point Data has not been reviewed for accuracy by Paul, Weiss.

5 Based on the highest target break fees and reverse break fees payable in a particular deal. 6 Financial and strategic categories are determined by Deal Point Data. 7 Seven transactions in October 2019 had a reverse break fee. 8 Four transactions in October 2019 involving a financial buyer had a reverse break fee. 9 Three transactions in October 2019 involving a strategic buyer had a reverse break fee. 10 Financial and strategic categories are determined by Deal Point Data. 11 Four transactions in October 2019 involved a financial buyer. 12 Eight transactions in October 2019 involved a strategic buyer. 13 Three transactions in October 2019 had a go-shop provision. 14 Three transactions in October 2019 involving a financial buyer had a go-shop provision. 15 Zero transactions in October 2019 involving a strategic buyer had a go-shop provision.

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M&A Terms (Continued) Return to Summary

Figure 9 – Form of Consideration as % of U.S. Public Mergers16 Figure 10 – % of Partial and All Stock Deals That Have a Fixed Exchange Ratio October 201917 100.0 Last 12 Months 95.7

58.3% 33.3% Figure 11 – Tender Offers as % of U.S. Public Mergers Cash Only October 2019 0.0 Last 12 Months 15.0 8.3% Stock Only

October 2019 Cash and Stock Only Figure 12 – Hostile/Unsolicited Offers as % of U.S. Public Mergers18 Choice (Cash / Stock Election) October 2019 7.7 29.3% Last 12 Months 13.5 Other

52.4% 16 Due to rounding, percentages may not add up to 100%. 17 There were five partial or all stock transactions in October 2019. 12.9% 18 This data includes both announced transactions for which a definitive merger agreement was reached and filed and those for which a definitive merger agreement 5.4% was never reached and filed (including withdrawn transactions). Last 12 Months

Paul, Weiss is a leading law firm serving the largest publicly and privately held corporations and financial institutions in the United States and throughout the world. Our firm is widely recognized for achieving an unparalleled record of success for our clients, both in their bet-the-company litigations and their most critical strategic transactions. We are keenly aware of the extraordinary challenges and opportunities facing national and global economies and are committed to serving our clients’ short- and long-term goals. Our Mergers & Acquisitions Practice The Paul, Weiss M&A Group consists of more than 35 partners and over 125 counsel and associates based in New York, Washington, Wilmington, London, Toronto, Tokyo, Hong Kong and Beijing. The firm’s Corporate Department consists of more than 60 partners and over 300 counsel and associates. Our M&A Group is among the most experienced and active in the world. We represent publicly traded and privately held companies, leading private equity firms, financial advisors, and other financial institutions and investors in their most important mergers and acquisitions, joint ventures and other strategic transactions. Our expertise advising corporations and private investors in a broad range of sophisticated transactions enables us to identify new opportunities for our clients to realize value. We have particular experience in guiding clients as they engage in proxy battles, company-altering and market consolidating transactions or capital markets transactions. Recent highlights include advising: the Special Committee of the Board of Directors of Pattern Energy Group in its approximately $6.1 billion sale to Canada Pension Plan Investment Board; Aptiv in its $4 billion autonomous driving joint venture with Hyundai Motor Group; the Special Committee of the Board of Directors of CBS Corp. in its proposed merger with Viacom to form ViacomCBS, a combined company with an enterprise value of more than $40 billion; Elanco Animal Health in its proposed $7.6 billion acquisition of the animal health business of Bayer AG; funds managed by affiliates of Apollo Global Management in their $2.7 billion acquisition of Shutterfly; the independent directors of Avon in its proposed $3.7 billion sale to Natura & Co.; KPS Capital Partners in its $1.8 billion acquisition of Howden from Colfax; Ingersoll-Rand in the proposed $15 billion merger of its Industrial business with Gardner Denver; Chevron in its proposed $50 billion acquisition of Anadarko Petroleum; General Electric in the proposed $21.4 billion sale of its BioPharma business to Danaher Corporation; Encana Corp. in its $7.7 billion acquisition of Newfield Exploration Company; IBM in its $34 billion acquisition of Red Hat; the board of directors of Harris Corporation in its $37 billion merger of equals with L3 Technologies to form L3Harris Technologies CSRA in its $9.7 billion sale to General Dynamics; Bioverativ in its $11.6 billion sale to Sanofi; ADP in its successful proxy contest against Pershing Square; and Agrium in its $36 billion merger of equals with Potash Corp. of Saskatchewan.

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This publication is not intended to provide legal advice, and no legal or business decision should be based on its content. Questions concerning issues addressed in this memorandum should be directed to:

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Counsel Frances F. Mi and associates Feiran Felicia Chen, Vincent P. Iacono, Eliana Wasser, Ceecee Q. Yao and law clerks Stacy Hwang, Allyson N. Kaleita and Jade Magalhaes contributed to this publication.

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A N N E X Return to Summarys

M&A Activity – 12-Month Trends

Figure 1A – U.S. Deal Volume (US$B)

$324.26

$300

$202.13 $200 $278.30

$140.35 $136.95 $142.32 $143.00 $142.08 $134.31 $126.31 $121.01

$74.36 $99.29 $100 $77.77 $81.60 $72.23 $80.98 $111.12 $83.36 $100.76 $99.43

$65.39 $52.98 $67.82 $62.58 $60.72 $52.81 $62.03 $45.97 $36.19 $30.96 $37.65 $21.38 $26.88 $19.42 $33.90 $0

Strategic Sponsor Total

Figure 2A – Global Deal Volume (US$B)

$600

$500 $480.81

$400 $355.15 $341.11 $335.72 $294.60 $280.75 $389.55 $282.72 $300 $241.23 $257.90 $256.56 $238.01

$272.75 $192.13 $254.63 $200 $223.72 $204.77 $185.96 $172.90 $176.09 $179.51 $179.04 $197.49 $155.03 $100 $108.64 $112.00 $100.52 $83.66 $75.98 $91.26 $78.87 $61.92 $61.72 $68.36 $85.24 $37.10 $0

Strategic Sponsor Total

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A N N E X Return to Summary

Figure 3A – U.S. Number of Deals

1,000 924 888 828 845 838 814 768 769 800 744 690

598 731 574 694 691 600 661 637 636 612 583 550 567 400 473 402

200 230 201 172 177 192 184 161 125 140 157 157 147 0

Strategic Sponsor Total

Figure 4A – Global Number of Deals

4,000

3,290 3,200 3,037 3,076 3,065 2,934 2,926 2,948 2,707 2,708 2,733 2,736 2,562 2,816 2,400 2,543 2,607 2,703 2,582 2,542 2,598 2,360 2,402 2,362 2,349 2,214 1,600

800 430 483 474 373 334 391 348 373 384 345 350 359

0

Strategic Sponsor Total

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A N N E X Return to Summary

Figure 5A – Inbound U.S. Crossborder Transactions

$100 200

$80 124 150 109 111 112 108 114 108 110 109 $60 105 104 97 100 $40 50 $20 $17.56 $9.68 $22.26 $15.20 $12.20 $25.00 $22.66 $33.90 $0 $49.20 $26.53 $45.70 $12.94 0

By Volume (US$B) By Number of Deals

Figure 6A – Outbound U.S. Crossborder Transactions

$100 200

144 149 $80 131 133 127 121 120 150 114 111 119 116 $60 97 100 $40 50 $20 $9.75 $4.90 $9.27 $7.75 $19.76 $4.92 $17.02 $0 $8.97 $19.21 $4.19 $23.88 $14.92 0

By Volume (US$B) By Number of Deals

Figure 7A – Global Crossborder Transactions

$250 1,000 $200 787 694 701 688 666 638 662 618 632 595 632 608 $150 500 $100

$50 $92.96 $81.69 $72.11 $62.10 $100.58 $59.81 $87.15 $80.10 $129.75 $79.29 $62.48 $132.99 $0 0

By Volume (US$B) By Number of Deals

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