Monthly M&A Insider
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A mergermArket report on globAl m&A Activity Monthly M&A InsIder mArcH 2010 CONTENTS GlobAl overvIew 01 AsiA-PAcific 05 AmericAs: LAtin AmericA 16 North AmericA 24 euroPe 34 middLe eAst & AfricA 44 mergermarket Monthly M&A InsIder Part of the mergermarket group www.mergermarket.com 80 strand 895 Broadway #4 suite 2401-3 London, Wc2r 0rL new York, nY 10003 Grand millennium Plaza united Kingdom usA 181 Queen’s road, central hong Kong t: +44 (0)20 7059 6100 t: +1 212 686-5606 t: +852 2158 9700 f: +44 (0)20 7059 6101 f: +1 212 686-2664 f: +852 2158 9701 [email protected] [email protected] [email protected] global overview global overview global large-CaP TransforMaTioNal M&a appearS To be FirMly oN the CorPoraTe agenda. reMarKably, 2010 HaS So Far witnesseD SeveN US$10bN+ Transactions, exCeeDiNg announceD activiTy iN each oF the last three yearS over the SaMe TiMeFraMe. THe UNCerTaiN eCoNoMiC oUTlooK reMaiNS aN obSTaCle To M&a, However, iT DoeS NoT SeeM To be DeTerriNg MaNy woUlD-be aCqUirerS. a number oF Cash-rich and robust CorPoraTeS Clearly DeeM “Now” a gooD TiMe To Move, with Deal Flow beiNg DriveN by a DeSire To exPand and increaSe busiNess offeriNgS iN Key HigH growth MarKets. The largest deal of the year is a case in point in this regard in comparison to corporate M&a, private equity dealmaking with UK-based Prudential moving to acquire AIA group, at the top end of the market has remained relatively subdued. the pan-asian insurance provider, from AIG group for a However, activity is slowly beginning to return with buyout consideration of US$35.5bn. The transaction offers Prudential houses seemingly once again ready, willing and able to deploy the opportunity to expand into high growth asian markets capital. both the european and North american markets have and also enables an under pressure AIG to return cash to the seen notable transactions in recent weeks with the largest US government after its high profile bail-out at the height of deal standing as bain Capital’s US$1.6bn buy of the Styron the financial crisis.w hile the potential upside for Prudential division of chemical manufacturer Dow Chemical. The private is significant, the company has been forced to finance equity houses won an auction process run by HSbC and part of the acquisition through a US$20bn rights issue Deutsche bank, reportedly beating off competition from the fully underwritten by Credit Suisse, HSbC and JP Morgan likes of TPg and apollo Management. on the sell-side, the Cazenove. deal was driven by Dow’s strategy to divest non-core assets and reduce its net debt. elsewhere, aig was also involved on the sell-side of a multi- billion transaction in the North american market when it while M&a numbers continue to recover and trend upwards, moved to sell american life insurance Company (ALICo) to it is undeniable that the economic downturn remains one of Metlife for a total consideration of US$15.5bn. according to the key drivers of activity across all value segments. Tellingly, mergermarket intelligence, the acquisition will help create a several of the larger deals of the year have been driven by global leader in life insurance and enable Metlife to pursue non-core asset disposals with AIG perhaps being the most its expansion strategy in Japan, europe, the Middle east and extreme example in this case. going forward, corporations latin america. across the globe will continue to assess their business strategy and recent weeks have shown that there is a relative aside from dealmaking in the insurance niche of the Financial abundance of willing cash-rich acquirers. Services sector, 2010 has also been remarkable for the level of activity witnessed in Mexico. indeed, three of the six largest Tom Coughlan, Remark Mexican M&a deals in recent years have come to the market so far this year. Such activity has been principally driven by Carlos Slim-owned american Movil which has undertaken two large transactions in its quest to consolidate the latin american TMT market. Head of Research – elias latsis Global overview: Tom Coughlan Editor – anna Henderson Europe: Samuel Tedjasukmana, Damien Julliard and Felix barwinek Middle East & Africa: Debora Mehler, lars lundqvist and For advertising opportunities contact: Marie-laure Keyrouz Erik Wickman Latin America: Matthew albert and Jason Cozza Tel: + (1) 212 6863329 North America: aksana Fitzpatrick [email protected] Asia: Debbie Jung, Shunsuke okano and Chunshek Chan Monthly M&A Insider 01 TrEND graPHS GLOBAl M&A quArterly trend glob valUE vOlUME A l overvie 1,400,000 4,500 4,000 1,200,000 W 3,500 1,000,000 3,000 m) 800,000 $ 2,500 ( alue 2,000 V 600,000 olume of deals V 1,500 400,000 1,000 200,000 500 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10* 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10* GLOBAl M&A quArterly MId-MArket trend valUE vOlUME 140,000 2,000 120,000 1,500 100,000 m) 80,000 $ ( 1,000 alue V 60,000 Number of deals 40,000 500 20,000 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10* 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10* Moving average trend line Monthly M&A Insider 02 TrEND graPHS GLOBAl M&A quArterly PrIvAte equIty trend glob valUE vOlUME A l overvie 400,000 800 350,000 700 W 300,000 600 250,000 500 200,000 400 alue ($m) V Number of deals 150,000 300 100,000 200 50,000 100 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10* 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10* Global buyouts Global buyouts Global exits Global exits GLOBAl M&A seCtor breAkdown ytd 2010 valUE vOlUME 0.3% 1.9% 0.9% 0.9% 0.2% 2.6% 0.7% 2.0% 2.7% 2.5% Industrials & Chemicals 2.7% Energy, Mining & Utilities 3.5% 17.6% 21.3% 4.5% TMT 6.3% TMT Consumer Consumer 6.9% Pharma, Medical & Biotech Business Services Financial Services 12.0% Industrials & Chemicals 15.9% Financial Services Energy, Mining & Utilities 9.4% Real Estate Pharma, Medical & Biotech 18.6% Business Services Construction Leisure Leisure 15.1% 9.8% Construction 13.8% Tr ansportation Tr ansportation Real Estate 16.1% 11.7% Agriculture Defence Defence Agriculture Monthly M&A Insider 03 TrEND graPHS GLOBAl M&A deAl sIze breAkdown glob A valUE vOlUME l overvie 2,500 9,000 8,000 W 2,000 7,000 6,000 1,500 5,000 alue ($bn) 4,000 V 1,000 Number of deals 3,000 2,000 500 1,000 0 0 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010* 2004 2004 2005 2005 2006 2006 007 2007 2008 2008 2009 2009 2010* > $501m > $501m $251m-$500m $251m-$500m $101m-$250m $101m-$250m $15m-$100m $15m-$100m $5m-$14.9m $5m-$14.9m Value not disclosed Monthly M&A Insider 04 M&A Insights Global value realignment: Recognizing and pursuing tax opportunities in an ever-challenging environment Global value alignment (GVA) is an approach to managing cash flow with a focus on improving a company’s global tax and treasury profile. It involves aligning an organization’s business, treasury, and tax objectives, and then taking a holistic approach to global tax planning by focusing on the organization’s value drivers, operating model, earnings mix, and treasury needs. GVA is especially valuable in today ‘s environment because it can help companies address changing business models in response to today’s economy, the Obama administration’s tax proposals, and the global business transformation that has occurred during the last few years. In this M&A Insights article, we discuss the need for GVA, GVA’s components and benefits, and the types of companies that might take advantage of it.