Monthly M&A Insider

A mergermarket report on global M&A activity Monthly M&A Insider SEPTEMBER 2010 CONTENTS

Global overview 01 Americas: Latin America 05 North America 12 Asia-Pacific 24 Europe 35 middle east & africa 46

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 glob a l overvie w The recent return of large-cap corporate M&A has been well documented. Indeed, the third quarter of 2010 already abounds with examples of transformational plays made by acquisitive and ambitious trade players. The North American market has seen one of the largest announced M&A deals of recent years in the form of BHP Billiton’s US$41.91bn hostile bid for Canada’s Potash Corporation of Saskatchewan.

Not to be completely outdone, Europe has seen its fair share While private equity buyout numbers continue to recover in of M&A activity at the top-end of the market with the largest terms of transaction volumes and valuations, it is also notable transaction being the €20.70bn (US$27.28bn) reverse takeover that several significant exits have also come to market as sale involving GDF Suez Energy International and International conditions gradually improve. This has helped spur a relative Power. Even Latin America and the Asia-Pacific regions have flurry of private equity disposals with mergermarket data witnessed significant activity with regional heavyweights such showing that 24 US$500m+ exits have been brokered over the as Telefonica, Panasonic and the newly created Sumitomo second half of 2010 so far, compared to just five such deals Mitsui Trust Holdings all recently moving to broker deals. over the same timeframe 12 months previous.

Against this backdrop, private equity houses have largely taken Clearly, the global financial crisis has had a profound impact something of a backseat as their corporate counterparts upon holding periods with many funds opting against a sale have grabbed the M&A headlines. Nevertheless, it is arguable over the last 24 months, generally preferring to keep firms in that the real story of recent months has been the return of portfolio until the market begins to recover. While the global the private equity mega-deal with 14 US$1.00bn+ buyouts economy is far from out of the woods, it is reasonable to argue announced in the second half of 2010. Unsurprisingly, such that leverage is slowly becoming easier to obtain and the activity has largely centred in the North American market with price dislocation between buy and sell-side parties is easing. the top buyout seeing the Blackstone Group acquire US-based As such, a number of private equity firms, under pressure energy firm Dynergy for a total consideration of US$4.85bn. to provide returns to increasingly disaffected and impatient Elsewhere, another high profile deal was announced in the limited partners, are now exploring disposal avenues, leading Leisure space with 3G Capita acquiring fast food behemoth to recent brisk activity in the exit market. With the IPO Burger King in a take private valued at US$3.83bn. window remaining shut, a sale to a trade player remains the most likely exit route, accounting for 67.0% of overall exits To an extent, recent deal flow has been an exacerbation (excluding IPOs) in H2 2010 to date. of a longer-term trend which has seen financial investors increasingly ready, willing and able to broker sizeable deals. The top exit of recent months is a case in point in this regard This is reinforced to good effect by mergermarket data which with a consortium of firms comprising Ontario Teachers’ shows that the average size of disclosed value private equity- Pension Plan, Torstar Corporation and The Woodbridge related deals in 2010 to date stands at US$256m. Tellingly, Company disposing of an 85.00% stake in Canadian this represents a marked increase on 2009 and, to a lesser multimedia firm CTVglobemedia (excluding its Globe and Mail extent, 2008 numbers where the corresponding figures stood businesses). In a deal valued at US$2.85bn, the firms sold out at US$189m and US$240m respectively. to telecommunications giant Bell Canada Enterprises.

Head of Research – Elias Latsis Global overview: Tom Coughlan Editor – Rory McNeil Latin America: Mathew Albert For advertising opportunities contact: North America: Jason Cozza Erik Wickman Asia-Pacific:Shunsuke Okano and Anita Wong Tel: + (1) 212 6863329 Europe: Samuel Tedjasukmana and Giovanni Gallorini [email protected] Middle East & Africa: Marie-Laure Keyrouz and Lars Lundqvist

Monthly M&A Insider 01 Trend graphs

GLOBAL M&A quarterly trend glob a l overvie w value volume

1,400,000 4,500

4,000 1,200,000

3,500 1,000,000 3,000

800,000 2,500

600,000 2,000 alue (US $ m) V 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 Q2 Q3 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 Q2 Q3 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 10 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 10 10*

GLOBAL M&A quarterly mid-market trend

value volume

140,000 2,000

120,000

1,500 100,000

80,000

1,000

60,000 alue (US $ m) V Number of deals

40,000 500

20,000

Moving average trend line

Monthly M&A Insider 02 Trend graphs

GLOBAL M&A quarterly private equity trend glob a l overvie w value volume

400,000 800

350,000 700

300,000 600

250,000 500

200,000 400 alue (US$m) V Number of deals 150,000 300

100,000 200

50,000 100

Global buyouts Global buyouts

Global exits Global exits

GLOBAL M&A Sector Breakdown YTD 2010

value volume

0.9% 2.2% 1.3% 2.8% 0.4% 0.5% 1.8% 3.8% 13.3% 2.9% Industrials & Chemicals 3.4% 17.7% Industrials & Chemicals 1.3% TMT 4.1% TMT

9.1% Consumer Consumer 7.6% 15.3% Business Services Business Services

Energy, Mining & Utilities Energy, Mining & Utilities 15.0% Financial Services Financial Services 10.9% 10.4% Pharma, Medical & Biotech Pharma, Medical & Biotech

Construction Construction 8.5% Leisure Leisure

Tr ansportation 10.9% Tr ansportation 6.3% 12.4% Real Estate 25.6% Real Estate 11.6% Agriculture Agriculture

Defence Defence

Monthly M&A Insider 03 Trend graphs

GLOBAL M&A deal size breakdown glob a l overvie w

value volume

2,500 9,000

8,000

2,000 7,000

6,000 1,500 5,000

4,000

alue (US$bn) 1,000 V 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 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010* 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010*

> US$501m > US$501m

US$251m-US$500m US$251m-US$500m

US$101m-US$250m US$101m-US$250m

US$15m-US$100m US$15m-US$100m

US$5m-US$14.9m US$5m-US$14.9m

Value not disclosed

Monthly M&A Insider 04 05

Monthly M&A Insider Monthly C’s acquisition of a 50.00% 50.00% a of acquisition C’s OO this year.ace divest its Colombian-based assets to to assets Colombian-based its divest P as the group seeks to raise some some raise to seeks group the as P up brokered in the TMTther large tie- Elsewhere, the second largest transaction in the month of of month the in transaction largest second the Elsewhere, & Utilities Mining in the Energy, market to came August B saw deal The space. Ecopetrol, and firm, gas and oil Canadian a Energy, Talisman transaction a in Colombia, of firm energy state-controlled the is also the transaction at US$1.75bn. At this valuation, valued space Utilities & Mining Energy, the in largest second the CN by only surpassed 2010, of quarter first the in US$3.10bn for Corporation Bridas in stake of the year. being divestitures of wave a of part is sell-off asset The B by undertaken the in debt down pay and costs cover to US$30.00bn oil spill. On the buy-side, the of the Gulf of Mexico aftermath its up build to strategy Ecopetrol’s with line in is acquisition its strengthen to as well as capacity, production and reserves transportation the in and industry gas natural the in position the Talisman, For segment. business resources gas and oil of the company’s increase play to joint acquisition is a strategic its position in consolidate and to assets Latin American region. the w yet ano aulo aulo P ortugal Telecom, for instance, is currently currently is instance, for Telecom, ortugal P i, another leading telecoms operator in Brazil, in in Brazil, in operator telecoms leading another i, O

ortugal Telecom that has a controlling stake in Brazil’s Brazil’s in stake controlling a has that Telecom ortugal the sp p deals in ge-ca the heels of a string of lar or, straight on P

oing forward, the grab for market share and need to remain remain to need and share market for grab the forward, oing sect G telecoms two these by offerings service in competitive sure is players, international big other as well as giants, fast-growing the in activity consolidation further drive to market. Brazilian largest wireless operator Vivo. The Spanish group will now now will group Spanish The Vivo. operator wireless largest merge to and s shareholder minority Vivo’s buyout to move Telesp. operator fixed-line its with business the 23.00% a around for of acquisition stake a out hammering in share deal estimated to be worth US$4.70bn. US$4.70bn. worth be to estimated deal In July, Telefónica brokered the US$9.75bn acquisition of a of acquisition US$9.75bn the brokered Telefónica July, In company holding venture joint a Brasilcel, in stake 50.00% with The deal, which ranks as the largest in Latin America in in America Latin in largest the as ranks which deal, The of empire business the of part become NET see will August, Embratel’s of owner Slim, Carlos magnate telecoms Mexican is acquisition NET The Móvil. América company parent integrate to strategy Móvil’s America to complementary services and TV wireless internet, broadband fixed-line, time a at market Brazilian the in structure single a into group Spanish the from share market for competition when rise. the on is Telefónica headquartered provider of cable television and broadband broadband and television cable of provider headquartered US$2.61bn. of consideration total a for internet, The transaction saw Embratel, one of Brazil’s leading fixed- leading of Brazil’s one saw Embratel, The transaction a acquire to move businesses, telecommunications line São the Comunicação, de Serviços NET in stake 58.06% deal market sa American atin In August, the L on po rt re M&A ket ermar g A mer LATIN AMERICA LATIN

LATIN AMERICA DEAL OF THE MONTH

Target: NET Servicos de Comunicacao SA (stake: 58.06%) Announced: 5-Aug-10 LATIN AMERICA

Bidder: Embratel Participacoes SA (formerly MCI Brazil) Deal value: US$2.61bn

Seller: Deal nature: Acquisition, Domestic, Public

STRUCTURE • Slim currently owns America Movil in which owns Embratel who’s subsidiary Empresa Brasileira de • Embratel Participacoes SA has made a tender offer to Telecomunicações SA is issuing the tender offer to the acquire a 58.06% economic interest in Net Servicos de preferred shareholders of Net. Comunicacao SA. • The acquisition is also part of Slim’s strategy to • Net Servicos de Comunicacao SA, the Brazil- compete against other major market presences such as based company headquarted in Sao Paulo, is a Telefonica which acquired Vivo Participacoes SA, another telecommunications company that specializes in cable telecommunications company in Brazil. Embratel and television and broadband internet services. Empresa together currently own 12.86% of Net Servicos • Embratel Participacoes SA, a Brazil-based preferred shares. company headquarted in Rio de Janeiro, Brazil is a telecommunications company that specializes in fixed- line voice and data services, as well as pay-television. CONDITIONS • Subject to the acceptance of the preferred shareholders. TERMS • 199,124,767 preferred shares at BRL23.00 per share, BACKGROUND which represents 87.14% of preferred shares. • Empresa Brasileira Telecomunicacoes SA, the Brazil- based subsidiary of Embratel Participacoes SA issued the • Total preferred and common shares represent a 58.06% tender offer to Net Servicos de Comunicacao SA preferred economic interest in Net Servicos de Comunicacao SA. shared holders. • The implied equity value of the transaction is • Embratel is indirectly owned by Carlos Slim, the Mexican approximately BRL7.30bn (US$4.47bn). business man who owns Embratel through America Movil SAB, the Mexico-based listed wireless carrier. Carlos Slim RATIONALE also owns Telemex, the Mexico-based listed telecoms • The acquisition of Net Servicos de Comunicacao company which he plans to merge with America Movil to SA is in line with Carlos Slim’s strategy to create a compete against the Telefonica Vivo combination. telecommunications giant in Brazil that would align and • Empresa Brasileira and Embratel, before the issue of the offer fixed-line, broadband internet, wireless, and TV tender offer, together owned 37.90% of Net Servicos de services under a single structure. Comunicacao SA common shares and 12.86% of preferred shares as of their 2005 stake acquisition.

Advisers Target/Seller Bidder Financial Financial Banco Itau BBA SA Financial Legal Xavier Bernardes Braganca

mergermarket/dealReporter Intelligence

19-Aug-10 Embratel delays US$2.60bn public offer for all preferred shares in Net Servicos to 29 September, says bid also will be made in USA 5-Aug-10 Embratel bids US$2.60bn for preferred shares in Net Servicos

Monthly M&A Insider 06 Top deals & expected deals

Top 15 Latin American announced deals YTD 31 august 2010 LATIN AMERICA

Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia Deal Revenue EBITDA P/E 1-day before value (US$m) 13-Jan-10 C Carso Global TMT America Movil SA de CV 1.7 4.9 14.4 3.1% 28,055 Telecom SAB de CV 28-Jul-10 P Barsilcel NV (50% TMT Telefonica SA Portugal - 9,746 stake) Telecom SGPS SA 11-Jan-10 C FEMSA Cerveza SA Consumer Heineken NV Fomento - 7,692 de CV Economico Mexicano SAB de CV 13-Jan-10 C Telmex TMT America Movil SA de CV 2.6 10.6 23.6 2.2% 6,533 Internacional SAB de CV (39.30% stake) 02-May-10 P Alumina do Norte Industrials & Norsk Hydro ASA Vale SA - 4,900 do Brasil SA (57% Chemicals stake); Aluminio Brasileiro SA (51% stake); Companhia de Alumina do Para (61% stake); and Paragominas bauxite mine (60% stake) 22-Jan-10 C Polibutenos Industrials & Braskem SA Uniao de - 4,238 SA Industrias Chemicals Industrias Quimicas (33.33% Petroquimicas stake); Quattor SA Participacoes SA (60% stake); and Unipar Comercial e Distribuidora SA 27-Jan-10 C Bunge Participacoes Industrials & Vale SA Bunge Limited - 3,800 e Investimentos SA Chemicals 14-Mar-10 P Bridas Corporation Energy, Mining CNOOC International Bridas Energy - 3,100 (50% stake) & Utilities Limited Holdings Ltd 05-Aug-10 P NET Servicos de TMT Embratel Participacoes 1.7 6.8 11.3 14.5% 2,606 Comunicacao S.A. SA (58.06% Stake) 09-Jun-10 P Grupo Financiero Financial Banco Santander Bank of America n/a n/a - 2,500 Services Corporation 03-May-10 p Agre Real Estate PDG Realty SA n/a n/a 13.8 1.5% 1,955 Empreendimentos Empreendimentos e Imobiliarios SA Participacoes 15-Jul-10 P BAC Credomatic Financial Grupo Aval Acciones y GE Capital Global n/a n/a - 1,900 GECF Services Valores SA Banking 10-Feb-10 C Fertilizantes Industrials & Vale SA The Mosaic 7.2 - 1,834 Fosfatados SA Chemicals Company; and (36.79% stake) Yara Brasil Fertilizantes SA 03-Aug-10 P BP Exploration Energy, Mining Talisman Energy Inc; BP plc - 1,750 Company (Colombia) & Utilities Ecopetrol SA Limited 18-May-10 p Plena Energy, Mining State Grid Corporation Plena - 1,721 Transmissoras SA & Utilities of China Transmissoras (Seven Brazilian SA transmission companies) C = Completed; P = Pending; L = Lapsed Source: mergermarket

Monthly M&A Insider 07 08 593 199 159 2,606 1,750 (US$m) Deal value - - - - - Source: mergermarket Source: Monthly M&A Insider Monthly Bid premia 1-day before P/E ecember 2009 tagged Japanese conglomerate conglomerate Japanese tagged 2009 ecember Exit multiples (x) Exit multiples JBS, the world’s largest meatpacker, may sell its its sell may meatpacker, largest world’s the JBS, in the state plant located slaughtering Carceres and an officer said a company Grosso, of Mato source. industry on the sale of Aguas Nuevas, the Chilean utility, utility, Chilean the Nuevas, Aguas of sale the on a to according deal, a sealing to close is it and Banco February, In situation. the to close source memorandum sent out an information Santander the expected were bids and Nuevas Aguas on infrastructure are buyers Likely month. following Morgan and Capital Macquarie as such funds in report published A Infrastructure. Stanley D could source The buyer. potential a as Marubeni has it but value, deal potential a on comment not worth be could Nuevas Aguas that reported been customers 356,000 has utility The US$350m. market. water Chilean the of share 8.8% an and II, which Fund Infrastructure Santander the acquired assets, infrastructure in specializes Grupo Solari. from year utility last Chilean Comments 1.7 6.8 11.3 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Revenue EBITDA n/a 350 buyers is negotiating with a few Santander Banco value (US$m) value BP plc Seller company Seller Brazil Brazil P Banco Santander Santander Banco Seller companySeller cap/est. Market articipacoes articipacoes Financial Financial adviser to (B); bidder (T); target (S) seller articipacoes em em articipacoes SA (formerly MCI Brazil) SA (formerly Embratel P Embratel Talisman Energy Inc; Inc; Energy Talisman SA Ecopetrol de Companhia P Concessoes ypermarcas SA Hypermarcas Bidder company Carlyle South America America South Carlyle FI Fund; Buyout de Internacionalizacao de empresas otential bidder bidder otential P company Macquarie Capital, Morgan Stanley Infrastructure or Marubeni TMT Energy, Mining Mining Energy, & Utilities Construction Consumer deals

Energy, Mining Mining Energy, & Utilities Sector este S/A S/A este O Exploration Exploration ected P NET Servicos de de Servicos NET SA Comunicacao (58.06% stake) Company (Colombia) (Colombia) Company Limited B Integradas Rodovias do (73.45% stake) Mabesa do Brasil SA Brasil do Mabesa Consumer Scalina Ltda Ltda Scalina (51.00% stake) xp e

ending; L = Lapsed JBS SA Agriculture SA Minerva Target Target company Nuevas P P P P C Meias Industria of

eline

p Announced Status company Target Sector ugust 2010) deals of the month (A announced merican A op 5 Latin 05-Aug-10 03-Aug-10 03-Aug-10 07-Aug-10 30-Aug-10 Rumoured Rumoured target takeover Expected deals based on confirmed announcements by companies involved by announcements deals based on confirmed Expected Auction Aguas Situation P = P C = Completed; Pi

T eals d d pecte & ex eals d Top

LATIN AMERICA League tables

Top 15 financial advisors – LATIN AMERICA LATIN AMERICA value volume

YTD House Value Deal YTD House Value Deal 31-Aug-10 (US$m) count 31-Aug-10 (US$m) count 1 Credit Suisse 68,957 23 1 Credit Suisse 68,957 23 2 Citigroup 49,723 9 2 BTG Pactual 11,050 19 3 Bank of America Merrill Lynch 23,728 14 3 Bank of America Merrill Lynch 23,728 14 4 Morgan Stanley 16,111 6 4 Citigroup Inc 49,723 9 5 Credit Agricole 11,732 7 5 JPMorgan 8,343 9 6 BTG Pactual 11,050 19 6 Rothschild 9,712 8 7 Caixa Banco de Investimento 11,038 5 7 Credit Agricole 11,732 7 8 UBS Investment Bank 10,768 7 8 UBS Investment Bank 10,768 7 9 Banco Espirito Santo de Investimento 9,886 4 9 Morgan Stanley 16,111 6 10= Mediobanca 9,746 1 10 Deutsche Bank 6,855 6 10= SG 9,746 1 11 Goldman Sachs 4,959 6 12 Rothschild 9,712 8 12 Caixa Banco de Investimento 11,038 5 13 Allen & Company 9,132 2 13 HSBC Bank 2,576 5 14 JPMorgan 8,343 9 14 Banco Espirito Santo de Investimento 9,886 4 15 Deutsche Bank 6,855 6 15 Santander Global Banking and Markets 4,338 4 Source: mergermarket Source: mergermarket

The financial advisor league tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being Latin American-based.

Top 15 legal advisors – LATIN AMERICA value volume

YTD House Value Deal YTD House Value Deal 31-Aug-10 (US$m) count 31-Aug-10 (US$m) count 1 Dewey & LeBoeuf 34,628 3 1 Machado Meyer Sendacz e Opice 13,933 14 2 Skadden Arps Slate Meagher & Flom 18,938 7 2 Demarest e Almeida 11,255 13 3 Allen & Overy LLP 14,742 3 3 Mattos Filho, Veiga Filho, Marrey Jr. e 1,716 13 4 Cleary Gottlieb Steen & Hamilton 14,567 6 Quiroga Advogados 5 Machado Meyer Sendacz e Opice 13,933 14 4 Tozzini Freire Teixeira E Silva Advogados 13,478 12 6 Souza, Cescon Avedissian, Barrieu e 3 5 Pinheiro Neto Advogados 5,523 12 13,697 Flesch Advogados 6 Barbosa, Mussnich & Aragao 5,517 11 7 Tozzini Freire Teixeira E Silva Advogados 13,478 12 7 Estudio Muniz, Ramirez, Perez-Taiman 900 11 8 Uria Menendez 13,269 7 & Olaya Abogados 9 Freshfields Bruckhaus Deringer 13,090 3 8 Azevedo Sette Advogados 489 9 10 Demarest e Almeida 11,255 13 9 Skadden Arps Slate Meagher & Flom 18,938 7 11 Cuatrecasas, Goncalves Pereira 9,746 3 10 Uria Menendez 13,269 7 12= De Brauw Blackstone Westbroek 9,746 1 11 Cleary Gottlieb Steen & Hamilton 14,567 6 12= Garrigues 9,746 1 12 Simpson Thacher & Bartlett 9,495 6 12= Houthoff Buruma 9,746 1 13 Davis Polk & Wardwell 8,300 6 15 Simpson Thacher & Bartlett 9,495 6 14 Latham & Watkins 6,800 6 Source: mergermarket 15 Prieto & Carrizosa 1,323 6 Source: mergermarket

The legal advisor league tables by value and volume have been run from 1 January 2010 to 31 August 2010 and include lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being Latin American-based.

Monthly M&A Insider 09 Trend graphs

LATIN American M&A quarterly trend LATIN AMERICA

value volume

60,000 175

150 50,000

125 40,000

100

30,000

75 Value (US $ m) Value Number of deals 20,000 50

10,000 25

LATIN American M&A quarterly mid-market trend value volume

6,000 100

5,000 80

4,000 60

3,000

Value (US $ m) Value 40 Number of deals 2,000

20 1,000

Moving average trend line

Monthly M&A Insider 10 Trend graphs

LATIN American M&A quarterly private equity trend LATIN AMERICA

value volume

2,500 15

2,000 12

1,500 9 Number of deals

Value (US $ m) Value 1,,000 6

500 3

Latin American buyouts Latin American buyouts

Latin American exits Latin American exits

LATIN American M&A Sector Breakdown YTD 2010

value volume

0.8% 1.8% 2.3% 1.2% 0.6% <0.1% 1.6% 3.6% 0.7% 18.1% Energy, Mining & Utilities 4.4% 20.6% Energy, Mining & Utilities

Consumer 4.8% Consumer

Industrials & Chemicals Industrials & Chemicals 5.6% Business Services Business Services

9.7% Financial Services Financial Services

TMT 8.9% TMT 15.3% 46.8% Leisure Leisure Pharma, Medical & Biotech Pharma, Medical & Biotech 9.8% Agriculture Agriculture 10.1% 1.2% Tr ansport Tr ansport 7.7% Real Estate 13.3% Real Estate 10.5% Construction Construction

Monthly M&A Insider 11 12

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, the C Corporation Potash for keover ta BHP’s hostile US$41.91bn announced in 2010. based NORTH AMERICA NORTH

NORTH AMERICA north america

Dynegy: Prospects remain weak for competing NORTH AMERICA bid, sources say The possibility of a rival bid for Dynegy remains low, despite In July, Blackstone announced it was buying Dynegy in an market speculation, said two sources familiar with the matter all-cash transaction valued at approximately US$4.70bn, and three industry bankers. including debt, and simultaneously selling 3.9GW of natural gas plants to NRG for US$1.36bn. On the back of heavy option trading on a potential bidding war and news reports about another private equity firm looking at NRG initiated conversations with Dynegy and Blackstone in outbidding New York-based The Blackstone Group, Dynegy the late spring, the first source said, noting that additional shares have been trading above the latter’s US$4.50 per share details will be available in the preliminary proxy to be filed offer. Dynegy shares closed at US$5.10 Thursday evening. early next week.

One Dynegy investor said he believes Blackstone has cut a A second Dynegy investor and one industry banker said they sweet deal for itself and is stealing the company by paying a doubted if another bid will emerge, but said another private lower valuation. He said he foresees a bidding war erupting equity firm could make the math work with NRG. for Dynegy, leading to Blackstone ultimately upping its bid. “Dynegy is already highly levered and another financial Prior to Blackstone’s buyout offer, Dynegy was trading at sponsor would increase the enterprise value by a very small US$2.60 and if its growth prospects were strong, it would amount that would translate into a pretty big bump in the have been reflected in the stock price, one of the sources equity price,” the investor said. familiar with the situation said. While the 40-day go-shop period may see other private equity While an interloper cannot be ruled out, the sources familiar firms sign confidentiality agreements, it is unlikely that any and industry sources said other potential buyers had plenty other buyer will trump’s Blackstone’s offer, the first source of opportunity in the past to buy Dynegy. This news service familiar said. The private equity firm retains the right to previously reported that Dynegy has been shopped to both match any competing offers. strategic and private equity players by investment bankers on TPG and KKR - rumored to be bidders - are unlikely to bid numerous occasions. for Dynegy as they are still grappling with the challenges Dynegy’s old coal plants are not a highly valued commodity associated with their buyout of Energy Future Holdings, in the marketplace, the second source familiar said. On formerly TXU, with Goldman Sachs Capital Partners in 2007, top of that, a highly levered balance sheet has added to the the first source and one industry banker said. company’s woes, he said. “People I talked to treat it as a fait accompli,” an industry Furthermore, natural gas prices, which set power prices, attorney familiar with Dynegy said. continue to be sluggish, the first source said. In addition, the economic outlook is not robust, he added.

Monthly M&A Insider 13 DEAL OF THE MONTH

Target: Potash Corporation of Saskatchewan Inc Announced: 18-Aug-10 NORTH AMERICA

Bidder: BHP Billiton Ltd Deal value: US$41.91bn

Seller: - Deal nature: Acquisition, Cross-border, Public

STRUCTURE • Unsolicited Tender Offer: BHP Billiton Limited (BHP), • The acquisition financing facility will preserve BHP’s a Victoria corporation, announced its intention to financial flexibility.B HP remains committed to commence a tender offer to acquire Potash Corporation maintaining a solid A credit rating and a progressive of Saskatchewan Inc. (POT), a Canada corporation, after dividend policy. Potast rejected BHP’s proposal.

• potash, a Canada-based company headquartered RATIONALE in Saskatoon, Saskatchewan, is the world’s largest • The acquisition will accelerate BHP’s entry into the integrated fertilizer and related industrial and feed fertilizer industry and is consistent with BHP’s strategy of products company. becoming a leading global miner of potash. POT’s potash • bHP Billiton, an Australia-based company headquartered mining operations are a natural fit with BHP’s greenfield in Melbourne, Victoria, is the world’s largest diversified land holdings in Saskatchewan, Canada. Furthermore, natural resources company. BHP believes that the proposed acquisition will be earnings per share accretive in the second full fiscal year following consolidation. TERMS • US$130.00 per POT share. CONDITIONS • The offer provides a discount of 9.2% based on POT’s • CA (Canada) closing share price on 17-Aug-10 of US$143.17. • ICA (Canada) • The offer provides a premium of 15.9% based on POT’s closing share price of US$112.15 on 16-Aug-10, one day • HSR (USA) prior to the disclosure of BHP’s offer. • CFIUS (USA)

• The implied equity value of the transaction is • CADE (Brazil) approximately US$38.56bn. • Minimum tender of more than 50.00% of POT shares outstanding required FINANCING • Termination of recently-adopted POT shareholder • The Offer is not subject to any financing condition. rights plan BHP estimates the total amount of funds required to consummate the Offer is approximately US$43.00bn (including funds required to repay or refinance certain POST DEAL DETAIL existing POT indebtedness if necessary). • bHP plans to maintain current levels of employment at • bHP has arranged a new multi-currency term and POT’s Saskatchewan and New Brunswick operations for revolving facility agreement entered into for the purpose, the foreseeable future. BHP also intends to identify and among other things, of meeting the funding requirements propose a Canadian nominee to stand for election to the of the transaction. The terms of the facility will include BHP board. various representations and warranties, affirmative and negative covenants, and events of default customary for credit facilities of this type.

Monthly M&A Insider 14 DEAL OF THE MONTH

Advisors NORTH AMERICA Target/Seller Bidder

Financial Goldman Sachs; Bank of America Merrill Lynch; RBC Financial JPMorgan; BNP Paribas; Royal Bank of Scotland Capital Markets Group; TD Securities; barclays Capital; Santander Global Banking and Markets Legal Skadden Arps Slate Meagher & Flom (Advising Legal Slaughter and May; Cleary Gottlieb Steen & Goldman Sachs, Bank of America Merrill Lynch, RBC Hamilton; Blake, Cassels & Graydon Capital Markets); Stikeman Elliott; Jones Day

mergermarket/dealReporter Intelligence 25-Aug-10 Potash Corporation: Royal Bank of Canada thought to be advising counterbidder – market report

25-Aug-10 Potash Corporation: Rio Tinto not interested; bid increase may trigger vote by BHP Billiton's own shareholders – reports

Monthly M&A Insider 15 Top deals & Expected deals

Top 15 North American announced deals for YTD 31 august 2010 NORTH AMERICA

Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia Deal value Revenue EBITDA P/E 1-day before (US$m) 18-Aug-10 P Potash Corporation of Industrials & BHP Billiton Ltd 10.5 27.9 40 -9.2% 41,908 Saskatchewan Inc Chemicals 22-Apr-10 P Qwest Communications TMT CenturyLink 1.8 5.2 15.9 15.0% 22,153 International Inc 08-Mar-10 C American Life Insurance Financial MetLife American n/a n/a - 15,544 Company Services International Group 25-Feb-10 P Coca-Cola Enterprises Consumer The Coca-Cola Coca-Cola - 12,280 Inc (North American Company Enterprises operations) 21-Feb-10 C Smith International Inc Energy, Mining Schlumberger 1.5 12.7 67.4 18.1% 12,198 & Utilities Limited 19-Jan-10 C The Williams Companies Energy, Mining Williams Partners The Williams - 11,750 Inc (certain gas pipeline & Utilities Companies and domestic midstream businesses) 11-Feb-10 P Allegheny Energy Inc Energy, Mining FirstEnergy Corp 2.6 7.5 12.0 31.6% 8,960 & Utilities 09-Mar-10 P Merial Limited; and Pharma, Merial-Intervet Merck & Co; and - 8,250 Intervet/Schering-Plough Medical & Sanofi-Aventis Animal Health Biotech SA 28-Apr-10 P E.ON US LLC Energy, Mining PPL Corporation E.ON AG - 7,625 & Utilities 11-Mar-10 C Devon Energy Corporation Energy, Mining BP Plc Devon Energy - 7,000 (Assets in the deepwater & Utilities Corporation Gulf of Mexico, Brazil and Azerbaijan) 11-Feb-10 P Airgas Inc Industrials & Air Products & 1.8 10.8 27.1 3.6% 6,834 Chemicals Chemicals 28-Feb-10 C Millipore Corporation Pharma, Merck KGaA 4.1 16.3 34.0 13.3% 6,760 Medical & Biotech 31-Mar-10 P General Growth Real Estate Brookfield Asset n/a n/a [Loss] -7.5% 6,550 Properties Inc (65.00% Management; stake) Fairholme Capital Management LLC; and Pershing Square Capital Management 19-Aug-10 P McAfee Inc TMT Intel Corporation 3.4 16.5 44.0 60.4% 6,511 14-Jun-10 C QEP Resources Inc Energy, Mining Questar Questar 3.8 6.6 29.9 - 6,438 & Utilities Corporation Corporation (Shareholders) C = Completed; P = Pending; L = Lapsed Source: mergermarket

Monthly M&A Insider 16 Top deals & Expected deals

Top 5 North American announced deals of the month (August 2010) NORTH AMERICA

Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia Deal Revenue EBITDA P/E 1-day value before (US$m) 18-Aug-10 P Potash Corporation of Industrials & BHP Billiton Ltd 10.5 27.9 40.0 -9.2% 41,908 Saskatchewan Inc Chemicals 19-Aug-10 P McAfee Inc TMT Intel Corporation 3.4 16.5 44.0 60.4% 6,511 02-Aug-10 P Red Back Mining Inc Energy, Mining & Kinross Gold 21.3 44.3 61.7 17.2% 6,143 (90.60% Stake) Utilities Corporation 17-Aug-10 P Pactiv Corporation Industrials & Reynolds Group 1.8 7.7 13.7 7.5% 5,904 Chemicals Holdings Limited 13-Aug-10 P Dynegy Inc Energy, Mining & Blackstone Group 2.0 6.0 [Loss] 61.9% 4,848 Utilities Holdings LLC C = Completed; P = Pending; L = Lapsed Source: mergermarket

Monthly M&A Insider 17 Top deals & Expected deals

Pipeline of North American expected deals NORTH AMERICA Situation Target company Sector Potential bidder Financial advisor to Seller Market cap/ Comments company bidder (B); target company est. value (T); seller (S) (US$m) Expected Deal Novell TMT Elliott (T) JPMorgan 2,084 Elliott Associates LP (together with Associates funds under common management), a significant institutional stockholder of Novell, offered to purchase the entire company for US$5.75 per share in cash, which implies an enterprise value net of cash of US$1.00bn. The firm sent a letter to the Board of Directors of the Company explaining its offer. Expected Deal Dollar Thrifty Industrials & Avis Budget (B) Citigroup 1,281 Avis Budget Group would like to make a Automotive Group Chemicals Group substantially higher offer to acquire Dollar Thrifty. Dollar Thrifty had recently signed a definitive agreement to be acquired by Hertz for approximately US$41.00 per share. Expected Deal Playboy Enterprise Media The Hefner 187 Playboy Enterprises, Inc. (PEI) announced Family that its board of directors has formed a special committee consisting of Sol Rosenthal and Shing Tao to evaluate and determine the company's response to the proposal made by Hugh Hefner on July 9, 2010 to acquire all of the outstanding shares of Class A and Class B common stock of PEI not currently owned by him for US$5.50 per share in cash. Expected Deal California Pizza Leisure Undisclosed (B) Moelis & 439 California Pizza Kitchen (CPKI) announced Kitchen Bidder Company 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 Mediacom TMT Media's (B) Bank of 475 Mediacom Communications Corporation's Communications founder, American Board of Directors received a non-binding Corporation Chairman and Merrill Lynch, proposal from Mediacom’s founder, CEO, Rocco B. (B) J.P. Morgan Chairman and Chief Executive Officer, Commisso Securities, (T) Rocco B. Commisso, for a going private Barclays Capital transaction. The proposal contemplates the acquisition of all of the Class A and Class B shares of Mediacom common stock not already beneficially owned by Commisso at a price of US$6.00 per share in cash. Expected Deal Galleon Energy Energy, Mining Undisclosed (T) Cormark 410 Galleon Energy’s financial advisors are & Utilities Bidder Securities, GMP already talking with potential buyers. Galleon Securities, announced it had retained GMP Securities, Macquarie Cormark and Macquarie Capital to review Capital Markets strategic alternatives, which will examine Canada 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.

Monthly M&A Insider 18 League tables

Top 20 financial advisors – NORTH AMERICA NORTH AMERICA value volume

YTD House Value Deal YTD House Value Deal 31-Aug-10 (US$m) count 31-Aug-10 (US$m) count 1 Goldman Sachs 228,706 130 1 Goldman Sachs 228,706 130 2 Barclays Capital 162,804 65 2 Morgan Stanley 134,436 95 3 Bank of America Merrill Lynch 148,300 86 3 Bank of America Merrill Lynch 148,300 86 4 JPMorgan 147,871 76 4 Credit Suisse 127,696 84 5 Morgan Stanley 134,436 95 5 JPMorgan 147,871 76 6 Credit Suisse 127,696 84 6 UBS Investment Bank 72,177 70 7 Deutsche Bank 110,150 63 7 Barclays Capital 162,804 65 8 Citigroup 85,809 56 8 Deutsche Bank 110,150 63 9 Lazard 74,933 62 9 Lazard 74,933 62 10 UBS Investment Bank 72,177 70 10 Citigroup 85,809 56 11 RBC Capital Markets 67,506 52 11 RBC Capital Markets 67,506 52 12 TD Securities 52,726 36 12 Jefferies & Company 18,465 49 13 Royal Bank of Scotland Group 44,951 8 13 Rothschild 19,722 47 14 Santander Global Banking and Markets 44,448 3 14 Houlihan Lokey 8,535 43 15 Perella Weinberg Partners 42,993 14 15 TD Securities 52,726 36 16 Evercore Partners 42,500 15 16 KPMG 5,144 32 17 BNP Paribas 42,048 4 17 Macquarie Group Limited 8,020 28 18 Blackstone Group Holdings 35,742 14 18 Loln International 836 27 19 Tudor, Pickering, Holt & Co 26,627 17 19 CIBC World Markets 12,943 25 20 Greenhill & Co 25,628 19 20 Harris Williams & Co 530 25 Source: mergermarket Source: mergermarket

YTD House Value Deal YTD House Value Deal 31-Aug-10 (US$m) count 31-Aug-10 (US$m) count 1 Skadden Arps Slate Meagher & Flom 161,290 89 1 Latham & Watkins 114,303 107 2 Simpson Thacher & Bartlett 155,751 81 2 Jones Day 74,391 107 3 Cleary Gottlieb Steen & Hamilton 143,407 47 3 Kirkland & Ellis 26,313 106 4 Latham & Watkins 114,303 107 4 DLA Piper 7,250 95 5 Sullivan & Cromwell 111,565 65 5 Skadden Arps Slate Meagher & Flom 161,290 89 6 Blake, Cassels & Graydon 103,810 60 6 Simpson Thacher & Bartlett 155,751 81 7 Slaughter and May 93,696 19 7 Weil Gotshal & Manges 90,675 75 8 Davis Polk & Wardwell 92,298 52 8 Sullivan & Cromwell 111,565 65 9 Weil Gotshal & Manges 90,675 75 9 Dewey & LeBoeuf 77,887 62 10 Wachtell, Lipton, Rosen & Katz 86,327 36 10 Gibson Dunn & Crutcher 43,471 61 11 Debevoise & Plimpton 81,217 29 11 Blake, Cassels & Graydon 103,810 60 12 Cravath Swaine & Moore 78,789 32 12 K&L Gates 15,239 58 13 Dewey & LeBoeuf 77,887 62 13 Stikeman Elliott 67,907 55 14 Jones Day 74,391 107 14 Davis Polk & Wardwell 92,298 52 15 Stikeman Elliott 67,907 55 15 Shearman & Sterling 64,864 49 16 Shearman & Sterling 64,864 49 16 Cleary Gottlieb Steen & Hamilton 143,407 47 17 Baker Botts 47,752 26 17 Morgan Lewis & Bockius 9,794 47 18 Herbert Smith/Gleiss Lutz/Stibbe 46,142 20 18 Osler, Hoskin & Harcourt 33,589 44 19 Fried Frank Harris Shriver & Jacobson 45,792 31 19 O'Melveny & Myers 19,427 43 20 Gibson Dunn & Crutcher 43,471 61 20 Mayer Brown 14,770 41 Source: mergermarket Source: mergermarket

The legal advisor league tables by value and volume have been run from 1 January 2010 to 31 August 2010 and lude lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being US or Canadian-based.

Monthly M&A Insider 19 League tables

TOP 5 private equity firms by North American buyouts NORTH AMERICA value volume

YTD House Value Deal YTD House Value Deal 31-Aug-10 (US$m) count 31-Aug-10 (US$m) count 1 Blackstone Group Holdings 10,143 4 1 TPG Capital 3,249 7 2 Silver Lake Partners 6,259 4 2 HIG Capital 149 6 3 Thomas H Lee Partners 4,693 5 3 Thomas H Lee Partners 4,693 5 4 Centerbridge Partners 3,925 3 4 GS Capital Partners 2,769 5 5 The Carlyle Group 3,772 4 5 Ontario Teachers Pension Plan 1,023 5 Source: mergermarket Source: mergermarket

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 US or Canadian-based. The tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals.

TOP 5 private equity firms BY North American exits value volume

YTD House Value Deal YTD House Value Deal 31-Aug-10 (US$m) count 31-Aug-10 (US$m) count

1 Kohlberg Kravis Roberts & Co 4,700 1 1 Highland Capital Partners 471 7 2 Thomas H Lee Partners 4,500 2 2 Battery Ventures 860 5 3 Cerberus Capital Management 4,046 3 3 Mayfield Fund 294 5 4= Hellman & Friedman 3,525 2 4 Foundation Capital 0 5 4= JMI Equity 3,525 2 5 A M Pappas & Associates 713 4 Source: mergermarket Source: mergermarket

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 US or Canadian-based. The tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals.

Monthly M&A Insider 20 Trend graphs

North American M&A quarterly trend NORTH AMERICA

value volume

600,000 1,400

500,000 1,200

1,000 400,000

800 300,000

alue (US $ m) 600 V olume of deals 200,000 V 400

100,000 200

North American M&A quarterly mid-market trend

value volume

40,000 600

35,000 500

30,000

400 25,000

20,000 300 alue (US $ m) V 15,000 Number of deals 200

10,000

100 5,000

Moving average trend line

Monthly M&A Insider 21 Trend graphs

North American M&A quarterly private equity trend NORTH AMERICA

value volume

225,000 275

250 200,000

225 175,000 200 150,000 175

125,000 150

100,000 125 alue (US $ m) Number of deals V 100 75,000 75 50,000 50

25,000 25

North American buyouts North American buyouts

North American exits North American exits

North American M&A Sector Breakdown YTD 2010

value volume

1.6% 1.0% 0.5% 0.1% 0.8% 1.0% 0.6% 3.1% 14.3% Industrials & Chemicals 14.2% 10.8% Industrials & Chemicals 10.0% Financial Services Financial Services 1.4% 1.9% Business Services 1.5% Business Services 7.2% Consumer 3.4% 11.9% Consumer

Energy, Mining & Utilities Energy, Mining & Utilities 14.0% 9.0% TMT TMT

Leisure Leisure 19.0% Tr ansportation Tr ansportation 13.7% 8.3% Pharma, Medical & Biotech Pharma, Medical & Biotech

Construction Construction

Agriculture Agriculture 29.9% 12.1% 8.7% Real Estate Real Estate

Defence Defence

Monthly M&A Insider 22 Trend graphs

North American M&A deal size breakdown NORTH AMERICA value volume

1000 3,000

900 2,500 800

700 2,000 600

500 1,500

alue (US$bn) 400 V Number of deals 1,000 300

200 500 100

> US$501m > US$501m

US$251m-US$500m US$251m-US$500m

US$101m-US$250m US$101m-US$250m

US$15m-US$100m US$15m-US$100m

US$5m-US$14.9m US$5m-US$14.9m

Value not disclosed

Monthly M&A Insider 23 24

airn airn

C airn India India airn tor greed C airn India India airn C Monthly M&A Insider Monthly 405 (US$8.70) per per (US$8.70) 405 NR akistan, Sri Lanka and and Lanka Sri akistan, his additional cost is is cost additional his 355 (US$7.60) per per (US$7.60) 355 P T NR e a ed hav olv 50 lower than the sale share share sale the than lower 50 50 (US$1.10) more than the the than more (US$1.10) 50 esources’ subsidiary Sesa Sesa subsidiary esources’ nergy has agreed to stay away away stay to agreed has nergy R E NR NR nergy to add and realise value for its its for value realise and add to nergy E airn airn C (JAL), who filed an Airlines (JAL), airn airn C airn India Limited, the listed Indian oil and and oil Indian listed the Limited, India airn ap C esources will acquire more than 40.00% of of 40.00% than more acquire will esources nergy. Depending on the result of the open open the of result the on Depending nergy. R E he pricing of Vedanta’s open offer for for offer open Vedanta’s of pricing he urthermore, investors also criticised that there is is there that criticised also investors urthermore, T F inv tion the banks airn airn C arrier, J g c esources’ position as a natural resources leader in India; India; in leader resources natural a as position esources’ oa, the Indian iron ore producer, will make a mandatory mandatory a make will producer, ore iron Indian the oa, airn India share, which is I is which share, India airn airn India directly at an offer price of I of price offer an at directly India airn airn India share, which is I is which share, India airn he proposed acquisition will significantly enhance Vedanta Vedanta enhance significantly will acquisition proposed he has come under fire from the minority shareholders of of shareholders minority the from fire under come has of lack the constitutes that and premium control a of offer no price. value’ a ‘fair India as it seems to be unfair and a show a disregard for for disregard a show a and unfair be to seems it as India minorities. shareholders. However, there are a various concerns which which concerns various a are there However, shareholders. the deal. to some barriers may constitute Vedanta proposal, the Under G of 20.00% of maximum a acquire to offer open diluted shares at an offer price of I of price offer an at shares diluted C offer to to offer offer, Vedanta Vedanta offer, C C price offered in the mandatory offer. offer. mandatory the in offered price Cairn and between arrangement the non-compete meant for which under Vedanta, from oil and gas exploration in India, India, in exploration gas and oil from price the regarding arisen have questions However, Bhutan. differential. Vedanta Resources entering the Energy sector sector Energy the entering Resources Vedanta the UK-listed Plc, Resources 2010, Vedanta On 16 August billionaire by controlled company mining and metals Indian a 51.00%- acquire to proposal its Anil Agarwal, announced in stake 60.00% U K-based the listed Plc, Energy Cairn from gas company, between of consideration cash a for company, gas and oil US$8.50bn-US$9.60bn. T R allow will it while a s reports, and its administr new ccording to anese fla ap will mark mark will C ) has decided decided has ) I C I ET ET any debt a any and J he plan stipulates stipulates plan he T is a semi-government semi-government a is C I ET ic cif he he ia hs of negot anuary 2010, after mont T an Airlines a apital, are scheduled to be merged merged be to scheduled are apital, orporation of Japan ( Japan of orporation C ap C y in J he administrator will be allowed, upon the the upon allowed, be will administrator he T r J art fo t. uring plan on 31 August. ct ved the restru maj a ted comp or lis ormerly urnaround Initiative Initiative urnaround appro he comp renounce 87.50% of t to for bankruptc for F New st a personnel cut of 33.0% from 48,714 to 32,600 by the the by 32,600 to 48,714 from 33.0% of cut personnel a required be will company the but year, fiscal this of end of long The termination pay additional compensation. to with the along will be implemented routes international increasing the meet to planes mid-size of introduction which will also add short- Asian travel, demand of internal the by injection cash the Although cost. term agency with funding from both the government and private- both the government agency with funding from debt- restructure to which aims financial institutions, sector years. within three laden companies the undertaking is Airlines Japan meantime, the In including well, as operations business its of restructuring and domestic unprofitable of termination and layoffs to hope a in profitability the restore to routes, international implementation the However, year. next by debt the refinance cost. additional bears also plan the of Airlines Japan of future the Airlines, Japan for era new the uncertain. remains still Y350bn to hold the entire stake in Japan stake hold the entire of JPY350bn to a total inject to operations, airline of licensing the to Due group. Airlines will JAL, of subsidiary former a International, Airlines Japan and JAL while group; whole the of entity surviving the become JAL arm, financial its future. the in party, third a to shares additional issue to approval, court new the be will who to as yet made been has decision no but company. the for sponsor nterprise the Enterprise by the company, Under the plan announced T &A report on report &A M arket A mergerm ASIA-p

ASIA-Pacific ASIA-pacific

Besides, there is an issue regarding Vedanta Resources’ ASIA-PA experience in oil and gas industry. Cairn India is a company principally engaged in oil and gas, while Vedanta Resources is

C I F a company principally engaged in metals and mining. Vedanta Resources has no track record in energy and no previous experience in oil and gas. The announcement has surprised investors in respect with Vedanta Resources’ potential strategic shift from metals and mining into oil and gas, and it raises the question of whether such an inexperienced company should takeover such a crucial energy asset.

Cairn India currently has interests in 10 blocks in India and one in Sri Lanka. It has three in production, including the Mangala field inR ajasthan, which began production last year, and is the biggest onshore energy resource discovered in the past two decades in India.

Monthly M&A Insider 25 26 o Ltd Ltd o C rust and and rust T Monthly M&A Insider Monthly

rust & Banking Banking & rust T rust Holdings Inc (minimum Holdings rust rade Commission. rade air T ommission, USA. Commission, rade rust Holding Inc. Inc. Holding rust he Sumitomo Sumitomo he air T T T rust Holdings will issue 2,495,111,627 new new 2,495,111,627 issue will Holdings rust 24-Aug-10 US$9.27bn Recommended T itsui itsui M itsui itsui M huo huo C huo huo (minimum two thirds vote cast required). cast vote thirds (minimum two Chuo Mitsui T from Approval required). cast vote thirds two Agency, Japan. Financial Services from Approval Japan F from Approval F from Approval PRC. of Commerce, Ministry from Approval Securities and Exchange from Approval ommission, USA. Commission, Commission. European from Approval shares to eligible shareholders in Sumitomo Sumitomo in shareholders eligible to shares its existing to a 60.10% dilution Banking, representing capital. share of from Approval Deal nature: Announced: Deal value:

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Y778.73bn. (US$9.20bn, using the closing exchange rate rate exchange closing the using (US$9.20bn, Y778.73bn. huo huo he consideration values Sumitomo Sumitomo values consideration he he transaction is in the form of a share swap merger. merger. swap share a of form the in is transaction he Sumitomo as renamed be will entity surviving he J of price offer implied he P rust Holdings, Inc. Inc. Holdings, rust share. Banking and rust

J of US$1: JPY84.58 on 24-Aug-10). and Banking on 24-Aug-10, the last trading day before before day trading last the 24-Aug-10, on Banking and after made was announcement (the announcement, the closed). market price closing the upon 2.34% of discount a represents It Sumitomo of announcement. discussion board the before day trading It is par to J to par is It closing price of Chuo Mitsui T price closing o Ltd, its domestic listed trust banking company, have have banking company, trust listed Co Ltd, its domestic merge. to agreed 1.49 1.49 T T banking company, and and company, banking arget: arget: t

t t t c eller: Seller: T Bidder: • • • • • TERMS • • STRUC •

xx H THE MONT AL OF DE

ASIA-PACIFIC DEAL OF THE MONTH

Exit multiples – Y/E 31-Dec-09 Premium analysis ASIA-PA Multiples Value (JPYm) Offer price per share (JPY) 464.88

Revenue n/a n/a 1 day before 468 C I F EBITDA n/a n/a 1 month before 455 EBIT n/a n/a 1 day after 467 Earnings 15.4x 53,180 Pre-rumour n/a

Advisers Target/Seller Bidder Financial UBS Investment Bank; Daiwa Securities Group Financial JPMorgan

Legal Sullivan & Cromwell; Mori Hamada & Matsumoto; Legal Nagashima Ohno & Tsunematsu Advising UBS Investment Bank: Shearman & Sterling PR - PR -

mergermarket/dealReporter Intelligence

15-Apr-10 Chuo Mitsui/Sumitomo Trust likely to establish share swap ratio by autumn; EGM in December 26-Aug-10 Sumitomo Trust/Chuo Mitsui (yet to complete competition filings)

Timetable and expected events Offer timetable Date Completed Notes

Merger Agreement 24-Aug-10 Y From company, Board Meeting for the approval of the merger document

Effective Date 01-Apr-11 From company; Effective date for the merger

Settlement Date Reference issue of 2,495,111,627 new shares to The Sumitomo Trust & Banking Co Ltd shareholders

Monthly M&A Insider 27 Top deals & Expected deals

Top 15 Asia-Pacific announced deals for YTD 31 August 2010 ASIA-PA

Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia Deal Revenue EBITDA P/E 1-day before value (US$m) C I F 01-Mar-10 L American International Financial Prudential Plc American n/a n/a 20.2 - 35,500 Assurance Company Services International Limited Group Inc 24-Aug-10 P The Sumitomo Trust & Financial Chuo Mitsui Trust n/a n/a 17.1 -0.7% 9,267 Banking Co Ltd Services Holdings, Inc 16-Aug-10 P Cairn India Limited Energy, Mining Vedanta Resources 33.0 64.3 61.7 - 9,177 (60.00% stake) & Utilities Plc 30-Mar-10 L AXA Asia Pacific Financial AXA SA AXA Asia Pacific n/a n/a 24.7 - 8,645 Holdings (Asian Services Holdings Limited businesses) 04-May-10 C Lihir Gold Limited Energy, Mining Newcrest Mining 8.5 19.9 54.2 9.5% 8,286 & Utilities Limited 10-Mar-10 P Shanghai Pudong Financial China Mobile Group n/a n/a 11.1 -13.1% 5,831 Development Bank Services Guangdong Co Ltd (20.00% stake) 29-Jul-10 P Sanyo Electric Co Ltd Industrials & Panasonic 0.7 11.0 (loss) -7.4% 4,839 (49.95% stake) Chemicals Corporation 29-Jul-10 P Panasonic Electric Industrials & Panasonic 0.6 9.9 103.2 -1.2% 4,698 Works Ltd (49.00% stake) Chemicals Corporation 31-Aug-10 P Japan Airlines Corp Transport Enterprise 0.2 6.1 (loss) 4,165 Turnaround Initiative Corporation of Japan 25-Jan-10 C Jupiter TMT KDDI Corporation Liberty Global 3.6 8.3 32.6 64.5% 4,014 Telecommunications Co Inc Ltd (37.80% stake) 21-May-10 P Piramal Healthcare Pharma, Abbott Laboratories Piramal 8.3 - 3,720 Solutions business Medical & Healthcare Biotech Limited 30-Mar-10 L AXA Asia Pacific Financial National Australia n/a n/a 21.8 1.3% 3,579 Holdings Limited Services Bank Limited 30-Aug-10 P Daewoo International Business POSCO KAMCO 0.5 30.4 37.9 53.5% 3,547 Corporation (68.15% Services stake) 22-Mar-10 C Arrow Energy Limited Energy, Mining Royal Dutch Shell; 36.9 7.4 10.5 -11.2% 3,352 & Utilities and Petrochina 18-May-10 C Denway Motors Limited Automotive Guangzhou 62.1 (loss) 23.6 53.0% 3,293 (62.10% stake) Automobile Group Co Ltd C = Completed; P = Pending; L = Lapsed Source: mergermarket

Top 5 Asia-Pacific announced deals of the month (August 2010)

Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia Deal Revenue EBITDA P/E 1-day before value (US$m) 24-Aug-10 P The Sumitomo Trust Financial Chuo Mitsui Trust n/a n/a 17.1 -0.7% 9,267 & Banking Co Ltd Services Holdings, Inc 16-Aug-10 P Cairn India Limited Energy, Mining Vedanta Resources Plc 33.0 64.3 61.7 - 9,177 (60.00% stake) & Utilities 31-Aug-10 P Japan Airlines Corp Transport Enterprise Turnaround 0.2 6.1 (loss) 4,165 Initiative Corporation of Japan 30-Aug-10 P Daewoo International Business POSCO KAMCO 0.5 30.4 37.9 53.5% 3,547 Corporation (68.15% Services stake) 27-Aug-10 P Intoll Group Transport Canada Pension Plan 95.7 4.1% 2,922 Investment Board C = Completed; P = Pending; L = Lapsed Source: mergermarket

Monthly M&A Insider 28 Top deals & Expected deals

Pipeline of Asia-Pacific expected deals ASIA-PA

Situation Target company Sector Potential bidder Financial adviser to Seller company Market cap/ Comments company bidder (B); target est. value (T); seller (S) (US$m) C I F Expected Transurban Construction Canada Lazard (T); UBS 6,500 Transurban Group in November received a Deal Group Pension Plan Investment conditional and non-binding joint takeover Investment Bank (T); proposal from CPPIB and OTPP. The Board Board (CPPIB); Goldman Sachs then evaluated the proposal and rejected it and Ontario (B); JPMorgan on the original terms. The Future Fund Board Teachers’ (B) of Guardians has subsequently considered Pension Plan supporting the proposal by CPPIB and OTPP. (OTPP) Transurban continues to insist a bona fide proposal is needed before talks can proceed. In May 2010, CPPIB and OTPP raised its offer from AUD5.25 per Transurban share to AUD5.57 per share. However, the revised takeover proposal was again rejected byTransurban, as Transurban considered that their offer was still too low. Expected Wai Chun Consumer Undisclosed 404 Wai Chun Mining has signed a memorandum of Deal Mining bidder understanding in relation to the possible issue of Industry Group new shares. This may lead to a change in control Co. Ltd. of the company. Expected Boom Transport Archer Capital 200 Boom Logistics, the Australian-listed crane hire Deal Logistics and McAleese business, has received a takeover offer from Group Archer Capital and McAleese Group. Boom Logistics has received two conditional proposals from Archer in April. The company rejected the first bid outright due to its conditionality. Boom Logistics has not yet formalised its response to the second offer of AUD0.52 per Boom Logistics share. Expected Redflex TMT Macquarie 206 Redflex Holdings Limited received an indicative, Deal Holdings Group Limited non-binding and confidential proposal to acquire Limited all of the issued capital of Redflex by scheme of arrangement from a wholly owned subsidiary of Macquarie Group Limited at a price of AUD2.50 per share. Expected SGIS Songshan Industrials & Guangdong 932 SGIS Songshan will raise up to CNY2.5bn from Deal Co Ltd Chemicals Hengjian private placement of 570m new shares. Heng Investment Jian Investment will acquire up to 341.69m Holding Co Ltd new shares in the company for a maximum of CNY1.5bn (US$220.6m) and become the second largest shareholder. Expected Indophil Energy, Undisclosed 339 After China’s Zijin withdrew an offer in July, Deal Resources NL Mining & bidder Indophil is still targeted as a takeover candidate. Utilities Indophil reportedly confirmed talks over a potential corporate transaction.

Expected deals based on confirmed announcements by companies involved

Monthly M&A Insider 29 League tables

Top 20 financial advisers – Asia-Pacific excl Japan ASIA-PA value volume

YTD House Value Deal YTD House Value Deal C I F 31-Aug-10 (US$m) count 31-Aug-10 (US$m) count 1 JPMorgan 86,651 27 1 Goldman Sachs 77,093 40 2 Goldman Sachs 77,093 40 2 Deloitte 9,367 36 3 Bank of America Merrill Lynch 76,177 23 3 Ernst & Young 8,561 36 4 Barclays Capital 62,871 13 4 UBS Investment Bank 38,533 35 5 BNP Paribas 58,166 13 5 KPMG 7,845 31 6 Royal Bank of Scotland Group 52,532 10 6 Deutsche Bank 32,630 29 7 RBC Capital Markets 45,541 7 7 Morgan Stanley 45,419 28 8 Morgan Stanley 45,419 28 8 JPMorgan 86,651 27 9 Santander Global Banking and Markets 42,967 2 9 Credit Suisse 28,144 27 10 TD Securities 42,187 2 10 PricewaterhouseCoopers 2,909 24 11 UBS Investment Bank 38,533 35 11 Bank of America Merrill Lynch 76,177 23 12 Deutsche Bank 32,630 29 12 Macquarie Group 28,236 22 13 Macquarie Group 28,236 22 13 Rothschild 16,362 20 14 Credit Suisse 28,144 27 14 CIMB Group 12,443 19 15 HSBC Bank 27,471 15 15 HSBC Bank 27,471 15 16 Standard Chartered 26,256 11 16 Citigroup 10,171 15 17 Nomura Holdings 19,496 13 17 Barclays Capital 62,871 13 18 Rothschild 16,362 20 18 BNP Paribas 58,166 13 19 China International Capital Corporation 16,180 12 19 Nomura Holdings 19,496 13 20 Lazard 14,587 8 20 China International Capital Corporation 16,180 12 Source: mergermarket Source: mergermarket

The financial adviser league tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being Asia-Pacific-based, excluding Japan.

Top 20 legal advisers – Asia-Pacific excl Japan value volume

YTD House Value Deal YTD House Value Deal 31-Aug-10 (US$m) count 31-Aug-10 (US$m) count 1 Slaughter and May 85,588 13 1 AZB & Partners 28,834 46 2 Cleary Gottlieb Steen & Hamilton 77,858 5 2 Freehills 28,389 44 3 Skadden Arps Slate Meagher & Flom 59,549 19 3 DLA Piper 1,544 44 4 Stikeman Elliott 53,606 8 4 Mallesons Stephen Jaques 33,088 41 5 Herbert Smith/Gleiss Lutz/Stibbe 50,267 10 5 Baker & McKenzie 14,386 37 6 Blake, Cassels & Graydon 48,740 6 6 Minter Ellison 10,658 37 7 Debevoise & Plimpton 46,160 3 7 WongPartnership 8,944 33 8 Norton Rose 45,383 30 8 Norton Rose 45,383 30 9 Jones Day 44,488 25 9 Kim & Chang 7,378 27 10 Simpson Thacher & Bartlett 38,791 8 10 Jones Day 44,488 25 11 Sullivan & Cromwell 38,427 6 11 Allens Arthur Robinson 28,360 25 12 Cravath Swaine & Moore 36,988 2 12 Linklaters 26,712 23 13 Weil Gotshal & Manges 36,529 6 13 Blake Dawson 11,833 23 14 Mallesons Stephen Jaques 33,088 41 14 Allen & Gledhill 7,323 22 15 Davis Polk & Wardwell 31,105 9 15 Clayton Utz 6,804 22 16 AZB & Partners 28,834 46 16 Freshfields Bruckhaus Deringer 6,604 22 17 Freehills 28,389 44 17 Amarchand & Mangaldas & Suresh A 6,106 22 18 Allens Arthur Robinson 28,360 25 Shroff & Co 19 Linklaters 26,712 23 18 Clifford Chance 4,179 20 20 Allen & Overy 18,953 19 19 Skadden Arps Slate Meagher & Flom 59,549 19 Source: mergermarket 20 Allen & Overy 18,953 19 Source: mergermarket

The legal adviser league tables by value and volume have been run from 1 January 2010 to 31 August 2010 and include lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being Asia-Pacific-based, excluding Japan. Monthly M&A Insider 30 League tables

Top 15 Financial Advisers – Japan ASIA-PA value volume C I F YTD House Value Deal YTD House Value Deal 31-Aug-10 (US$m) count 31-Aug-10 (US$m) count 1 Nomura Holdings 35,109 50 1 Nomura Holdings 35,109 50 2 JPMorgan 17,158 9 2 Mizuho Financial Group 2,723 27 3 Daiwa Securities Group 16,533 23 3 Daiwa Securities Group 16,533 23 4 UBS Investment Bank 13,321 3 4 Morgan Stanley 7,718 21 5 Morgan Stanley 7,718 21 6 Sumitomo Mitsui Financial Group 2,071 19 6 Deutsche Bank 7,686 4 5 GCA Savvian Corporation 1,503 12 7 Bank of America Merrill Lynch 6,104 4 7 PricewaterhouseCoopers 1,021 11 8 Citigroup 5,467 5 8 JPMorgan 17,158 9 9 ABeam M&A Consulting Corp Fin 5,228 2 9 Goldman Sachs 4,328 9 10 Goldman Sachs 4,328 9 10 KPMG 833 8 11 Greenhill & Co 3,510 3 11 Ernst & Young 609 6 12 Lazard 3,390 3 12 Citigroup 5,467 5 13 Centerview Partners 3,301 1 13 Deutsche Bank 7,686 4 14 Sangyo Sosei Advisory 3,299 2 14 Bank of America Merrill Lynch 6,104 4 15 Mizuho Financial Group 2,723 27 15 Rothschild 633 4 Source: mergermarket Source: mergermarket The financial adviser league tables by value and volume have been run from 1 January 2010 to 31 July 2010 and exclude lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being Japan-based.

Top 15 Legal Advisers – Japan value volume

YTD House Value Deal YTD House Value Deal 31-Aug-10 (US$m) count 31-Aug-10 (US$m) count 1 Mori Hamada & Matsumoto 27,490 45 1 Mori Hamada & Matsumoto 27,490 45 2 Nagashima Ohno & Tsunematsu 23,513 26 2 Nagashima Ohno & Tsunematsu 23,513 26 3 Shearman & Sterling 21,891 11 3 Nishimura & Asahi 7,517 21 4 Sullivan & Cromwell 9,957 6 4 Anderson Mori & Tomotsune 6,933 14 5 Skadden Arps Slate Meagher & Flom 8,381 8 5 TMI Associates 2,115 12 6 Nishimura & Asahi 7,517 21 6 Shearman & Sterling 21,891 11 7 Anderson Mori & Tomotsune 6,933 14 7 Morrison & Foerster 4,333 11 8 Latham & Watkins 5,235 5 8 Baker & McKenzie 1,409 9 9 Gibson Dunn & Crutcher 5,131 3 9 Davis Polk & Wardwell 859 9 10 Kikkawa Law Offices 4,774 2 10 Skadden Arps Slate Meagher & Flom 8,381 8 11 Morrison & Foerster 4,333 11 11 Sullivan & Cromwell 9,957 6 12 Allen & Overy 3,838 5 12 Linklaters 3,449 6 13 Dewey & LeBoeuf 3,666 2 13 Latham & Watkins 5,235 5 14 Freshfields Bruckhaus Deringer 3,526 5 14 Allen & Overy 3,838 5 15 Linklaters 3,449 6 15 Freshfields Bruckhaus Deringer 3,526 5 Source: mergermarket Source: mergermarket

The legal adviser league tables by value and volume have been run from 1 January 2010 to 31 July 2010 and include lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being Japan-based.

Monthly M&A Insider 31 Trend graphs

Asia-Pacific M&A quarterly trend ASIA-PA

value volume C I F 200,000 800

700

150,000 600

500

100,000 400 alue (US$m) V 300 Number of deals

50,000 200

100

Asia-pacific M&A quarterly mid-market trend

value volume

35,000 500

30,000 400

25,000

300 20,000

15,000 alue (US$m) 200 V Number of deals

10,000

100 5,000

Moving average trend line

Monthly M&A Insider 32 Trend graphs

Asia-Pacific M&A quarterly private equity trend ASIA-PA

value volume C I F 25,000 100

20,000 80

15,000 60 alue (US$m)

V 10,000 40 Number of deals

5,000 20

Asia-Pacific Asia-Pacific buyouts buyouts

Asia-Pacific Asia-Pacific exits exits

Asia-Pacific M&A Sector Breakdown YTD 2010

value volume

1.2% 2.5% 2.5% 2.9% 7.8% 14.5% 4.6% Industrials & Chemicals 20.1% Industrials & Chemicals TMT 4.7% TMT 5.5% Consumer 5.1% Consumer 2.2% 9.8% Energy, Mining & Utilities Energy, Mining & Utilities 5.3% Financial Services 6.1% Financial Services

Business Services Business Services 3.8% 13.6% 7.2% Pharma, Medical & Biotech Pharma, Medical & Biotech 8.1% Construction Construction

Real Estate Real Estate

20.5% Tr ansport Tr ansport 9.2% 19.7% 11.7% Leisure Leisure 11.3% Agriculture Agriculture

Monthly M&A Insider 33 Trend graphs

ASIA-PACIFIC M&A GEOGRAPHIC BREAKDOWN YTD 2010 ASIA-PA value volume C I F

1.8% 1.0% 5.8% 2.3% 5.3% 2.0% 19.0% China China 4.8% 3.6% 27.2% Australia Australia 3.2% 4.3% Japan Japan

South Korea 5.2% South Korea 7.1% India India

Hong Kong Hong Kong 10.1% Singapore Singapore 10.9% 21.9% Malaysia Malaysia

Indonesia 15.5% Indonesia

5.7% Taiwan 10.4% Taiwan

Other Other 18.5% 14.3%

ASIA-PACIFIC M&A DEAL SIZE BREAKDOWN

value volume

300 1,500

250 1,200

200 900

150

alue (US$bn) 600 V Number of deals 100

300 50

> US$501m > US$501m

US$251m-US$500m US$251m-US$500m

US$101m-US$250m US$101m-US$250m

US$15m-US$100m US$15m-US$100m

US$5m-US$14.9m US$5m-US$14.9m

Value not disclosed

Monthly M&A Insider 34 A mergermarket M&A report on EUROPE

Bob Diamond, Barclays Capital and the universal banking model europe Barclays plc, the UK banking group, has announced that Bob Diamond, the current Head of Barclays Capital, is to succeed John Varley as the group’s CEO; a move that could provide a platform for further investment bankers to take over the leadership of so-called universal banks.

The Financial Times reported that the Chelsea Football Club- This trend has continued. Barcap has advised on €147.2bn supporting American will be receiving a total remuneration worth of deals globally so far this year, maintaining their sixth package of about £11.5m as CEO of Barclays, down by about place in the standings. The firm has secured mandates for £6.7m from his current package as President of Barclays the Anglo-Australian BHP Billiton’s €32.61bn hostile takeover Capital; although his base salary will be up from £0.25m to offer for the Canadian PotashCorp and the €16.66bn Qwest/ £1.35m per annum. As expected, the revelation has been CenturyLink merger. More importantly, however, Barcap was seized upon by UK politicians who have instantly conveyed second only to Goldman Sachs in North America for the same their populist objection to the size of Diamond’s pay packet, period, advising on €123.90bn worth of deals. This is arguably positioning it against the backdrop of wider difficulties in the the biggest shake-up of Wall Street’s establishment by a UK economy and the looming public spending cuts London-headquartered bank. and redundancies. Barclays plc’s shareholders must also have been thanking However, a much harder challenge lies ahead for Barclays Diamond as Barcap alone made up 40.0% of the group’s total plc as the UK parliamentary banking commission, led by Sir revenue in 2009; £11.60bn out of £29.10bn total - dwarfing its John Vickers, may recommend radical reforms to the banking UK retail bank’s revenue of £4.00bn. This could be considered system. The changes could force the splitting of investment to be an example of how the universal banking model does banking operations from traditional depository banking work: where the investment banking operation is propping up businesses and if the UK introduces such a regime, it would and cross-subsidising the traditional depository business as signal the end of the universal banking business model. the latter struggles with an unfavourable trading environment.

Barclays Capital (Barcap) has grown from a relatively Barcap’s rapid growth in M&A was due to the ‘cherry-picking’ mediocre European dealmaker to a global household name of Lehman Brothers’ North American operations in 2008, a in the M&A industry under Diamond’s watch. Between year after fortuitously losing out to the RBS-led consortium 1 January to 31 August 2007, the M&A boom year, Barcap bid for control of ABN AMRO. It also explains why the M&A only managed to come in the top 70 of global financial practice is bigger in the US than Europe. advisers league tables, advising on only €8.50bn worth of Diamond’s recent experience of cherry picking may haunt deals. However, during the same period in 2009, when the him, if and when he has to make tough decisions for the bottom was falling out of the market, the firm was up to sixth business under the proposed UK banking regulatory regime. place, advising on M&A deals totalling €98.40bn worldwide. As he plans his return to London from New York, he might have to start spending his spare time picking the winners within the Barclays business.

Monthly M&A Insider 35 EUROPE

Europe continues to see mega M&A deals in the EUROPE Energy, Mining & Utilities sector August 2010 confirmed that further mega-consolidations in the European Energy, Mining & Utilities sector are still occurring, following a strong July. The sector now made up 27.1% of total M&A deal value for Europe in the year-to-date, €70.20bn out of €260.10bn in total. Strikingly, for August alone, the sector made up 66.0% of Europe’s total deal value, booking €28.40bn.

The largest chunk of this number, €20.70bn, is the reverse takeover of GDF Suez Energy International (GDF EI) by International Power plc, the UK power producer. GDF Suez SA, the target’s parent, is taking a 70.00% stake in International Power through a capital increase in return for GDF EI assets it contributes. The deal is surely a significant breadwinner for Morgan Stanley, JPMorgan Cazenove, Nomura, Goldman Sachs, BNP Paribas, Blackstone, Rothschild, and Ondra Partners this year.

Another high-profile deal in the sector is Korea National Oil Corporation’s (KNOC) €2.28bn hostile takeover offer for the LSE-listed Dana Petroleum plc. It is the first time that an Asian state-owned company has made a hostile offer for a foreign public company. Dana’s board is asking for more than £18.00 per share more than KNOC is offering its shareholders. However, the Financial Times has been reporting that an improved offer is not expected and KNOC is likely to succeed in closing the deal at the current offer price as a significant number of Dana’s institutional investors are willing to accept the offer.

Monthly M&A Insider 36 DEAL OF THE MONTH

Target: GDF Suez Energy International Announced: 10-Aug-10 EUROPE

Bidder: International Power Plc Deal value: €20.70bn

Seller: GDF Suez SA Deal nature: Cross-border, Public, Reverse takeover

• gDF Suez SA has agreed to contribute its subsidiary, Rationale: GDF Suez Energy International, and other assets into • Both GDF Suez EI and International Power are International Power Plc (IPR), in return for a 70.00% stake strategic fit; in the company, effected through a capital increase. • Both complement each other in terms of geographical presence, fuel mix, and power generation assets portfolio. Terms: • Based on the total 1,523.3m shares currently outstanding Inducement Fee: in IPR, GDF Suez will be issued with 3,554.37m new IPR shares, representing 70.00% of equity post capital • Both parties have agreed a €60m break-up fee for increase, in return for the assets it contributes. either side.

• Based on IPR closing price of £380.00 on 9 August 2010, the assets contributed are valued at about £13.51bn. Expected Completion: • By the end of 2010 or early 2011. • the assets’ net debt of £3.70bn will be carried over to IPR’s balance sheet. Post Deal Details: • the current IPR shareholders will remain with 30% of the combined entity, and receive special dividend of 92 pence • the new IPR will be listed at London Stock Exchange, per share in cash. This will increase IPR’s pro-forma net application to UK Listing Authority has been made. debt as at 30 June 2010 by about £1.40bn. Conditions: Assets Contributed: • IPR shareholders’ approval;

• gDF Suez Energy International (EI); • regulatory approvals;

• gDF Suez’s UK assets including Teeside, Shotton, Scotia • Consultation with GDF Suez employees. and GDF Suez Energy UK;

• and GDF Suez’s Turkish assets comprising Izgaz.

Monthly M&A Insider 37 DEAL OF THE MONTH

Exit multiples – Y/E 31-Dec-09 Premium analysis EUROPE Multiples Value (€m) Offer price per share (€) n/a

Revenue - - 1 day before n/a EBITDA 10.4x 1,996 1 month before n/a EBIT 14.4x 1,435 1 day after n/a Earnings - - Pre-rumour n/a

Advisers Target/Seller Bidder Financial Goldman Sachs Financial Morgan Stanley BNP Paribas JPMorgan Cazenove Blackstone Group Holdings Nomura Holdings Rothchild Ondra Partners Legal Bredin Prat Legal Clifford Chance Linklaters PR Brunswick Group PR Finsbury Group

Mergermarket/dealReporter Intelligence 09-Aug-10 International Power/GDF: Joint deal announcement expected tomorrow

05-Aug-10 International Power/GDF undecided on ‘welcome bonus’ for merger

22-Jul-10 IPR/GDF Suez: EU competition approval unlikely to raise major issues

19-Jul-10 International Power: GDF Suez aiming to take stake over 50.00%

12-Feb-10 GDF Suez more likely to take two-step view on International Power than full cash takeover in short term

Monthly M&A Insider 38 Top deals & Expected deals

Top 15 European announced deals YTD 31 august 2010 EUROPE

Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia Deal value Revenue EBITDA P/E 1-day before (€m) 10-Aug-10 P GDF Suez Energy Energy, Mining International Power GDF Suez SA 10.4 20,701 International & Utilities Plc 04-Jan-10 C Alcon Inc (52.00% Pharma, Novartis AG Nestle SA 8.0 20.9 26.9 9.5% 18,247 Stake) Medical & Biotech 30-Jun-10 P OJSC Polyus Gold Energy, Mining KazakhGold Group 9.8 22.8 35.0 5.4% 8,367 & Utilities Limited 05-Jan-10 C NK Russneft OAO Energy, Mining Mikhail Gutseriyev En+ Group Ltd 4,595 & Utilities (Private Investor) 14-Jun-10 C JSC Uralkali Industrials & Kaliha Finance Madura Holding 10.5 21.7 37.9 21.4% 4,254 (53.20% Stake) Chemicals Limited; Aerellia Limited Investments Limited; and Becounioco Holdings Limited 18-Mar-10 C Ratiopharm Pharma, Teva Pharmaceutical VEM 2.6 4,200 GmbH Medical & Industries Ltd Vermogensverwaltung Biotech GmbH 27-Jul-10 P Tomkins Plc Industrials & Canada Pension Plan 1.3 18.7 5.7% 3,672 Chemicals Investment Board; and Onex Partners LP 08-Apr-10 P Iberia Lineas Transportation British Airways Plc 0.9 (loss) (loss) 0.9% 3,598 Aereas de Espana SA 24-Jun-10 P AXA SA (UK life Financial Resolution Limited AXA SA n/a 20.4 0.9% 3,330 and pensions Services businesses) 20-Jan-10 C Areva T&D SA Industrials & Schneider Electric AREVA SA 0.6 3,180 Chemicals SA; and Alstom SA 21-Jul-10 P SSL International Consumer Reckitt Benckiser Plc 3.4 19.5 37.4 32.8% 3,046 Plc 24-Feb-10 C Edenred SA Business Accor SA Accor SA 3.7 9.2 2,937 Services (Shareholders) 22-Apr-10 C Arriva Plc Transportation Deutsche Bahn AG 0.8 7.7 14.6 1.2% 2,819 23-Jun-10 P Cognis GmbH Industrials & BASF SE Permira; GS Capital 0.9 7.5 28.0 2,408 Chemicals Partners; and SV Life Sciences 20-Aug-10 P Dana Petroleum Energy, Mining Korea National Oil 5.4 11.9 78.6 6.2% 2,269 Plc & Utilities Corporation C = Completed; P = Pending; L = Lapsed Source: mergermarket

Top 5 European announced deals of the month (august 2010)

Monthly M&A Insider 39 Top deals & Expected deals

Pipeline of european expected deals EUROPE

Situation Target company Sector Potential bidder company Financial adviser to Seller company Market cap/ Comments bidder (B); target est. value (T); seller (S) (€m) Expected Bank Financial Banco Santander SA Banco 1,076 Bank Millennium’s Portuguese deal Millennium SA Services Comercial parent company Banco Commercial Portugues SA Portugues (BCP) has received a preliminary approach from Spain’s Santander, according to a source at the Polish-listed lender.

Potential UKTV TMT BBC Worldwide Limited Virgin Media Inc 420 BBC Worldwide may look to takeover increase its 50.00% stake in UKTV target but is not considering taking full ownership of the company, according to a source close to the situation. Potential Gascan Business The Riverside Company; and Banco Millennium Explorer 100 Gascan, the Portuguese distributor takeover - Gases Services GALP Energia SGPS SA BCP Investimento Investments of liquefied petroleum gas, is up for target Combustiveis (S) SCR SA sale by Portuguese private equity SA firmE xplorer, which mandated BCP and Cuatrecasas. Potential Prva Petoletka Industrials & Undisclosed bidder Serbian 62 The Serbian Privatisation Agency takeover Chemicals Privatization (PA) has two separate interested target Agency; and parties in the upcoming auction of Government of Prva Petoletka, the hydraulic and the Republic of pneumatic components producer, Serbia a PA source told this news service. An Italian player is in the process of looking for a local bidder in order to form a consortium, he said. Meanwhile another local bidder active in the sector has shown interest and is expected to bid. Potential Chemrec AB Energy, Undisclosed bidder VantagePoint 24 Chemrec, a Swedish developer of takeover Mining & Venture liquor gasification technology to target Utilities Partners LP; produce renewable engine fuels, is Volvo Technology in due diligence process with two Transfer AB; potential industrial investors, Chief Environmental Executive Max Jonsson said. Technologies Jonsson would not disclose details Fund; and of the potential bidders but noted Nykomb that they were companies with Synergetics industrial capacity to build large- scale plants. He also said that pulp and mill players had shown interest in taking up a stake in the business. Chemrec’s largest shareholder, Vantage Point Venture Partners, is dealing directly with the strategic investors, he added. Potential Bio-Layer Industrials & Thermo Fisher Scientific Transocean Group CM Capital 18 Anteo, the Australian surface takeover Chemicals Inc; Roche Holding Ltd; Life (T) Investments technology diagnostics company, target Technologies Corp; Merck & Pty Ltd could pursue a deal with a global in- Co Inc; Abbott Laboratories; vitro diagnostics company or bean Beckman Coulter Inc; manufacturer in the next three to six and Siemens Healthcare months, said Chief Executive Officer Diagnostics limited Dr Geoff Cumming. Potential Banca Marche Real Estate Fimit SGR Banca IMI/Intesa Banca Marche - Banca delle Marche, an Italian takeover (real estate Sanpaolo; BNL SpA regional bank, is in talks to sell all target assets) - Gruppo BNP of its real estate holdings to a group Paribas; REAG (T) of property investors, said Chief Executive Massimo Bianconi. Fimit, the privately held Italian real estate fund, will manage the assets on behalf of the investors, said a source close to the situation. The number of investors and the number of shares is yet to be determined, according to the source, also adding that they could be Italian or foreigners. Note: Expected deals based on confirmed announcements by companies involved Source: mergermarket

Monthly M&A Insider 40 League tables

Top 20 financial advisers EUROPE value volume

YTD House Value Deal YTD House Value Deal 31-Aug-10 (€m) count 31-Aug-10 (€m) count 1 Goldman Sachs 137,195 60 1 Rothschild 65,535 96 2 JPMorgan 111,843 56 2 KPMG 9,950 84 3 Credit Suisse 93,973 72 3 PricewaterhouseCoopers 8,394 82 4 Morgan Stanley 89,377 79 4 Morgan Stanley 89,377 79 5 Bank of America Merrill Lynch 80,831 32 5 Deloitte 5,509 79 6 Barclays Capital 68,417 31 6 Credit Suisse 93,973 72 7 BNP Paribas 67,512 30 7 Lazard 38,152 67 8 Citigroup 67,340 42 8 Goldman Sachs 137,195 60 9 Rothschild 65,535 96 9 JPMorgan 111,843 56 10 RBC Capital Markets 46,966 20 10 Deutsche Bank 44,535 54 11 Deutsche Bank 44,535 54 11 UBS Investment Bank 40,488 52 12 Royal Bank of Scotland Group 43,227 14 12 Citigroup 67,340 42 13 UBS Investment Bank 40,488 52 13 Ernst & Young 1,481 39 14 Lazard 38,152 67 14 DC Advisory Partners 4,387 37 15 Santander Global Banking and Markets 37,801 9 15 Bank of America Merrill Lynch 80,831 32 16 TD Securities 33,692 5 16 Barclays Capital 68,417 31 17 Nomura Holdings 31,566 28 17 BNP Paribas 67,512 30 18 Blackstone Group Holdings 29,466 5 18 Grant Thornton Corporate Finance 661 29 19 Greenhill & Co 22,243 10 19 Nomura Holdings 31,566 28 20 HSBC Bank 20,883 24 20 Global M&A 181 26 Source: mergermarket Source: mergermarket

YTD House Value Deal YTD House Value Deal 31-Aug-10 (€m) count 31-Aug-10 (€m) count 1 Slaughter and May 92,955 46 1 Linklaters 72,874 120 2 Skadden Arps Slate Meagher & Flom 86,615 34 2 Allen & Overy 52,791 109 3 Cleary Gottlieb Steen & Hamilton 82,247 42 3 DLA Piper 9,013 100 4 Linklaters 72,874 120 4 CMS 11,604 93 5 Sullivan & Cromwell 71,861 24 5 Freshfields Bruckhaus Deringer 46,786 88 6 Blake, Cassels & Graydon 62,708 15 6 Clifford Chance 42,288 67 7 Simpson Thacher & Bartlett 57,082 26 7 Baker & McKenzie 12,212 58 8 Cravath Swaine & Moore 55,605 11 8 Jones Day 41,794 56 9 Allen & Overy 52,791 109 9 Herbert Smith/Gleiss Lutz/Stibbe 43,881 55 10 Freshfields Bruckhaus Deringer 46,786 88 10 Latham & Watkins 38,517 51 11 Herbert Smith/Gleiss Lutz/Stibbe 43,881 55 11 SJ Berwin 6,134 47 12 Clifford Chance 42,288 67 12 Slaughter and May 92,955 46 13 Jones Day 41,794 56 13 White & Case 8,550 46 14 Weil Gotshal & Manges 41,776 42 14 Hogan Lovells 7,491 45 15 Latham & Watkins 38,517 51 15 Mannheimer Swartling 6,194 43 16 Stikeman Elliott 38,313 11 16 Cleary Gottlieb Steen & Hamilton 82,247 42 17 Davis Polk & Wardwell 37,443 15 17 Weil Gotshal & Manges 41,776 42 18 Debevoise & Plimpton 36,611 6 18 Dewey & LeBoeuf 23,880 42 19 Norton Rose 33,680 30 19 Vinge 3,981 42 20 Bredin Prat 28,765 21 20 Loyens & Loeff 12,562 39 Source: mergermarket Source: mergermarket

The legal adviser league tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being Europe-based.

Monthly M&A Insider 41 League tables

TOP 10 private equity firms by European BUYOUTS EUROPE value volume

YTD House Value Deal YTD House Value Deal 31-Aug-10 (€m) count 31-Aug-10 (€m) count 1 CVC Capital Partners 4,519 5 1 HgCapital 1,171 9 2 Advent International 3,859 5 2 Triton Partners 2,057 6 3 Onex Partners 3,672 1 3 Barclays Private Equity 401 6 4 Bain Capital 2,924 2 4 Lloyds TSB Development Capital 290 6 5 Triton Partners 2,057 6 5 Edmond de Rothschild 183 6 6 TPG Capital 1,559 2 Investment Partners 7 Kohlberg Kravis Roberts & Co 1,423 4 6 CVC Capital Partners 4,519 5 8 Cinven 1,401 2 7 Advent International 3,859 5 9 GS Capital Partners 1,200 1 8 AXA Private Equity 402 5 10 HgCapital 1,171 9 9 Sovereign Capital Partners 50 5 Source: mergermarket 10 Procuritas 28 5 Source: mergermarket

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 Europe-based. The tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals.

TOP 10 private equity firms by European EXITS value volume

YTD House Value Deal YTD House Value Deal 31-Aug-10 (€m) count 31-Aug-10 (€m) count 1 The Carlyle Group 2,734 5 1 The Carlyle Group 2,734 5 2= Permira 2,408 2 2 Barclays Private Equity 466 4 2= SV Life Sciences 2,408 2 3 ISIS Private Equity Partners 44 4 4 GS Capital Partners 2,408 1 4= CapMan Group - 4 5 Apax Partners 2,200 3 4= Perfectis Private Equity - 4 6 Riverstone Holdings 1,759 1 6 Apax Partners 2,200 3 7 Astorg Partners 1,304 2 7 3i 1,133 3 8 Candover Investments 1,200 2 8 Lloyds TSB Development Capital 516 3 9 Charterhouse Capital Partners 1,200 1 9= Duke Street 404 3 10 3i 1,133 3 9= Parcom Capital 404 3 Source: mergermarket Source: mergermarket

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 Europe- based. The tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals.

Monthly M&A Insider 42 43 Q3 10* Q3 10* 10 Q2 10 Q2 10 Q1 10 Q1 oving Moving average line trend 09 Q4 09 Q4 09 Q3 09 Q3 09 Q2 09 Q2 09 Q1 09 Q1 08 Q4 08 Q4 08 Q3 08 Q3 Monthly M&A Insider Monthly 08 Q2 08 Q2 08 Q1 08 Q1 07 Q4 07 Q4 07 Q3 07 Q3 07 Q2 07 Q2 07 Q1 07 Q1 06 Q4 06 Q4 06 Q3 06 Q3 06 Q2 06 Q2 06 Q1 06 Q1 05 Q4 05 Q4 05 Q3 05 Q3 05 Q2 05 Q2 05 Q1 05 Q1 04 Q4 04 Q4 04 Q3 04 Q3 04 Q2 04 Q2 04 Q1 04 Q1 0 0 800 600 400 200

1,800 1,600 1,400 1,200 1,000 700 600 500 400 300 200 100

Number of deals of Number me olu me olu v deals of Number v Q3 Q3 10* 10* 10 10 Q2 Q2 10 10 Q1 Q1 09 09 Q4 Q4 09 09 Q3 Q3 09 09 Q2 Q2 09 09 Q1 Q1 08 08 Q4 Q4 08 08 Q3 Q3 08 08 Q2 Q2 08 08 Q1 Q1 07 07 Q4 Q4 07 07 Q3 Q3 07 07 Q2 Q2 07 07 Q1 Q1 06 06 Q4 Q4 06 06 Q3 Q3 06 06 Q2 Q2 06 06 Q1 Q1 05 05 Q4 Q4 05 05 Q3 Q3 05 05 Q2 Q2 05 05 Q1 Q1 04 04 Q4 Q4 04 Q3 Q3 04 04 04 Q2 Q2 04 04 Q1 Q1

0 0 5,000

45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 50,000

500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000

€ € m) ( alue V m) ( alue V e valu e valu mid-market trend European M&A quarterly

rterly trend arterly European M&A qu aphs d gr Tren

EUROPE 44 Q3 10* 10 xits Q2 als 10 Q1 09 Q4 opean buyouts opean e es es al & Biotech 09 Q3 Eur Eur e 09 Q2 s Servic e e 09 Q1 gy, Mining & Utilities enc 08 Q4 ansportation Pharma, Medic Construction Leisur Tr Real Estate Agricultur Def Ener Financial Servic Industrials & Chemic Consumer TMT Busines 08 Q3 Monthly M&A Insider Monthly 08 Q2 08 Q1 07 Q4 15.9% 07 Q3 07 Q2 07 Q1 06 Q4 20.2% 06 Q3 12.9% 06 Q2 06 Q1 05 Q4 0.4% 05 Q3 05 Q2 1.0% 05 Q1 1.7% 04 Q4 11.0% 04 Q3 3.3% 04 Q2 3.6% 04 Q1 0 50 4.9% 400 350 300 250 200 150 100 9.1%

6.9% me olu deals of Number me olu 8.4% v v Q3 10* 10 xits Q2 10 Q1 als 09 Q4 opean buyouts opean e es es al & Biotech 09 Q3 Eur Eur 09 Q2 e s Servic 09 Q1 e e gy, Mining & Utilities 08 Q4 enc ansportation 08 Q3 Industrials & Chemic Consumer TMT Busines Financial Servic Ener Pharma, Medic Construction Leisur Tr Real Estate Agricultur Def 08 Q2 d te equity tren a 08 Q1 07 Q4 07 Q3 9.9% 07 Q2 10.0% 5.3% 07 Q1 06 Q4 06 Q3 06 Q2 13.1% 10.0% 06 Q1 05 Q4 0.2% 05 Q3 0.5% 05 Q2 05 Q1 2.8% 04 Q4 04 Q3 5.4% 04 Q2 04 Q1

0 1.7% 27.1% 1.9%

90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000

100,000

€ m) ( alue V 12.2% e valu e valu own YTD 2010 akdown Bre European M&A Sector

rterly priv arterly European M&A qu phs gr a d Tren

EUROPE 45 osed H2 2010* H1 2010 eland lue not discl H2 dic > €501m €251m-€500m €101m-€250m €15m-€100m €5m-€14.9m Va y 2009 ance Germany Iberia Benelux Ital Other SEE UK & Ir CEE Nor Fr H1 2009 Monthly M&A Insider Monthly H2 2008 7.8% 5.4% H1 2008 4.6% 7.2% 3.0% H2 2007 H1 2007 10.9% H2 2006 H1 2006 23.0% H2 2005 H1 2005 12.4% H2 2004 H1 2004 0 11.7% 14.1% 500 3,500 3,000 2,500 2,000 1,500 1,000

me olu me olu Number of deals of Number v v H2 2010* H1 2010 > €501m €251m-€500m €101m-€250m €15m-€100m €5m-€14.9m eland H2 2009 dic y ance Germany Iberia Benelux Ital Other SEE UK & Ir Nor Fr CEE H1 2009 H2 2008 3.1% H1 12.7% 2008 9.8% H2 2007 7.8% 3.9% H1 2007 H2 2006 5.9% H1 2006 H2 2005 H1 2005 26.5% 14.9% H2 2004 H1 2004

9.1% 50

700 650 600 550 500 450 400 350 300 250 200 150 100 6.0%

€ bn) ( alue V e valu kdown European M&A deal size brea

own YTD 2010 GEOGRAPHIC Breakdown European M&A e valu phs gr a d Tren

EUROPE A mergermarket M&A report on THE MIDDLE EAST & AFRICA

M&A activity has been quiet in August with most of the region observing Ramadan. For all of Middle E ast & A frica the Middle East and Africa, there were only 17 deals announced this month. The largest deal took place in Lebanon, with EFG-Hermes Holding SAE acquiring a 65.00% stake in Credit Libanais SAL, from Capital Investment Holding and Capital Investment Holding SAL, for a consideration of US$542m.

For the year to date, Financial Services, TMT and the Energy, Meanwhile, South Africa will hit the headlines once again Mining and Utilities sectors remain the most active in the following the World Cup. According to Financial News, region, comprising 46.0% of the total deal volume; TMT and Russian investment bank Renaissance Capital recently Energy, Mining & Utilities make up 51.0% of the total deal appointed Charles Barlow, a South African former Managing value as well. South Africa and Israel are the most active Director at Greenhill, as Head of M&A in New Markets, countries, comprising 30.0% and 28.0% of deal volume for the such as Africa, Brazil, India, Kurdistan and Iraq. In July, year-to-date, respectively. South Africa has amassed 33.0% of Renaissance Capital completed the acquisition of BJM the total deal value this year, followed closely by Nigeria with Securities, the South African security broker, for a total cash 31.0%. Israel was the most active country in August with 6 consideration of US$27.83m. Israeli target-based transactions, valued at US$407m. One of the most interesting deals to come out of Africa Q3 (up to 31-Aug-10) has already seen a 33.0% increase in in the next quarter will be HSBC’S offer to acquire up to deal value compared to Q2 while volume is 54.0% lower than 70.00% of Nedbank, the South African bank, from Old Q2 so far. Buyouts in MEA are on the rise this year, with a Mutual. HSBC has already started due diligence and it deal value increase of 351.0% in Q3 so far, compared to Q2 is understood that the process will complete in the next this year. Deal volume has also increased in the same period two months. According to Trade Arabia, HSBC’s Chinese by 50.0%, showing early signs of recovery. However, when customers will benefit from this deal as they are looking to compared to Q3 2009, deal value has decreased 62.0% and do deals on the resource-rich continent. volume by 63.0%, a far cry from the days before the financial crisis struck the region.

M&A activity is expected to pick up in the region after Eid, the end of the religious festival Ramadan. For instance, according to AMEInfo, UAE-listed telco Etisalat is interested in the Moroccan market after an unsuccessful bid to acquire a stake in Morocco’s Meditel last year. Also, Etisalat CEO Jamal Al Jarwan said that the company is eager to bid for the third mobile operator licence that the Syrian government will issue soon.

Monthly M&A Insider 46 DEAL OF THE MONTH

Target: Credit Libanais SAL Announced: 17-Aug-10 Middle E ast & A frica

Bidder: EFG-Hermes Holding SAE Deal value: US$542m

Vendor: Capital Investment Holding SAL; and Capital Investment Holding Deal nature: Cross-border, Private

• EFG-Hermes Holding SAE, the listed Egypt-based • The consideration is represents a transaction multiple of company engaged in investment banking, securities approximately 2x shareholders’ equity. The acquisition will brokerage, asset management services and private be financed from EFG Hermes’ own cash resources and equity, which was formed as a result of merger of will not require any external funding. Egyptian Financial Group (EFG) and Hermes, has acquired • The transaction will enable EFG Hermes to enter into a 65.00% stake in Credit Libanais SAL, the Lebanon investment banking. The completion of the transaction is based bank, from Capital Investment Holding and Capital subject to the approval of Central Bank of Lebanon. Investment Holding SAL, for a consideration of US$542m.

• Along with the agreement, the bidder has also got a call option over an additional 25.00% interest which will be exercisable over the next two years. Credit Libanais SAL reported revenues of US$51m for the year 2009.

Exit multiples – Y/E 30-Sep-09 Premium analysis

Multiples Value (US$m) Offer price per share (US$) n/a

Revenue n/a - 1 day before n/a EBITDA n/a - 1 month before n/a EBIT n/a - 1 day after n/a Earnings 16.3x 51.1 Pre-rumour n/a

Advisers Target/Seller Bidder Financial Financial JPMorgan EFG Hermes Holding Legal Legal Dewey& LeBoeuf

PR PR

Monthly M&A Insider 47 Top deals & Expected deals

Top 15 Middle Eastern & African announced deals for YTD 31 August 2010 Middle E ast & A frica

Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia Deal Revenue EBITDA P/E 1-day before value (US$m) 30-Mar-10 C Zain Africa BV TMT Bharti Airtel Limited Mobile 11.2 - 10,700 Telecommunications Company K.S.C. 15-Jul-10 P Dimension Data TMT Nippon Telegraph and 0.7 11.5 0.2 18.1% 2,822 Holdings Plc Telephone Corporation 18-Feb-10 P Tsogo Sun Holdings Leisure Gold Reef Resorts Hosken Consolidated 19.7 21.9 59.0 - 2,721 Pty Ltd Limited Investments Limited; and SABMiller Plc 28-Mar-10 P Sonangol Sinopec Energy, Mining Sinopec Corporation Sinopec Overseas Oil - 2,457 International & Utilities Hongkong & Gas Limited Limited (55.00% International Limited stake) 31-Mar-10 P Momentum Group Financial Metropolitan Life FirstRand Limited n/a n/a - 2,408 Limited Services Limited 10-May-10 P Anglo American Energy, Mining Hindustan Zinc Anglo American Plc 2.0 6.3 - 1,338 Zinc & Utilities Limited 25-Mar-10 P Hyprop Investments Real Estate Redefine Income Fund 15.3 2.5% 942 Limited (66.70% Limited stake) 21-Mar-10 C Qatar Shipping Transportation Qatar Navigation -24.0% 917 Company QSC Company QSC 10-Jan-10 C Qatar Real Estate Real Estate Barwa Real Estate n/a n/a 10.1 30.6% 862 Investment Co Company QSC 20-Jul-10 P BP Plc (Western Energy, Mining Apache Corporation BP plc 650 Desert business & Utilities concessions and East Badr El-din exploration concession in Egypt) 11-Jul-10 P Aabar Investments Financial International n/a n/a 3.3 545 PJSC Services Petroleum Investment Company 17-Aug-10 P Credit Libanais SAL Financial EFG-Hermes Holding Capital Investment n/a n/a 16.3 - 542 (65.00% stake) Services SAE Holding SAL; and Capital Investment Holding 20-May-10 C Shadeed Iron & Industrials & Jindal Steel & Power Al Ghaith Holding - 464 Steel LLC Chemicals Ltd PJSC 10-Mar-10 C Foodcorp Consumer New Foodcorp Pamodzi Investment 0.6 5.8 - 453 (Proprietary) Holdings (Proprietary) Holdings Limited (77.00% Limited (Proprietary) Limited stake) 18-Jan-10 P Bank Audi SAL - Financial M1 Group Ltd EFG-Hermes Holding n/a n/a 3.4% 450 Audi Saradar Group Services Company (13.95% stake) C = Completed; P = Pending; L = Lapsed Source: mergermarket

Monthly M&A Insider 48 Top deals & Expected deals

Top 5 Middle Eastern & African announced deals of the month (august 2010) Middle E ast & A frica

Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia Deal Revenue EBITDA P/E 1-day value before (US$m) 17-Aug-10 P Credit Libanais SAL Financial EFG-Hermes Holding Capital Investment n/a n/a 16.3 - 542 (65.00% stake) Services SAE Holding SAL; and Capital Investment Holding 31-Aug-10 P Attenti Holdings S.A. TMT 3M Company Francisco Partners - 230 LP; Cavendish Asset Management; and Sequoia Capital Israel 22-Aug-10 P Derech Eretz Construction Israel Infrastructure Africa Israel - 125 Highways (1997) Ltd. Fund Investments Ltd (37.50% stake) 05-Aug-10 P Business Connexion TMT Black Economic 3.5% 61 Group, Ltd. (30.70% Empowerment stake) 04-Aug-10 P Mashala Resources Energy, Mining Continental Coal - 56 & Utilities Limited C = Completed; P = Pending; L = Lapsed Source: mergermarket

Pipeline of Middle Eastern & African expected deals

Situation Target company Sector Potential bidder Financial Seller company Market Comments company adviser to bidder cap/ est. (B); target (T); value seller (S) (US$m) Rumoured Zimbabwe Iron and Industrials & ArcelorMittal; and Government of 300 Zimbabwe has invited offers for takeover Steel Company Chemicals Jindal Steel & Power Zimbabwe state-owned Zisco and India’s Ltd Jindal Steel and Power (JSPL) is planning to submit a further bid. Potential Egbin Electric Power TMT Korea Electric Power 9 Egbin Electric Power, Nigeria’s takeover Plc Corporation state-owned power plant, will sell a 51.00% stake to Korea Electric Power Corporation (KEPCO), said Egbin’s Chief Executive Officer J. O. Ogbonna. Potential Al Othaim Real Consumer Al Othaim Markets - Al Othaim Markets signs MoU to takeover Estate Investment Company acquire Al Othaim Real Estate and Development Investment and Development Company Company. Rumoured Atlantic Wireless TMT Hits Telecom Holding - Hits Telecom planning to increase takeover (LiberCell) stake in LiberCell. Expected deals based on confirmed announcements by companies involved

Monthly M&A Insider 49 League tables

Top 15 financial advisers – Middle east & africa Middle E ast & A frica value volume

YTD House Value Deal YTD House Value Deal 31-Aug-10 (US$m) count 31-Aug-10 (US$m) count 1 UBS Investment Bank 15,795 4 1 Goldman Sachs 12,126 10 2 Barclays Capital 14,359 4 2 Rand Merchant Bank 4,589 8 3 Morgan Stanley 13,810 4 3 Lazard 4,854 6 4 Goldman Sachs 12,126 10 4 JPMorgan 5,173 5 5 Standard Chartered 11,650 3 5 Investec 4,062 5 6 HSBC Bank 11,617 3 6 Ernst & Young 559 5 7 BNP Paribas 10,700 2 7 Deloitte 200 5 8= Global Investment House 10,700 1 8 UBS Investment Bank 15,795 4 8= State Bank of India 10,700 1 9 Barclays Capital 14,359 4 10 Royal Bank of Scotland Group 5,715 2 10 Morgan Stanley 13,810 4 11 Commerzbank 5,715 1 11 Deutsche Bank 4,596 4 12 JPMorgan 5,173 5 12 Citigroup 1,413 4 13 Lazard 4,854 6 13 Nedbank Capital 295 4 14 Deutsche Bank 4,596 4 14 PricewaterhouseCoopers 78 4 15 Rand Merchant Bank 4,589 8 15 Standard Chartered 11,650 3 Source: mergermarket Source: mergermarket

Top 15 legal advisers – Middle east & africa value volume

YTD House Value Deal YTD House Value Deal 31-Aug-10 (US$m) count 31-Aug-10 (US$m) count 1 Allen & Overy 16,448 8 1 Webber Wentzel 7,488 11 2 Linklaters 16,419 8 2 Allen & Overy 16,448 8 3 Herbert Smith/Gleiss Lutz/Stibbe 15,610 6 3 Linklaters 16,419 8 4 AZB & Partners 11,495 6 4 Werksmans 866 8 5 Talwar, Thakore and Associates 10,700 1 5 Edward Nathan Sonnenbergs 6,815 7 6 Webber Wentzel 7,488 11 6 Bowman Gilfillan 1,702 7 7 Edward Nathan Sonnenbergs 6,815 7 7 Herbert Smith/Gleiss Lutz/Stibbe 15,610 6 8 Freshfields Bruckhaus Deringer 6,396 5 8 AZB & Partners 11,495 6 9 Sullivan & Cromwell 6,365 3 9 Freshfields Bruckhaus Deringer 6,396 5 10 Stikeman Elliott 5,748 2 10 Dewey & LeBoeuf 2,705 5 11= GOERG Rechtsanwaelte 5,715 1 11 DLA Cliffe Dekker Hofmeyer 785 5 11= Kirkland & Ellis 5,715 1 12 Gibson Dunn & Crutcher 735 5 11= Noerr 5,715 1 13 CMS 686 4 11= Willkie Farr & Gallagher 5,715 1 14 Jones Day 597 4 15 Eversheds 2,853 2 15 Baker & McKenzie 200 4 Source: mergermarket Source: mergermarket

Monthly M&A Insider 50 League tables

TOP 5 private equity firms by Middle Eastern & African buyouts Middle E ast & A frica value volume

YTD House Value Deal YTD House Value Deal 31-Aug-10 (US$m) count 31-Aug-10 (US$m) count 1 Capitau 453 1 1 Capitau 453 1 2 Temasek Holdings Pte 200 1 2 Temasek Holdings Pte 200 1 3 Israel Infrastructure Fund 125 1 3 Israel Infrastructure Fund 125 1 4 Marlin Equity Partners 39 1 4 Marlin Equity Partners 39 1 5 Actis Capital 30 1 5 Actis Capital 30 1 Source: mergermarket Source: mergermarket

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 (including Israel) & African-based. The tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals.

TOP 5 private equity firms by Middle east & africa exits

value volume

valueYTD House Value Deal YTD House Value Deal 31-Aug-10 (US$m) count 31-Aug-10 (US$m) count Pamodzi Investment Holdings 1 Pitango Venture Capital 100 2 1 453 1 (Proprietary) 2 Cedar Fund 89 2 2 Francisco Partners 230 1 3 Evergreen Venture Partners 29 2 3 Sequoia Capital 230 1 Pamodzi Investment Holdings 4 453 1 4 Radius Ventures 160 1 (Proprietary) 5 Pitango Venture Capital 100 2 5= Francisco Partners 230 1 Source: mergermarket 5= Sequoia Capital 230 1 Source: mergermarket

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 (including Israel) & African-based. The tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals.

Monthly M&A Insider 51 Trend graphs

Middle east & africa M&A quarterly trend Middle E ast & A frica

value volume

35,000 150

30,000 120

25,000

90 20,000

15,000 alue (US $ m)

V 60 olume of deals V

10,000

30 5,000

Middle east & africa M&A quarterly mid-market trend

value volume

6,000 80

70 5,000

4,000 50

3,000 40 alue (US $ m) V olume of deals

V 30 2,000

1,000 10

Moving average trend line

Monthly M&A Insider 52 Trend graphs

Middle east & africa M&A quarterly private equity trend Middle E ast & A frica

value volume

7,000 20

18 6,000 16

5,000 14

12 4,000

3,000 Number of deals alue (US$m) 8 V

2,000 6

4 1,000 2

Middle East Middle East & Africa buyouts & Africa buyouts Middle East Middle East & Africa exits & Africa exits

Middle east & africa M&A Sector Breakdown YTD 2010

value volume

0.5% 1.6% 0.5% 1.2% 5.7% 3.8% 2.7% 5.5% Industrials & Chemicals 15.3% Industrials & Chemicals 2.7% 13.3% Financial Services 4.4% Financial Services 9.1% Business Services 2.2% Business Services 2.2% Consumer Consumer 8.8% Energy, Mining & Utilites 15.3% Energy, Mining & Utilites

TMT TMT 14.8% 3.4% Leisure Leisure

Tr ansportation Tr ansportation

Pharma, Medical & Biotech Pharma, Medical & Biotech 8.7% 34.5% 16.4% Construction Construction 15.3% Real Estate Real Estate 11.5% Agriculture Agriculture

Defence Defence

Monthly M&A Insider 53 Trend graphs

Middle east & africa M&A GEOGRAPHIC BREAKDOWN YTD 2010 Middle E ast & A frica value volume

0.7% 0.2% 1.2% 1.8% 1.2% 0.1% 0.1% 1.8% 1.2% 0.1% 7.1% 1.8% South Africa South Africa 3.2% 2.4% Israel 4.2% 2.4% Israel 2.4% 30.3% 0.2% 32.8% Egypt Egypt 1.6% 3.0% United Arab Emirates United Arab Emirates 3.6% Kuwait Kuwait

Saudi Arabia 4.8% Saudi Arabia

Qatar Qatar

Nigeria 5.5% Nigeria 4.8% 31.2% Oman Oman 2.8% Jordan 8.5% Jordan 3.9% Namibia Namibia 5.2% 0.9% 27.9% Lebanon 0.6% Lebanon Syrian Arab Republic Syrian Arab Republic

Angola Angola

Sierra Leone Sierra Leone

Zambia Congo

Libya

Zimbabwe

Uganda

Mozambique

Middle east & africa M&A DEAL SIZE BREAKDOWN

value volume

60 250

50 200

40 150

30 alue ($bn) V 100 Number of deals 20

50 10

> US$501m > US$501m

US$251m-US$500m US$251m-US$500m

US$101m-US$250m US$101m-US$250m

US$15m-US$100m US$15m-US$100m

US$5m-US$14.9m US$5m-US$14.9m

Value not disclosed

Monthly M&A Insider 54 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 August 2010.

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