Asia Pacific M&A Bulletin

Advisory Asia Pacific M&A Bulletin The Asia story Mid-year 2010 Mid-year 2010 Asia Pacific M&A Bulletin 2 PricewaterhouseCoopers We are the Accountancy Firm of the Year 2009 PwC is proud to have been named the Accountancy Firm of the Year 2009 at the Asia Pacific M&A Awards by MergerMarket and the Financial Times. PricewaterhouseCoopers Transactions We help companies make acquisitions, divestitures Identify and strategic alliances, and to access the global • M&A Strategy capital markets. In each case we have the same • Deal Origination overriding objective – Maximising Returns and • Market Entry Minimising Risks for our clients. Harvest • Target Search • Sell-side Deal Using cross-functional teams, we bring together all the Advisory • Vendor Assistance relevant expertise from our PricewaterhouseCoopers • Capital Markets Evaluate global network to provide services across the whole Advisory • Buy-side Deal deal continuum. Tapping into our network’s vast Advisory industry sector knowledge, we deliver a fully • Valuation connected solution to our corporate and financial Maximise • M&A Tax Structuring investor clients. • Project Finance • Post Deal Advisory Integration With more than 6,200 dedicated specialists in our • Performance Execute global Transactions practice, our clients include the Improvement world’s leading companies and private equity houses. • Tax Optimisation • Financial and Tax Due Diligence In Asia Pacific, we are the leading Transactions • Governance, Risk and Controls • Commercial Due Dilligence practice, with more than 1,600 specialists including • Accounting • IT Due Dilligence 120 dedicated partners. Advisory • Operational Due Dilligence • HR Due Dilligence • Environment Due Dilligence Asia Pacific M&A Bulletin Mid-year 2010 PricewaterhouseCoopers 1 M&A advisor of choice Number 2 Advisor by Volume in Asia Pacific (ex.Japan) for 2009 by Mergermarket Number 1 Advisor for Completed Deals by Volume in Asia Pacific (ex.Japan) for 2009 by Thomson Reuters A selection of recent M&A Lead Advisory Transactions in Asia Pacific Kowa Spinning Co., Ltd UMC Japan Korea Asset Actis Private Equity Management buyout Sale of 38.68% interest Investment Trust Co Consolidation of the through Kowabo to Alpha Wisdom Ltd for Ltd distribution businesses Company Ltd by raising JPY5.0 billion Sale of 50% plus 1 share of KS Energy Services its interest in Kowa (US$55 million) interest to Daishin MSB Limited. Total value of Spinning Co., Ltd to PEF for KRW72.1 billion Distribution business is 97.19% for JPY20.6 (US$64 million) S$320 million billion (US$225 million) (US$230 million) Financial Advisor: Financial Advisor: Financial Advisor: Financial Advisor: PwC Advisory Co Ltd PwC Advisory Co Ltd Samil PricewaterhouseCoopers pwc Corporate Finance Corporate Finance Corporate Finance Corporate Finance 2010 Japan 2009 Japan 2010 Korea 2009 Singapore Alliance Cosmetics Resource Holdings Simply Squeezed Agria Corporation Sdn Bhd Limited Limited Acquired a 19% interest Sale of 80% interest to Acquired by Keller Sale to Frucor in PGG Wrightson Navis Capital for Holdings Ltd for a Beverages Limited, a Limited for RM160 million maximum potential subsidiary of Suntroy NZ$69 million (US$50 million) consideration of (price undisclosed) (US$50 million) S$118 million (US$85 million) Financial Advisor: Financial Advisor: Financial Advisor: Financial Advisor: pwc pwc pwc pwc Corporate Finance Corporate Finance Corporate Finance Corporate Finance 2010 Malaysia 2009 Singapore 2009 New Zealand 2009 New Zealand Chinfon Commercial Chinfon Commercial K S Oil Limited Gwalior Chemical Bank Co Ltd Bank Co Ltd Equity fund-raising Industries Limited Sale of 19 Taiwan Sale of 18 Taiwan through Private Sale of chemical Branch Operations to Branch Operations to Placement of Equity business to Lanxess Far Eastern International Yuanta Bank for Shares, Warrants & India Pvt Ltd for INR 5.4 Bank for NT$19.1billion NT$19.3billion (US$602 GDRs for US$90 million billion (US$113 million) (US$596 million) million) Financial Advisor: Financial Advisor: Financial Advisor: Financial Advisor: pwc pwc pwc pwc Corporate Finance Corporate Finance Corporate Finance Corporate Finance 2009 Taiwan 2009 Taiwan 2009 India 2009 India Mid-year 2010 Asia Pacific M&A Bulletin 2 PricewaterhouseCoopers Foreword The Asia story Twelve months after hitting the trough in the worst global recession since the Great Depression, the world economy is recovering steadily on the back of unprecedented fiscal and monetary policy support by governments and central banks. However, unexpected dark clouds, in the form of the European sovereign debt crisis, falling stock markets and stubborn US unemployment, have gathered on the horizon. At the same time, the potential downside risks to the world economy of poorly timed unwinding of stimulus policies, over-regulation and asset bubbles have not abated. Are these mere passing showers or ominous signs of a world spinning headlong into the dreaded double-dip recessionary storm? World economy recovering stronger than previously forecasted Following a better than expected first quarter growth, the International Monetary Fund (IMF) revised its 2010 world economic growth forecast to 4.6% in July Chao Choon Ong 2010, up from its 4.1% projection three months earlier. The IMF’s forecast for Transactions Leader 2011 remained unchanged at 4.3%. The revision was on the account of robust Asia Pacific growth in Asia, and an overly pessimistic view of the US, Japan and German economies in April. Based on the encouraging signs of growth in private demand and strong global indicators of real economic activity stabilising in May at a high level, the IMF confirmed expectations of a modest but steady recovery in most advanced economies and strong growth in many emerging and developing economies. Economic Growth from 2008 to 2011 Actual Forecast (Percentage) 2008 2009 2010 2011 World Output 3.0 (0.6) 4.6 4.3 United States 0.4 (2.4) 3.3 2.9 European Union 0.6 (4.1) 1.0 1.3 Germany 1.2 (4.9) 1.4 1.6 France 0.1 (2.5) 1.4 1.6 Italy (1.3) (5.0) 0.9 1.1 Spain 0.9 (3.6) (0.4) 0.6 United Kingdom 0.5 (4.9) 1.2 2.1 Japan (1.2) (5.2) 2.4 1.8 Australia 2.1 1.3 3.0 3.5 New Zealand 0.3 (1.5) 3.0 3.2 Newly Industrialised Asian Economies 1.8 (0.9) 6.7 4.7 Hong Kong 2.5 (2.8) 6.0 4.4 Korea 2.2 0.2 5.7 5.0 Singapore 1.1 (1.3) 9.9 4.9 Taiwan 0.1 (1.9) 7.7 4.3 Developing Asia 7.7 6.9 9.2 8.5 China 9.6 9.1 10.5 9.6 India 6.4 5.7 9.4 8.4 ASEAN 5 4.7 1.7 6.4 5.5 Indonesia 6.1 4.5 6.0 6.2 Malaysia 4.6 (1.7) 6.7 5.3 Philippines 4.6 1.1 6.0 4.0 Thailand 2.6 (2.2) 7.0 4.5 Vietnam 6.2 5.3 6.5 6.8 Source: IMF World Economic Outlook, April 2010 Asia Pacific M&A Bulletin Mid-year 2010 PricewaterhouseCoopers 3 Developing Asia leads with strong growth, but US is still after the expiry of a federal home buyer tax credit. The IMF bulwark for world economy recently noted that the “backlog of foreclosures and high levels of negative equity, combined with elevated The Asia Pacific economy is expected to grow at 7.5% this unemployment, pose risks of a double dip in housing”. year, compared to 3.3% for US and 1% for European Union. Underpinning Asia Pacific’s robust growth are There is also the danger that new financial shocks could developing Asia’s 9.2% and newly industralised Asian potentially derail the nascent recovery. The global financial economies’ 6.7%. The twin engines of Asia, China and crisis started as a banking crisis but transformed into a India, are at the front of the pack with 10.5% (2009: 9.1%) brewing sovereign debt storm by the end of 2009. Iceland, and 9.4% (2009: 5.7%) growth respectively. These figures Ireland and Dubai were the first sovereigns to be hit. Greece are even more impressive considering the fact that these followed in early 2010, and with it came shocking two economies did not experience any contraction in the revelations of disingenuous financial engineering to mask preceding year. On the other hand, the advanced its €300 billion public debts for years. Rating agency economies in Asia Pacific, Japan and Australia, are Standard & Poor’s downgraded Greek sovereign debt to expected to show modest but steady growth of 2.4% and “junk”, sparking fears that a Greek sovereign default may 3% respectively. have a contagion effect on Portugal, Spain and the crisis- battered banks, and spread to the real economy. It finally While these impressive figures confirm the Asia growth took an unprecedented €110 billion bailout from the story, one should not lose sight of the fact that the US European Union and the IMF to avert the immediate crisis. accounts for 25% of the world economy. The world To reduce public debt, Greece and other high debt nations economic growth is thus still very much dependant on US will have to swallow the bitter pill of fiscal-tightening in the growth. Moreover, as the world’s largest consumer market, years to come. the fortunes of Asia’s export-dependent economies cannot be completely decoupled from the the state of US Greece and other EU nations like Portugal, Spain, Ireland, economic health. It will be years before Asia is able to Italy and the UK will have to rein in public spending and generate enough consumption power to rebalance its raise tax revenue to repair public finances damaged by economy and reduce its dependence on US consumers.

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