The Comprehensive Review of Mergers and Acquisitions in the EMEA Region
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FEBRUARY 2010 DEAL DRIVERS The comprehensive review of mergers and acquisitions in the EMEA region Published by: In association with: 00 1 Contents Opening remarks: BBVA 3 Opening remarks: Merrill DataSite 4 Heat Chart 5 All Sectors 6 Financial Services 14 Industrials & Chemicals 18 Energy, Mining & Utilities 22 Consumer 26 Technology, Media & Telecommunications 30 Transportation 34 Pharma, Medical & Biotech 38 Construction 42 Middle East & North Africa 46 BBVA contacts 50 Merrill DataSite contacts 54 About mergermarket mergermarket is an unparalleled mergers and acquisitions intelligence tool. In any market, the life blood of advisers is deal flow. mergermarket is unique in the provision of origination intelligence to the investment banking, legal, private equity, acquisition finance, public relations and corporate markets. With an unrivalled network of journalists and analysts covering M&A in Europe and North America, mergermarket generates proprietary intelligence and delivers it, together with daily aggregated content, on its mergermarket.com platform and by real-time email alerts to its subscribers. With the launch of DealScope, a revolutionary analytical tool, mergermarket clients can now gain a multi-dimensional snapshot of any potential M&A situation at the click of a button. This wealth of intelligence, together with a series of deal databases, individual and house league tables, profiles and editorial, has proven time and time again that this product can and does provide real revenues for our clients. This is apparent when you see that mergermarket is used by over 400 of the world’s foremost advisory firms to assist in their origination process. mergermarket is not interested in news, by then the opportunity has usually passed. mergermarket focuses on revenue-generating intelligence and proves daily that it is one of the most useful and powerful tools for the M&A market. Opening remarks: BBVA mergermarket, in association with BBVA Corporate Finance and Meanwhile, the largest deals of the year occurred in traditionally Merrill DataSite, is delighted to present the latest edition of Deal defensive sectors such as the Utilities and Pharma industries. Drivers Europe. This report provides a comprehensive review of Healthcare industry mergers have made a significant contribution M&A activity and trends across Europe. to aggregate deal value, which included the merger of Roche and Genentech. The fallout effects of the credit crunch and global financial turmoil, exacerbated by the autumn of 2008, have impacted 2009 M&A M&A activity in 2009 has also been largely characterised by forced activity beyond doubt. The year witnessed the continuation of a divestments as a result of highly-leveraged corporates seeking general decline in overall M&A activity which saw 3,555 deals to reduce debt levels. Additionally, many processes have been valued at €328.7bn, a decrease of 53.7% in value and 34.9% cancelled due to lack of financing (especially for financial buyers). in volume compared to 2008. Activity in the United Kingdom accounted for up to 27.9% of European M&A activity by value and Despite all of the new circumstances faced by M&A participants, 19.1% by number of deals announced. the recovery in the financial markets in early March signalled the beginning of a recuperation, and as such, M&A market activity The 2009 M&A landscape has changed dramatically from the has demonstrated a new spree of large transactions such as the boom just a few years ago. The scarcity of new money from Cadbury raid by Kraft Foods. banking sources for funding either corporate or financial sponsor initiatives has been the predominant feature driving both volumes We hope you enjoy reading the report and we appreciate any and values of transactions down to lower-cycle levels. Additionally, feedback you might have. traditional disparity between buyers and sellers in terms of price expectations for those transactions in the pipeline has led to a large number of deals being postponed or cancelled. As a result, a number of traditional advisory houses have lost grip of their leading positions within the league tables, leaving room for independent advisory firms, corporate finance boutiques and universal banks with commercial roots which have gained market share at the expense of those ‘bulge bracket’ institutions. It is clear that a new stage has emerged for advisory roles, given that for the most part, corporates rely on their relationship with banks for an increasingly integrated provision of banking services in terms of advisory, financing, and complementary Mario Pardo Bayona financial services being now rendered by universal banking model Managing Director entities. As a result, many institutions within this category have BBVA Corporate Finance strengthened their presence within the advisory space. A clear Madrid example was the announcement of the absorption of the Spanish Infrastructure group Ferrovial by its subsidiary Cintra late in July last year. This landmark transaction, warmly welcomed by the financial markets and one of the largest deals in Europe in 2009, signalled a defining moment for Ferrovial Group. The company was able to weather a new economic climate and restore financial soundness following the transformative acquisition of BAA. 3 Opening remarks: Merrill DataSite Welcome to the full-year 2009 edition of EMEA Deal Drivers, More broadly, dealmakers’ appetites to broker large-cap brought to you by mergermarket in association with Merrill transactions seemed ever greater as the year progressed. In the DataSite and BBVA Corporate Finance. This Deal Drivers first half of the year, for instance, the number of transactions publication provides readers a broad and detailed review of the valued at €500m or more totalled just 46, but rose by one-third to major trends and activity in European M&A. 61 in the remaining six months, offering an encouraging sign for the European deal market in the year ahead. Clearly, the M&A marketplace underwent a profound change over the last year as companies and deal makers grappled with the As firms set forth to seize on new opportunities and avoid challenges of a hostile business climate in which the prevailing potential pitfalls in the recovering market, Merrill DataSite uncertainty and tight liquidity conditions stymied deal flow. offers the excellent and secure virtual data room (VDR) solution Admittedly, lingering challenges persist and the frenzied pace of that streamlines the due diligence process, providing improved activity that characterised the pre-crisis deal market will not be information management as well as cost-cutting and time-saving quick to return, but there is no doubt that M&A is making its way capabilities in a deal market where such attributes are paramount. back onto the corporate agenda. If you would like any information about how Merrill DataSite can assist you in executing your business’ M&A strategy, please visit In point of fact, the volume of quarterly M&A increased by 13.1% our website at www.datasite.com. quarter on quarter in Q4 2009 to 942 transactions, the fastest rate of increase witnessed in the past five years. At the same As always, Merrill DataSite is delighted to present the full-year time, deal valuations also firmed, with aggregate deal value more 2009 edition of Deal Drivers Europe, the comprehensive review than doubling in the final quarter of the year to €128.8bn. Indeed, of M&A transaction activity and trends across Europe. We hope Europe saw a number of blockbuster transactions in 2009 such that you continue to find it useful. as the largest announced deal last year, the joint venture between the two UK-listed mining giants in December, Rio Tinto and BHP Billiton in a deal valued at a hefty €39bn. Casting a look to private equity, the asset class clearly struggled this past year with issues surrounding leverage, corporate valuations and a lack of viable targets all conspiring to dampen activity. Nonetheless, the asset class still clambered back from the brink, brokering some notable transactions such as BC Partners and Apollo Management’s announced exit from their combined 64.4% stake in Unitymedia GmbH, the German cable network operator, to Liberty Global, the US-based global cable operator, for €3.5bn. Paul Hartzell Senior Vice President, DataSite Merrill Corporation Ltd London 4 Heat Chart European Heat Chart – Intelligence UK CEE Germanic Italy SEE Nordic Russia France Benelux Iberia Middle TOTAL (excl. East & Russia) North Africa TMT 153 73 80 42 27 41 17 48 28 25 73 607 Industrials & 48 117 109 60 45 52 37 27 28 16 45 584 Chemicals Consumer 87 96 80 41 68 31 35 52 25 26 33 574 Energy, Mining & 81 91 43 31 32 25 57 21 18 14 50 463 Utilities Financial Services 72 79 43 34 24 4 30 18 36 18 103 461 Pharma, Medical & 48 25 51 23 8 42 3 14 17 19 22 272 Biotech Business Services 63 30 27 17 10 18 3 9 33 7 14 231 Leisure 55 17 25 32 15 4 12 17 5 12 16 210 Construction 15 42 16 9 18 7 12 10 5 15 34 183 Transportation 15 30 12 11 9 10 11 10 11 9 18 146 Real Estate 10 22 15 7 11 3 10 4 13 4 35 134 Agriculture 1 17 2 2 4 11 1 3 7 48 Defence 3 2 1 2 2 10 Government 1 0 1 1 1 1 3 8 Other 2 1 4 7 TOTAL 652 641 503 309 271 242 240 231 225 165 459 3,938 Hot Warm Cold 80 50 20 The Intelligence Heat Chart is based on ‘Companies for Sale’ tracked by mergermarket in Europe between 01/07/2009 and 31/12/2009. 70 40 10 Opportunities are captured according to the dominant geography and sector of the potential target company.