2017 M&A Predictor

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KPMG International Contents

Introduction

01 Global sector review Global overview of M&As Financial Services 10 Healthcare & Pharma 12 Industrial Markets 14 Consumer Markets 16 Energy & Utilities 18 Chemicals & Basic Materials 20 04 Technology 22

Banking 26 Insurance 28 Consumer Markets 33 Oil and Gas 34 M&A Tax 36 24

After a record-breaking year for M&A in 2015, it is perhaps no surprise that overall transactional activity was more subdued in 2016.

Geopolitical risks and a stricter regulatory environment both played a part in dampening appetite. Companies were also busy integrating or separating businesses following the deluge of transactions previously announced.

Leif Zierz Global Head of Advisory Managing Partner, KPMG in Germany

In terms of the transactional activity in number as companies look to that did occur in 2016, cross-border other sectors to grow capabilities deals remained the most resilient, in or competencies. terms of both deal value and volume. With increasing talk of protectionism Although cross-border deal value in key markets, it will be interesting was down 3 percent compared to to see the impact on cross-border 2015, the drop is much smaller than transactions. Will companies start the -17 percent decline in total deals. looking closer to home for potential Similarly, cross-border deal volume deals? We feel there is only limited only declined 2 percent over the same capacity to do so, as buyers are period, compared with a fall of 7 frequently looking beyond their current percent in total deals. geography or competencies to grow. The decline in transactional activity Nevertheless, M&A remains crucial during 2016 suggests that many for companies seeking change. businesses are adopting a ‘wait Businesses need to transform more and see’ approach to their growth radically and much faster than is strategies. But this is not sustainable. possible organically. CEOs know Technological disruption is happening this, as we have seen in the CEO everywhere. And as our CEO Outlook Survey’s findings regarding Outlook Survey reveals, this is driving their sentiment for the next 3 years. companies to change their business But we expect this to be a long-term models, sometimes radically, as trend, rather than a short-term reaction they recognize the need to reinvest – and one for which the top global in themselves. corporates are well placed. Indeed, This change in approach is evident in market capacity for M&A is predicted our analysis, which looks at possible to rise by 17 percent in 2017, driven trends in cross-sector deal making. by healthy bottom lines and large There has been a lot of speculation corporate balance sheets. and commentary about cross-sector We look forward to an exciting deal trends. The data separates fact journey in 2017, as we continue to from fiction. The falling value of help our clients successfully balance announced or completed deals overall opportunities and risk amid a rapidly should not lull us into complacency. changing environment. Cross-sector deals are growing

Leif Zierz Global Head of Advisory Managing Partner, KPMG in Germany

2 2017 M&A Predictor

KPMG International’s M&A Predictor is a forward-looking tool that helps member firm clients to forecast worldwide trends in mergers and acquisitions. All the raw data within the Predictor is sourced from S&P Capital IQ.

The Predictor was established in 2007. It looks at the appetite and capacity for M&A deals by tracking and projecting important indicators 12 months forward. The rise or fall of forward P/E (price/earnings) ratios offers a good guide to the overall market confidence, while net debt to EBITDA (earnings before interest, tax, depreciation and amortization) ratios helps gauge the capacity of companies to fund future acquisitions. The Predictor covers the world by sector and region. It is produced using data comprising 2,000 of the largest companies in the world by market capitalization.*

All raw deal data is sourced from Dealogic, as of December 31, 2016. Transactions where a trade buyer has taken a minimum 5 percent shareholding in an overseas company are reflected as a cross-border deal. Entities considered for analysis include Strategic Buyers, Financial Sponsors, Government Institutions, and Sovereign Wealth Funds. All cross-border deals involving China and Hong Kong/British Virgin Islands/Cayman Islands are treated as domestic Chinese transactions.

*The financial services and property sectors are excluded from our analysis, as net debt/EBITDA ratios are not considered relevant in these industries. Where possible, earnings and EBITDA data is on a pre-exceptional basis with the exception of Japan, for which GAAP has been used.

2017 M&A Predictor3

Overall, the volume and value of M&A transactions in 2016 is down from the record Philip Isom highs achieved in 2015. Nevertheless, 2016 Global Head deal value remained robust in comparison with of M&A pre-2015 levels and cross-border deals remain Partner, KPMG in the USA very healthy.

The top 100 global deals are helped to make Q3 and Q4 record dominated by the United States, quarters for mega-deals. led by the pending US$107.8 billion Following the U.S. election, the takeover of Time Warner by AT&T. In potential pro-business political total, the United States accounted environment, in the form of tax and for 54 of the top 100 deals in terms of regulatory reforms, could be a strong target, and 45 of the top 100 in terms driver of 2017 M&A activity. of bidder. October proved to be a record Over one-third of the top 50 month, with nearly half a trillion cross-border deals also involved dollars of M&A announced globally. targets in the United States, but Record-breaking volume was driven bidders were more evenly spread, by CenturyLink’s US$34 billion with deals originating from many acquisition of Level 3 and the merger different countries. of GE’s oil and gas division with Baker Several of the themes that emerged Hughes, as well as the AT&T/Time in 2015 provided tailwinds for M&A Warner mega-merger. However, in 2016, including near-zero interest President Trump has vowed to block rates and companies looking to M&A the AT&T and Time Warner deal, to fuel growth and combat slowing further providing uncertainty for all momentum in the global arena. mega-deals announced in the second Thematically, economic and political half of 2016. uncertainty drove anemic volume in the first half of the year. However, the anticipated rate hikes and uncertainty around policy shifts in 2017 have

4 2017 M&A Predictor

© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 10-year Global Deal Trends (Volume & Value) Value Deals (USDbn) 50,000 $6000 44,561 43,439 44,293 40,873 38,481 45,823 $5000 40,000 42,831 41,698 38,616 38,648 38,104 $4000 30,000 $3000 20,000 $2000

10,000 $1000

0 $4,365.6 $5,179.1 $3,694.3 $2,459.5 $2,944.4 $2,914.0 $2,890.4 $3,010.2 $3,797.3 $4,854.5 $4,011.1 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Announced Value (USDbn) Announced Deals Source: 2017 M&A Predictor, KPMG International

Trend analysis Top 10 Announced Deals in 2016 (by Value)

The total value of deals, remains extremely healthy compared Target Name Bidder Ultimate Parent Name Value (USDm) to previous years. In fact, the value of completed deals exceeded by some margin the value of deals completed Time Warner Inc AT&T Inc $107,888 in 2009-2013, despite the number of deals being fewer. Monsanto Co Bayer AG $66,341

The average deal value declined slightly in 2016 to US$105 Reynolds American Inc British American $58,073 million, down from a 2015 peak of US$119 million. However, (57.8%) Tobacco plc - BAT this is significantly above the 2009-2013 range of US$64 Energy Transfer Sunoco Logistics $51,456 million to US$78 million. Partners LP Partners LP

Global predicted appetite is projected to marginally increase NXP Semiconductors Qualcomm Inc $46,990 NV during 2017, driven by flat market capitalizations and modest net profit growth. Predicted capacity is also projected to go Syngenta AG China National Chemical $46,940 Corp - ChemChina up over the same period by a healthy 17 percent, thanks to a decline in net debt and growth in EBITDA. Spectra Energy Corp Enbridge Inc $42,962 Linde AG Praxair Inc $42,503 Latin America, and the Africa and Middle East regions are jointly the biggest climbers in terms of predicted appetite, Level 3 CenturyLink Inc $33,676 Communications Inc up 7 percent almost completely because of rising market capitalizations. ASPAC (others) is the standout region for Source: 2017 M&A Predictor, KPMG International predicted capacity, at 22 percent. All other regions were showing healthy increases ranging from 10 percent to 18 percent.

Top 10 Announced Cross-Border Deals in 2016 (by Value)

Target Name Target Country Bidder Ultimate Parent Name Bidder Country Value (USDm)

Monsanto Co United States Bayer AG Germany $66,340.6 Reynolds American Inc (57.8%) United States British American Tobacco plc - BAT United Kingdom $58,072.7 NXP Semiconductors NV Netherlands Qualcomm Inc United States $46,990.1 Syngenta AG Switzerland China National Chemical Corp - ChemChina China $46,940.5 Spectra Energy Corp United States Enbridge Inc Canada $42,962.1 Linde AG Germany Praxair Inc United States $42,503.2 ARM Holdings plc (98.5768%) United Kingdom SoftBank Group Corp Japan $31,791.7 Sky plc (61.5969%) United Kingdom Twenty-First Century Fox Inc United States $23,149.2 London Stock Exchange Group plc (Bid No 1) United Kingdom Deutsche Boerse AG Germany $14,206.4 Columbia Pipeline Group Inc United States TransCanada Corp Canada $13,216.4 Source: 2017 M&A Predictor, KPMG International 6 2017 M&A Predictor

© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 10-year Cross-Border Deal Trend (Volume & Value) Value Deals (USDbn) 11,591 11,532 12,000 11,132 $2000 10,172 10,025 9,656 9,323 8,581 9,199 9,000 $1500 9,142 8,326

6,000 $1000

3,000 $500

0 $1,112.5 $1,815.6 $1,119.1 $598.8 $957.3 $879.0 $871.0 $762.0 $1,094.8 $1,432.4 $1,392.8 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Announced Value (USDbn) Announced Deals Source: 2017 M&A Predictor, KPMG International

Cross-border deals Cross-sector deals

Like the global trend, the number of cross-border deals fell The percentage of cross-sector deals in terms of the total back to 2012-2014 levels. The overall value of cross-border number of deals has been steadily rising from the low-30s in deals, however, reached their highest level since 2007, at 2006 to 43 percent of all deals in 2015 and 2016. The value of US$1.3 trillion. This represents 35 percent of the value of all cross-sector deals has wavered slightly, but has also seen an deals globally and is 5 percent higher than 2011. increase to 24 percent of total deal value in 2016, a 2 percent increase over 2015. The proportion of cross-border deals has remained relatively steady over the last 8 years, ranging between 22 percent and The average deal size of cross-sector deals is generally 24 percent. The average size of cross-border deals, however, smaller, at around 50 percent of the average size of all deals has risen significantly over the last 3 years to US$149 million. and about one-third the size of the average cross-border deal. This is its second highest level in 10 years, and compares Most cross-sector deals are commonly seen as bolt-ons to to an average cross-sector deal value of between US$40 to new or existing capabilities. US$60 million over the last 5 years. China and the United States were the dominant players, with Companies in Asia and Europe continue to be acquisitive. 16 of the top 25 cross-sector deals involving bidders from Supported by China’s “going out” policy of encouraging these countries. Cross-sector deals tended not to be cross outbound investment, Chinese companies have helped border. Among the top 25, 16 deals were domestic. This is to drive M&A in 2015 and 2016. However, increasing especially true for the dominant cross-sector countries: 5 out protectionist rhetoric in certain countries, the new Trump of 7 Chinese deals and 8 US deals were domestic. Administration, Brexit and upcoming elections in Europe are In terms of acquisition targets, the United States leads the creating uncertainty. China National Chemical Corp.’s US$43 pack with 11 of the top 25 cross-sector deals by target, billion takeover of Switzerland’s Syngenta AG has recently followed by China with 5 deals. been approved by the Committee on Foreign Investment in the United States (CFIUS), and is awaiting European regulators’ approval. Leading into 2017, Chinese outbound activity is facing increased oversight by Beijing, targeting deals considered “non-core” or “speculative”.

Globally, increased uncertainty around international trade policy may impact M&A in the near-term, however, the long-term outlook remains positive for increased cross- border activity.

2017 M&A Predictor 7

© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. Global sector review We review global sector deal performance over the past year, focusing on key trends likely to affect the global M&A landscape. Our forward-looking M&A Predictor tool provides a perspective for predicted appetite and predicted capacity in 2017.

— Financial Services — Healthcare & Pharmaceuticals — Industrial Markets — Consumer Markets — Energy & Utilities — Chemicals & Basic Materials — Technology, Media & Telecoms

8 2017 M&A Predictor

Mark Flenner Co-head of Silvano Lenoci Global Financial Corporate Services M&A Finance Partner KPMG in the UK KPMG in Italy

M&A activity in the Financial Services The insurance market accounted there is weakness in certain currencies sector during 2016 was down for several deals in 2016, but the and interest rates remain low across marginally from 2015 in terms of the banking sector continues to endure a the globe, it will naturally breed cross- volume of deals, but is in line with the challenging environment, according border activity.” volume of deals between 2011-2014. to Silvano Lenoci, Corporate Finance Partner, KPMG in Italy. “There has been a drive for consolidation in the market, whether “The banking sector continues to be that is domestic or cross-border,” under pressure,” says Lenoci. “There says Mark Flenner, Co-head of Global are still a lot of local issues to work Financial Services M&A, KPMG. “The through, not only in terms of new regulatory burden and associated costs regulations like Basel IV, but also a are increasing, so many companies general lack of capital. There’s also still are looking to spread that out across a huge legacy on the non-performing a wider base. At the same time, there loans side for the next 3 to 5 years.” are limited opportunities for domestic North American buyers were organic growth, so people are buying particularly busy in 2016, with the capability, buying product or buying United States and Canada filling access to customers.” 2 of the top 5 slots in terms of Valuations have also increased, says deal origination. Flenner. “Many buyers are paying a This is expected to continue into lot of money for the right business 2017 when, despite the relatively – and there has been a lot of private low volume of announced deals, the equity activity across the globe. Global level of M&A activity is expected to pension funds, too, have been taking stay strong, particularly in the mid- a more active principal investment market range. strategy than they have done before.” “The big question Financial Services There continues to be a steady rise organizations are grappling with is on bolt-on acquisitions as elevated ‘how do you find more customers?’ valuations have deterred private equity That’s the issue we expect to see firms. Add-ons made up 64 percent of driving M&A transactions over the buyout activity last year, next few years, particularly in sectors up from 61 percent in 2015, like fintech,” says Lenoci. “As long as according to Pitchbook.

10 2017 M&A Predictor

© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 10-year trend for Financial Services (Volume and Value) Value Deals (USDbn) 5,000 $1,200 4,215 4,313 4,295 4,247 4,219 3,958 4,000 3,646 3,508 $900 3,532 3,596 3,000 3,149 $600 2,000

$300 1,000

0 $681.3 $918.3 $1,020.1 $570.7 $484.3 $362.3 $430.0 $345.3 $338.3 $544.7 $341.8 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: 2017 M&A Predictor, KPMG International Announced Value (USDbn) Announced Deals

Top-10 Deals for Financial Services Largest countries of origin by

Top-10 Deals for Financial Services Financial Services

UAE — First Gulf Bank PJSC Largest countries of origin by Financial Services 3 July National Bank of Value (USDm) # of deals UAE — 2016 Abu Dhabi PJSC $14,841.5 USDm China $18,241.8 London Stock Exchange UK — 59 Group plc (Bid No 1) Germany $16,031.7 23 Feb Germany — Deutsche Boerse AG USDm 101 2016 $14,206.4 Canada $15,092.2 29 US — CIT Group Inc (Commercial aircraft leasing business) Japan $8,059.7 6 Oct Bohai Capital China — USDm 34 54 2016 Holding Co Ltd $10,000.0 US $7,312.1 France — Credit Agricole SA (38 Regional Banks) 17 Feb France — Rue La Boetie SAS $8,697.2 USDm 2016

China — CNPC Capital Co Ltd (40%)

5 Sep China — Jinan Diesel Engine Co Ltd $7,968.8 USDm 2016 Largest destination countries by US — Endurance Specialty Holdings Ltd Financial Services 4 Oct Japan — Sompo Holdings Inc $6,284.9 USDm 2016 Largest destination countries by Financial Services

France — AXA SA (10%) Value (USDm) # of deals 1 Apr US $34,445.1 3 2016 France — AXA SA $5,704.4 USDm UK 41 Allied World Assurance $22,925.7 Bermuda — 84 Co Holdings AG 10 18 Dec Fairfax Financial Bermuda $6,112.6 Canada — USDm 2016 Holdings Ltd $4,855.1 China $4,576.8 France — GE Money Bank SCA 76 23 Jun Cerberus Capital Norway $4,468.8 France — USDm 2016 Management LP $4,600.0

Norway — Lindorff Group AB

14 Nov Sweden — Intrum Justitia AB 2016 $4,434.8 USDm

Ultimate Target Name Ultimate Bidder Name Pending Completed

2017 M&A Predictor 11

Andrew Nicholson Global Head of Healthcare M&A KPMG in the UK

Despite the significant number of “There has been a huge amount of EBITDA, is predicted to improve by mega deals over US$10 billion in spend between the United States, 20 percent, as healthcare companies the Healthcare and Pharmaceuticals the United Kingdom and China, as continue to pay down debt. sector – in fact, all the top 10 deals expected, with China in particular These numbers support the exceeded US$5 billion – the value accounting for more smaller-value expectation that there will still be a of announced deals in 2016 is only a deals. Chinese buyers are keen to respectable volume of deals next year, little over half that of 2015. But the acquire IP from Western companies yet the value of deals may drop due volume of transactions is similar to the to drive growth at home, so it’s no to announced tax changes and the level achieved in previous years, with surprise to see Chinese corporates reduction in announced deals in 2016. the exception of the record number so active in originating transactions. in 2015. “The level of transactions In the United States, slower domestic Nicholson believes the fundamentals is likely to have been influenced by growth is driving corporates to look of the sector remain strong and, while forthcoming changes to the rules overseas to increase earnings, whether deal levels may not match 2015, he on tax inversion deals in the United in Europe or beyond,” Nicholson notes. expects them to remain on a par with States,” explains Andrew Nicholson, preceding years. “Japan and Switzerland have also KPMG’s Global Head of Healthcare been active in seeking growth outside “The changes around tax inversion M&A. “The changes will make it less their home markets via M&A. It’s may kill a few potential mega-mergers attractive for corporates to use M&A common for Japanese corporates to but in terms of day-to-day acquisitions, transactions to drive tax efficiencies, buy overseas. Switzerland has some debt is still cheap, cashflow is with the result that corporates may big pharmaceuticals that tend to make good and P/E ratios are strong, have been keen to complete deals limited, but large transactions,” he says. so corporates are still likely to see before the full effect of changes M&A as an attractive option to grow The M&A Predictor data suggests a is felt.” their earnings.” similar message. Corporate appetite The same 3 countries accounted for for M&A transactions, as indicated the highest number of both outgoing by forward P/E ratios, is expected to and incoming deals. The picture is decline by 11 percent over the course less consistent in terms of deal of 2017. The capacity to transact, values, however. however, as measured by net debt/

12 2017 M&A Predictor

© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 10-year trend for Healthcare & Pharmaceuticals (Volume and Value) Value Deals (USDbn) 3500 $650 3,004 2,877 2,818 2,832 2,789 2800 2,583 2,614 $520 2,396 2,480 2,192 2100 2,289 $390

1400 $260

700 $130 $350.9 $275.3 $219.5 $236.3 $248.4 $242.0 $175.7 $307.2 $451.5 $578.0 $325.8 0 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: 2017 M&A Predictor, KPMG International Announced Value (USDbn) Announced Deals

Top-10 Deals for Healthcare & Pharma Largest countries of origin by

Top-10 Deals for Healthcare & Pharma Healthcare & Pharma

US — St Jude Medical Inc Largest countries of origin by Healthcare & Pharma

28 Apr Value (USDm) # of deals US — Abbott Laboratories $29,439.8 USDm 2016 US $26,333.2 31 US — Fortive Corp China $7,455.0 28 13 Jun US — Existing Shareholders $19,720.3 USDm 142 2016 Japan $7,390.7 47

US — Medivation Inc (Bid No 2) Germany $6,779.2 22 Aug US — Pﬁzer Inc $14,321.5 USDm 85 2016 Switzerland $5,313.3

Sweden — Meda AB

10 Feb US — Mylan NV $9,915.5 USDm 2016 Largest destination countries by US — Stemcentrx Inc Healthcare & Pharma 28 Apr US — AbbVie Inc USDm Largest destination countries by Healthcare & Pharma 2016 $9,800.0 Value (USDm) # of deals US — Alere Inc US $18,674.8 44 1 Feb US — Abbott Laboratories $8,390.0 USDm UK 2016 $13,872.0 16 10 US — MultiPlan Inc Sweden $10,649.9 Hellman & Friedman LLC; 5 May 182 US — GIC Pte Ltd; $7,500.0 USDm 54 2016 Leonard Green & Partners LP Spain $6,863.6 IDC Salud Holding Spain — SLU-Quironsalud Germany $6,148.2 5 Sep Germany — Fresenius SE & Co KGaA USDm 2016 $6,428.2

US — AmSurg Corp Global M&A Predictor for Healthcare Global M&A Predictor for Healthcare 15 Jun Envision Healthcare US — $6,092.4 USDm 2016 Holdings Inc Capacity +20% [Net Debt/EBITA] US — Team Health Holdings Inc

31 Oct US — Blackstone Group LP 100% 2016 $6,022.8 USDm

Ultimate Target Name Ultimate Bidder Name Pending Completed

-11% Appetite [Forward P/E ratio] 2017 M&A Predictor 13

Danny Bosker Corporate Finance Partner KPMG in the Netherlands

After a blistering 2015, the Industrial The US$7.7 billion acquisition of “Technology businesses are expected Markets sector had another very active Siemens’ wind power business by to remain popular targets for year for M&A transactions in 2016, Spain’s Gamesa is a case in point. acquirers. Another key sector could be similar to the levels seen between Gamesa gains from Siemens market- environmental technologies – heating, 2011 and 2014. Two of the top 10 leading position in offshore wind ventilation and insulation, anything to deals exceeded US$10 billion, with the energy, while delivering increased do with CO2 reduction. Interest has target and bidder both stemming from opportunities for Siemens to develop been growing quite rapidly over the the United States. its onshore business. past year. Combined with increasing interest from Asian buyers in this “There have been some global factors Looking ahead to 2017, Bosker sector of the market, it looks set to that affected the market over the expects M&A activity to remain high, be another strong year for industrial course of 2016, particularly at the top particularly at the sub-US$1 billion markets deals,” says Bosker. end. Despite that, the appetite for level, and with continuing strong deals was very strong,” says Danny interest from Asia. Bosker, KPMG Corporate Finance His optimism is reflected in the Partner, KPMG in the Netherlands. M&A Predictor data. This shows “One of the main factors driving that forward P/E ratios, our measure M&A activity in Industrial Markets in of corporate appetite for M&A, are 2016 was the hunt for technological expected to rise by 9 percent over the innovation. Companies recognize that course of 2017 – the second-highest to remain competitive, they need to sector increase. This compares to a invest in technology to transform their predicted overall increase of 1 percent businesses. Sitting back and waiting is globally. The capacity to transact is not an option. They need to go out and also expected to increase, with net either develop new business models debt/EBITDA, our measure of capacity, or technologies, or acquire them.” showing a 14 percent improvement over the same period.

14 2017 M&A Predictor

© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 10-year trend for Industrial Markets (Volume and Value) Value Deals (USDbn) 10,000 9,503 9,231 9,372 $800 8,242 8,424 8,949 7,500 8,107 7,890 6,622 $600 7,547 7,528

5,000 $400

2,500 $200

0 $552.9 $659.7 $446.9 $300.9 $376.3 $393.6 $359.5 $352.6 $466.5 $617.0 $458.3 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Announced Value (USDbn) Announced Deals Source: 2017 M&A Predictor, KPMG International

Top-10 Deals for Industrial Markets Largest countries of origin by Top-10 Deals for Industrial Markets Industrial Markets US — Tyco International plc Largest countries of origin by Industrial Markets

25 Jan Value (USDm) # of deals US — Johnson Controls Inc $20,792.9 USDm 2016 Japan $18,172.3 105 US — ADT Corp 170 China $17,258.1 16 Feb US — Protection One Inc $12,388.7 USDm 2016 Canada $16,599.5 125 China — Wuhan Iron & Steel Co Ltd 298 US $16,531.9 23 Sep China — Baoshan Iron & Steel Co Ltd $9,406.0 USDm 104 2016 Germany $11,735.2

China — YTO Express Co Ltd

23 Mar China — Dalian Dayang Trands Co Ltd $9,074.8 USDm 2016 Largest destination countries by Australia — Asciano Ltd (86.6669%) Industrial Markets Canada — Canada Pension Plan $8,557.3 USDm Largest destination countries by Industrial Markets Investment Board-CPPIB Value (USDm) # of deals (27.5%/19.1%/16%/12%/12%); Global Infrastructure Partners; US $27,753.3 GIC Pte Ltd; British Columbia 68 Investment Management Corp; 15 Mar Australia $13,352.5 2016 China Investment Corp 257 Germany 203 US — BE Aerospace Inc $12,739.0

23 Oct US — Rockwell Collins Inc $8,228.5 USDm UK $10,489.4 2016 75 126 Spain $9,605.5 Spain — Siemens AG (Wind Business)

17 Jun Gamesa Corporacion Spain — USDm 2016 Tecnologica SA $7,736.2

Australia — Port of Melbourne Corp (50-year lease of the Port Global M&A Predictor for Industrials of Melbourne) $7,308.9 USDm Global M&A Predictor for Industrials Australian Government Australia — Future Fund; Global Capacity Infrastructure Partners; [Net Debt/EBITA] QIC Ltd; Ontario Municipal 19 Sep Employees Retirement Appetite +14% 2016 System — OMERS [Forward P/E ratio] Fomento de Construcciones y Spain — Contratas SA — FCC (24.5925%) +9% 4 Mar Mexico — Grupo Carso SAB de CV 2016 $6,741.5 USDm

China — SF Holdings (Group) Co Ltd

23 May Maanshan Dingtai Rare Earth China — USDm100% 2016 & New Materials Co Ltd $6,610.1

Ultimate Target Name Ultimate Bidder Name Pending Completed

2017 M&A Predictor 15

James Murray Global Head of Consumer M&A KPMG in the UK

Despite the broader backdrop of such as Mondelez’s sale of its sugar “There are a number of factors political and economic uncertainty in confectionery business in France and creating a positive environment for 2016 it was still a strong year for M&A Vegemite in Australia.” further deal activity in 2017: active deal values in the Consumer sector, challenge of the traditional FMCG In the mid cap market, he adds, with the third largest global deal of business model from predators seeing activity was driven by a number of 2016 originating in this sector. While value and shareholders wanting higher smaller but attractive higher-growth the levels are below 2015, they are returns; corporate balance sheets in companies being acquired by larger significantly above the levels seen good shape; Private Equity interest corporates seeking to drive sales between 2009 and 2013. “There in consumer assets remains strong; or gain access to faster growth were several large strategic deals in financing costs low. However, the categories such as healthy snacking 2016 that bumped up the overall value wider macro outlook and evolving and free-from products. of deals in the sector, such as the consumer confidence may impact US$46 billion BAT bid for Reynolds The United States, China and Japan the appetite for further M&A, but American and Danone’s US$10 billion remained the most-prolific originators this will be a market-by-market basis,” acquisition of WhiteWave Foods. 2017 of deals with France and Singapore says Murray. has started strongly and we expect trailing behind. According to the M&A Predictor, further large cap activity following “The theme of capital flows from Asia corporate appetite for M&A among Reckitt’s deal to buy Mead Johnson to Europe continues to be evident businesses in the Consumer for $17 billion, the €50 billion Luxottica/ with significant interest from Asian Discretionary and Consumer Staples Essilor merger and Kraft Heinz’s $143 buyers in several businesses that are sectors, as measured by forward P/E billion aborted approach for Unilever,” on the market, or that soon will be. ratios, is expected to rise by 8 percent says James Murray, Global Head of Not only from China, but also Japan, and 1 percent, respectively. Similarly, Consumer M&A, Deal Advisory. where there is a trend toward acquiring the capacity to transact is predicted to “These deals represent an ongoing European businesses because they are improve by 16 percent and 10 move towards consolidation, with not achieving the growth domestically. percent, respectively. a hard focus on cost reduction as Asahi’s acquisition of Peroni is a good well as synergies to drive margin example of this and we expect to see improvement and earnings growth. In further activity in the beer sector as some sectors, businesses are looking part of the fallout of the AB InBev to move from being strong regionally deal,” says Murray. to truly global players. At the same time, large conglomerates are also refining and focusing their portfolios,

16 2017 M&A Predictor

© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 10-year trend for Consumer Markets (Volume and Value) Value Deals (USDbn) 7500 $640 6,362 6,351 6,163 5,910 5,733 5,383 5,340 5,127 $480 5,815 5,693 5000 5,373

$320

2500 $160 $367.8 $575.9 $454.8 $188.8 $226.4 $218.2 $310.1 $277.4 $421.5 $546.3 $383.5 0 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: 2017 M&A Predictor, KPMG International Announced Value (USDbn) Announced Deals

Top-10 Deals for Consumer Markets Largest countries of origin by Top-10 Deals for Consumer Markets Consumer Markets Reynolds American Inc Largest destination countries by Consumer Markets US — (57.8%) Value (USDm) # of deals 21 Oct British American Tobacco UK — 2016 plc — BAT $58,072.7 USDm US $1,01,684.0 55 UK — WhiteWave Foods Co Japan $8,774.2 15 7 Jul 194 France — Danone SA USDm 2016 $12,466.7 UK $8,529.7 Yum China Holdings Inc Czech 138 China — $7,726.9 (95%) Republic 17 Oct China — Existing Shareholders 20 2016 $9,526.7 USDm France $6,489.8

Japan — Sharp Corp (66.06%)

25 Feb Hon Hai Precision Industry Taiwan — $7,984.0 USDm Largest destination countries by 2016 Co Ltd (57.5% / 8.41%);

Czech SABMiller Ltd Consumer Markets — Republic (CEE beer brands) Largest countries of origin by Consumer Markets 13 Dec Japan — Asahi Group Holdings Ltd USDm Value (USDm) # of deals 2016 $7,726.9 UK $60,284.5 57 US — Adient plc 107 China $29,599.4 17 Oct US — Existing Shareholders $7,235.3 USDm 2016 109 France $18,402.3 US — Lamb Weston Holdings Inc US $14,591.4 174 1 Nov 76 2016 US — Existing Shareholders $6,732.3 USDm Japan $14,448.4 South — Bid Corp Ltd Africa 30 May South — Existing Shareholders $6,562.0 USDm Global M&A Predictor for Consumer discretionary 2016 Africa Global M&A Predictor for Consumer Discretionary Hilton Worldwide Holdings US — Capacity Inc (25.0056%) [Net Debt/EBITA] 24 Oct Hainan Trafﬁc Control China — USDm 2016 Holding Co Ltd $6,496.9 Appetite +17% US — Cabela's Inc [Forward P/E ratio]

3 Oct Bass Pro Group LLC-Bass US — 100% USDm 2016 Pro Shops $5,553.7 +2%

Ultimate Target Name Ultimate Bidder Name Pending Completed

GlobalGlobal M&A M&A Predictor Predictor for Consumer for staple Consumer Staple

Capacity [Net Debt/EBITA] +9%

-4% Appetite [Forward P/E ratio] 2017 M&A Predictor 17

Henry Berling Managing Director and Head of US Energy Investment Banking for KPMG Corporate Finance KPMG in the US

Although the number of deals fell in in terms of the global picture, they “We expect to see a new wave of 2016, the value of Energy and Utilities are looking externally for inorganic transactions in 2017 as part of a trend transactions saw a healthy increase to growth opportunities.” towards market rationalization. This will pre-2007 levels, as the sector began to likely include a focus on infrastructure The data seems to support this view. regain confidence. Indeed, 2016 may and transportation-type assets, which Deal values in the sector rose to be seen as the turning point as total are seen as ‘safe havens’ at times of US$753.4 billion, up from US$619.3 deal values hit their highest level for volatility,” says Berling. billion in 2015 and led by several major almost a decade. “Over the past 18 transactions out of the United States, This view is supported by data from months, as oil prices have decreased, which accounted for 5 of the top the M&A Predictor, which forecasts the ability of companies to invest in 10 deals. forward P/E ratios, our measure of M&A has been reduced,” says Henry appetite, to increase by 16 percent Berling, Managing Director and Head “The United States has several big for corporates in the Energy sector of US Energy Investment Banking for energy and power companies with and 6 percent in the Utilities sector, KPMG Corporate Finance, KPMG in large sums of capital that needed up to December 2017. Energy the United States. “This had a negative to find homes. The size of these corporates’ capacity to transact, as impact on earnings. Similarly, from a companies tends to mean that their measured by net debt/EBITDA, is power and utilities perspective, the M&A transactions tend to be big, too,” predicted to improve by 23 percent global slowdown in GDP growth has says Berling. over the same period, while capacity led to low load growth. This, coupled The renewables market also in the Utility sector is expected to with a glut of gas in key markets like continues to be attractive, he adds, decline marginally. the United States, kept power pricing with favorable tax legislation and down, meaning earnings and top-line subsidies that are helping to drive the growth were low.” development of renewables, relative Berling notes that companies were to conventional energy. Wind and largely in ‘survival mode’ in 2015, solar development, for example, has looking internally to find savings and outpaced conventional assets. drive earnings growth. “But now that the worst seems to be behind us

18 2017 M&A Predictor

2,602 3,820 2,464 $800 4000 3,545 3,483 3,279 3,176 3,139 3,159 2,534 $640 3000 $480 2000 $320

1000 $160 $761.5 $892.3 $473.5 $419.2 $597.7 $585.5 $627.3 $532.2 $634.3 $619.3 $753.4 0 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: 2017 M&A Predictor, KPMG International Announced Value (USDbn) Announced Deals

Top-10 Deals for Energy & Utilities Largest countries of origin by Top-10 Deals for Energy & Utilities Energy & Utilities US — Energy Transfer Partners LP Largest countries of origin by Energy & Utilities

21 Nov Sunoco Logistics Value (USDm) # of deals US — 2016 Partners LP $51,455.7 USDm Canada $1,06,613.3 5 6 US — Spectra Energy Corp China $27,790.0 6 Sep Canada — Enbridge Inc $42,962.1 USDm 66 91 2016 US $19,664.8 US — Baker Hughes Inc Russian $14,987.4 31 Oct Federation US — General Electric Co $32,202.0 USDm 2016 Qatar $11,649.2 54

US — Energy Future Holdings Corp

29 Jul US — NextEra Energy Inc $18,400.0 USDm 2016

National Grid plc Largest destination countries by UK — (Gas distribution business) Energy & Utilities UK — Macquarie Infrastructure & $14,523.6 USDm Largest destination countries by Energy & Utilities Real Assets Pty Ltd; CIC Capital Ltd; Value (USDm) # of deals Allianz Capital Partners US GmbH; $1,02,289.7 BT Pension Scheme 33 Trustees Ltd; Brazil $22,378.7 Dalmore Capital Ltd; Qatar Investment Russian 15 Authority; Federation $16,244.3 97 8 Dec International Public 13 2016 Partnerships Ltd" India $14,157.5 21 US — Columbia Pipeline Group Inc Australia $12,405.2 17 Mar Canada — TransCanada Corp USDm 2016 $13,216.4

Essar Oil Ltd; Vadinar India — Oil Terminal Ltd - VOTL Russian GlobalGlobal M&A M&A Predictor Predictor for Energy for Energy Federation — Rosneftegaz OAO; $12,911.8 USDm Traﬁgura Beheer BV; United Capital 15 Oct Partners Advisory Capacity 2016 OOO-UCP +23% [Net Debt/EBITA]

Australia — Ausgrid Pty Ltd (50.4%) Appetite [Forward P/E ratio] 20 Oct Westscheme Pty Ltd; Australia — $12,413.9 USDm 2016 IFM Investors Pty Ltd +16%

US — Westar Energy Inc

31 May US — Great Plains Energy Inc 2016 $12,153.5 USDm

NorthStar Realty US — Finance Corp 3 Jun NorthStar Asset US — USDm 2016 Management Group Inc $12,030.6

Ultimate Target Name Ultimate Bidder Name Pending Completed 2017 M&A Predictor 19

Christian Specht Deal Advisory Partner, KPMG in Germany

2016 was quite a notable year in the Another example of the 3 percent in appetite for transactions, Chemicals and Basic Materials sectors, transformational deals driving M&A as indicated by forward P/E ratios. with total deals reaching their highest activity is the pending US$3.2 billion However, the capacity of companies value for 10 years. This included acquisition of surface treatment to transact, measured by net debt/ several blockbuster Chemicals deals provider Chemetall by BASF. EBITDA, is predicted to rise by exceeding US$40 billion, the most 18 percent. “These deals are signs of the ongoing notable of which was the US$66.3 portfolio shift we are seeing in the billion Bayer-Monsanto deal, following market,” says Specht. Companies on from 2015’s headline-grabbing Dow previously were looking for the ‘perfect and DuPont merger. 10,’ he adds. “Now, they are realizing “The Bayer-Monsanto deal is a good that is unrealistic, so they are happy example of the kind of transformational to go with an 80 or 90 percent fit transactions we’ve seen in the instead. This is having an impact on Chemicals sector recently. It shows overall levels of M&A activity, as those there is a huge appetite for large acquisitions are then trimmed to better transactions. Strong earnings over fit the portfolio and non-core activities the last 3 years and favorable funding are sold off.” means that a lot of companies have The M&A prospects for the overall large war chests to invest. And with Basic Materials sector, which includes debt funding still cheap, there is strong Chemicals, is expected to remain at appetite for M&A,” says Christian a similar level next year. The M&A Specht, partner at KPMG in Germany. Predictor forecasts an increase of

20 2017 M&A Predictor

© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 10-year trend for Energy & Utilities (Volume and Value) Value Deals (USDbn) 6,000 5,688 $500 5,236 5,339 5,010 5,021 $400 3,834 4,056 4,500 4,003 3,741 4,537 3,508 $300 3,000 $200

1,500 $100

0 $345.8 $467.6 $296.5 $150.6 $297.8 $332.1 $245.5 $166.3 $258.1 $304.3 $387.0 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Announced Value (USDbn) Announced Deals Source: 2017 M&A Predictor, KPMG International

Top-10 Deals for Basic Materials Largest countries of origin by Top-10 Deals for Basic Materials Basic Materials Largest countries of origin by Basic Materials US — Monsanto Co Value (USDm) # of deals 23 May Germany — Bayer AG 2016 $66,340.6 USDm Germany $74,538.5 67 52 Switzerland — Syngenta AG China $60,614.5

03 Feb China — China National $46,940.5 USDm 26 2016 US $56,829.8 70 Chemical Corp - ChemChina Germany — Linde AG Switzerland $5,844.8 148 20 Dec US — Praxair Inc $42,503.2 USDm 2016 Japan $5,140.4

Canada — Agrium Inc

12 Sep Canada — Potash Corp of $18,333.4 USDm 2016 Saskatchewan Inc Largest destination countries by US — Valspar Corp Basic Materials 20 Mar US — Sherwin-Williams Co $11,277.8 USDm Largest destination countries by Basic Materials 2016 Value (USDm) # of deals US — Capsugel SA US $95,161.2 4 15 Dec Switzerland — Lonza Group AG $5,500.0 USDm 34 2016 Switzerland $47,027.6 51 US — Air Products & Chemicals Inc Germany $46,999.6 (Performance Materials Operations) 06 May 187 9 2016 Germany — Evonik Industries AG $3,800.0 USDm Brazil $6,641.6

Israel — Adama Agricultural Israel $5,181.8 Solutions Ltd 17 Jul $3,706.8 USDm 2016 China — Hubei Sanonda Co Ltd

US — Axiall Corp

29 Jan GlobalGlobal M&A M&A Predictor Predictor for Basic Materials for Basic Materials US — Westlake Chemical Corp $3,521.9 USDm 2016

Polyus Gold OAO Capacity Russian — Federation (31.747%) [Net Debt/EBITA] 11 Mar Russian — Polyus Gold OAO $3,447.1 USDm 2016 Federation Appetite +18% Target Name Bidder Ultimate Parent Name Pending Completed [Forward P/E ratio]

+3%

2017 M&A Predictor 21

Philip Isom Global Head of M&A, Head of US Corporate Finance and Restructuring KPMG in the US

The Technology, Media and Telecoms says Philip Isom, Global Head of M&A, This ties in with KPMG’s M&A (TMT) sector posted strong M&A KPMG in the US. Predictor data, which also suggests results in 2016, despite a lower a positive TMT deals market in 2017. “The slowdown in deal volumes was number of deals than the record Although forward P/E ratios, our probably attributable to increased 2015 levels. measure of appetite, are predicted to global uncertainty in the run up to the remain largely unchanged in both the Although the number of deals was US presidential elections, the potential Technology sector (0 percent change) closer to 2014 levels, deal values were impact of Brexit, volatile currency and the Telecoms sector (1 percent only marginally below 2015 figures, markets and other geopolitical factors,” increase), the capacity to transact, however, suggesting that bigger deals says Isom. as measured by net debt/EBITDA, is are driving the TMT M&A market. Despite fewer deals overall, several expected to remain very strong, driven The United States, in particular, saw a high-profile mega-deals helped by plummeting debt levels. flurry of bigger-ticket deals, accounting deal value remain high. As well for 80 percent of the top 10 biggest as the AT&T Time Warner mega- deals by origin, led by the proposed deal, other landmark transactions US$107.8 billion AT&T acquisition of include Qualcomm’s acquisition of Time Warner. NXP Semiconductors for US$47 billion and the acquisition of Level 3 China was the second biggest Communications by CenturyLink for originator of deals, albeit with largely US$33 billion. lower value transactions. With several blockbuster deals “American and Chinese companies announced during 2016, completed have focused on cross-border deals deal values at least look set to remain to counter slowing growth at home strong into 2017. and, in the case of China, to acquire technology and meet upgrading demand of domestic consumers,”

22 2017 M&A Predictor

© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 10-year trend for TMT (Volume and Value) Value Deals (USDbn) 15,000 $1200 12,648 11,653 12,000 11,079 $900 9,847 9,634 9,322 9,220 9,474 9,005 8,868 8,395 9,000 $600 6,000

$300 3,000

0 $927.9 $884.5 $520.5 $427.2 $487.7 $494.3 $485.0 $649.0 $761.3 $1,168.6 $1,016.0 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Announced Value (USDbn) Announced Deals Source: 2017 M&A Predictor, KPMG International

Top-10 Deals for TMT Largest countries of origin by TMT

Top-10 Deals for TMT Largest countries of origin by TMT US — Time Warner Inc Value (USDm) # of deals US $1,12,213.8 22 Oct US — AT&T Inc 31 2016 $1,07,887.8 USDm China $54,539.7 205 Netherlands — NXP Semiconductors NV Japan $44,830.5 593 27 Oct US — Qualcomm Inc USDm 204 2016 $46,990.1 UK $24,199.3 US — Level 3 Communications Inc 229 South Korea $10,107.8 31 Oct US — CenturyLink Inc 2016 $33,675.6 USDm

UK — ARM Holdings plc (98.5768%)

18 Jul Japan — SoftBank Group Corp $31,791.7 USDm Largest destination countries by TMT 2016 Largest destination countries by TMT US — LinkedIn Corp Value (USDm) # of deals US — Microsoft Corp 13 Jun $28,119.9 USDm UK $85,697.0 2016 80 90 UK — Sky plc (61.5969%) US $83,465.0 50 303 09 Dec US — Twenty-First Century Fox Inc $23,149.2 USDm Netherlands $58,043.6 2016

US — Linear Technology Corp India $10,250.6 511

26 Jul China $10,188.5 2016 US — Analog Devices Inc $14,764.0 USDm

US — IMS Health Holdings Inc

03 May Quintiles Transnational US — USDm 2016 Holdings Inc $14,725.4

US — NetSuite Inc 28 Jul US — Oracle Corp $9,464.4 USDm 2016 Global M&A Predictor for Technology Harman International US — Industries Inc Global M&A Predictor for Technology 14 Nov South — Samsung Electronics Co Ltd USDm 2016 Korea $8,854.3 Capacity Target Name Bidder Ultimate Parent Name Pending Completed +121% [Net Debt/EBITA]

Global M&A Predictor for GlobalTelecommunication M&A ServicesPredictor for Telecoms

Appetite Capacity [Forward P/E ratio] [Net Debt/EBITA] +16.7% Appetite +7% [Forward P/E ratio]

+1%

2017 M&A Predictor 23

Our in-depth commentary goes beyond the global sector review to provide insight into the larger trends impacting some major sectors. A special report on M&A Tax offers a global view from a tax perspective.

— Banking — Insurance — Consumer Markets — Oil & Gas — M&A Tax

24 2017 M&A Predictor

Stuart Robertson Global Financial Services Deal Advisory Lead, KPMG in Switzerland

While the fundamentals in global Looking ahead with renewed are expected to follow similar trends, banking and capital markets remained optimism, we expect a reasonably including setup of new exchange relatively unchanged in 2016, the year healthy level of M&A in 2017, with and utilities companies. We also did not prove to be a record breaker US political uncertainty subsiding expect to see divestments because for deal activity as the operating following the election, and a possible of consolidation and the increased environment became much tougher relaxing of regulation, plus expected scrutiny of competition authorities. to navigate. Deal value and volume interest rate hikes, easing some of Continued European banking remained relatively stable compared to the pressure on local US banks. And overcapacity makes further domestic 2015 but we had anticipated a higher despite the current growth focus on consolidation there look inevitable. level of deal activity for 2016. But in domestic markets, global and regional In 2017, we continue to expect low the end it was a year characterized by opportunities still exist for strong growth and declining EU lending, caution and uncertainty amid continued global banks. Banks will eye wealth a turbulent political landscape regulatory pressures plus an array of management businesses as margins (Italian referendum, Dutch election, significant geopolitical and economic tighten, while regulatory and capital Brexit, French election), a continued events: the US election, Brexit, China’s constraints will continue to factor low-interest environment and the economic slowdown and the continued highly in inorganic growth decisions. ‘uberisation’ of the banking sector. low-interest rate environment. Top trends that are likely to continue M&A deals among mid-tier EU banks Domestic deals accounted for a 73 this year include the wholesale market are more likely than large-scale deals. percent share of total deals, with infrastructure industry’s continued NPLs will be a top priority for the ECB most of those announced in the US convergence of listing platforms/ as weaker banks prepare multi-year and China. Deal activity overall was exchanges, data companies and post- strategic plans and look to deleverage largely concentrated among small and trade services. Competition to acquire NPLs. medium-sized banks, as continued data companies will drive up valuations Meanwhile, large Japanese banks will regulation and increasing capital of these companies, while competition remain active in acquiring overseas requirements inhibited acquisitions by authorities will continue to review financial institutions and fintech-related the large global banks. almost every transaction in wholesale companies against the background of market infrastructure. Under a cloud of caution, the year slow economic growth and a shrinking nevertheless did produce a few Look for the wave of consolidation population in the home market. Key noteworthy mega-deals, among them: and M&A across wholesale market areas of focus are the US and ASEAN the anticipated merger between the infrastructure dominating North countries. More regional consolidation London Stock Exchange and Deutsche American and European markets until is also expected amid the push toward Borse, the acquisition of regional Crédit now to push into Asia in 2017–18, digital banking, privatized Japan Post Agricole banks by Sacam Mutualisation where the battle to be the ‘gateway’ Bank’s increased saving limit posing and the merger between National Bank exchange for Asia will accelerate. competition to regional players, and of Abu Dhabi and First Gulf Bank. Frontier markets, including Africa, negative or ultra-low interest rates. South America and Eastern Europe,

26 2017 M&A Predictor

© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. Globally, fintech will remain front and including further consortia activity. in the banking sector in areas such centre as a key growth driver this Financial institutions will continue to as loan portfolios, payments, leasing year. We expect to see an increase in look for ways to embrace the promise and financing, brokerage services and investment into enabling technology. of these innovations via different utilities. A wall of capital is poised Key areas of focus are security, fraud avenues, including partnerships, direct and desperate to deploy, with private prevention, regulation management, investment and M&A transactions. equity houses, pension and sovereign compliance and risk management, data wealth funds, insurers and high-cash Other key considerations that we see analytics, customer personalization deposit holders looking for returns. The impacting the growth playbook this and blockchain. With strong interest most-active deal corridors will be from year as new buyers enter the market in emerging technologies like the US to ASPAC and to include opportunities for non-FS blockchain, we predict continued Western Europe. buyers to make attractive investments organic and inorganic investments,

Top 10 Trends

A wave of M&A emerging in the wholesale market 1 infrastructure industry, while the battle for Asia ‘gateway’ exchange will accelerate M&A.

US regional and local banks will bulk up, with continued 2 consolidation in 2017.

Continued European banking overcapacity makes further 3 domestic consolidation look inevitable.

Chinese banks will focus more on domestic M&A, eyeing 4 high-growth tech firms.

Large Japanese banks will remain acquisitive overseas, 5 while more regional consolidation is expected.

6 An active NPL market will fix weak balance sheets.

A wall of capital is desperate to deploy: Private equity 7 houses, pension and sovereign wealth funds, insurers and high-cash deposit holders are looking for returns. New buyers will be entering the market in 2017.

8 Fintech will remain front and center in 2017.

Banks will eye wealth management businesses as 9 margins tighten.

The most-active deal corridors: from the US to ASPAC 10 and to Western Europe.

2017 M&A Predictor 27

Ram Menon Global Insurance Deal Advisory Lead, KPMG in the US

Disruption is shaking the insurance strategic clarity regarding which Companies told us that transforming industry to its very foundation and markets, geographies, products their business and operating models is the changes underway are not and channels insurers choose to the number one motivator for deal- cyclical in nature. New technologies, play in going forward, and which making: 33 percent of firms said they competitors, markets and regulations processes, technology infrastructure, intend to undertake M&A to redefine – plus changing consumer behaviors talent and culture will best support their business and operating model, – are creating tremendous new transformation of the operating while 40 percent intend to enter opportunities. model for future growth. To that end, partnerships and alliances. innovative startups are increasingly At the same time, however, these Asia-Pacific is expected to see the seen as attractive targets, as powerful dynamics are posing most partnerships and alliances forged, evidenced by recent high multiples significant risk to the legacy insurance with China and India ranking as the and valuations of technology-enabled business model, forcing organizations top two destinations in the region. business models. to reassess their portfolio of business The majority of the respondents also and rationalize their global footprint As global insurance companies said they intend to forge strategic to strategically determine ‘where to approach the new deal landscape in partnerships and alliances with larger play’ and ‘how to win’ in the future. an industry under transformation filled firms, those with values ranging from Firms will need to pursue a deeper with new opportunities, they will also US$250 million to US$1 billion. understanding of how they want need to be wary of pitfalls and respond The survey also noted that deal- to serve their customers and what wisely. In this evolving market, insurers making in the insurance industry could propositions they want to offer. will need to be equipped with holistic shift into high gear, with 84 percent data and analytics-enabled deal- An immediate consequence of this of firms indicating their intention to evaluation capabilities, particularly trend is an anticipated increase in deal undertake one to three acquisitions, regarding due diligence, integration and activity in the global insurance industry. and 94 percent planning at least one separation activities, in order to extract Industry players are now becoming divestiture. maximum value from their proposed more strategic about inorganic growth acquisitions. initiatives, with traditional reactive No better time for an approaches to M&A opportunities A recent survey we commissioned M&A ‘playbook’ being viewed as insufficient in the conducted interviews with 200 drive toward investment that generates insurance M&A decision-makers One of the first steps insurers may transformation over the long term. across all segments and regions want to consider is the development and what we heard indicates that of an enterprise-wide M&A organizations are indeed now A strategy-aligned approach ‘playbook’ to enhance and deepen recognizing the need to strategically is emerging their evaluation of the strategic-fit reassess their business and operating a potential acquisition target offers. models and redefine their M&A Taking a strategy-aligned M&A Creating a robust, strategy-aligned ambitions and appetite. approach will certainly enhance enterprise-wide ‘M&A playbook’ –

28 2017 M&A Predictor

© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. one that covers due diligence, deal ranged between US$10 million and economic growth and changing geo- evaluation, and post-deal integration/ US$50 million. political risks across the mature and separation processes – will improve emerging markets, insurers will look Strategy-aligned M&A will certainly deal outcomes over the long term. The beyond their domestic borders to buy require a different mindset that days of simply pursing any or all deal or sell assets abroad. includes a renewed focus on opportunities that present themselves execution: 39 percent of firms said 2. Portfolio rationalization and strategic are disappearing fast. aligning their deal evaluation process repositioning of businesses by larger Businesses also told us that to corporate strategy objectives is insurers is expected to drive global partnerships are the clear choice for the key factor for M&A success. That M&A activity. Divestiture of non-core transforming the business model: said, there is clearly more work to be business segments in strategically 87 percent of organizations expect done. Most organizations surveyed non-core geographies is expected to partner for gaining access to admit that their corporate development to be a key driver for increased new operating capabilities, and 76 and M&A teams’ objectives were not deal activity. percent are looking to partnerships fully aligned to their overall corporate 3. Greater alignment of corporate for gaining access to new technology strategy. Many respondents also strategy and M&A objectives infrastructure. To stay abreast of admitted that their M&A priorities will provide an edge to buyers as emerging trends in technological continue to be ‘reactive’ to market competition for deals rises. Strategy- innovation, several insurance opportunities, as opposed to targeting aligned approach to M&A planning companies have already established deals strategically aligned to overall and execution will result in better or are considering establishing in- corporate strategy. deal outcomes over the long-term house corporate venture capital compared to a ‘reactive’ approach of (CVC) investment capabilities, largely Trends that will shape simply pursuing deal opportunities as as a way to invest in innovative 2017 deal-making they arise. technology capabilities. 4. The hunt for innovation will Among firms with established CVC As insurers formulate their M&A increasingly shape insurers’ rationale models, the majority stated that their strategies for the year ahead, we for doing deals. Companies with a investment activities are focused on believe the following trends will shape strong digital model and startups with non-insurance technologies. While deal activity: advanced technology will attract a more than a quarter of insurers with 1. Cross-border activity will increase multitude of willing suitors as legacy CVC models boast more than US$1 as insurers worldwide seek to diversify companies seek to transform their billion in allocations, 90 percent say the their geographic risks and earnings business models through acquisitions. median value of their CVC investments profits: With stagnation in global

Trends that will shape 2017 deal-making As insurers formulate their M&A strategies for the year ahead, we believe the following trends will shape deal activity:

Cross-border activity will increase as insurers Greater alignment of corporate strategy and 1 worldwide seek to diversify their geographic risks 3 M&A objectives will provide an edge to buyers as and earnings profits: With stagnation in global competition for deals rises. Strategy-aligned M&A economic growth and changing geo-political risks planning will result in better deal outcomes over across the mature and emerging markets, insurers the long-term compared to a ‘reactive’ approach of will look beyond their domestic borders to buy or simply pursuing deal opportunities as they arise. sell assets abroad.

The hunt for innovation will increasingly shape 2 Portfolio rationalization and strategic repositioning 4 insurers’ rationale for doing deals. Companies with of businesses by larger insurers is expected to a strong digital model and startups with advanced drive global M&A activity. Divestiture of non- technology will attract a multitude of willing suitors core business segments in strategically non-core as legacy companies seek to transform their geographies is expected to be a key driver for business models through acquisitions. increased deal activity.

2017 M&A Predictor 29

© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. The road to strategy-aligned deal-making in 2017 The modern M&A landscape is filled with both opportunities and pitfalls for global insurance companies. To navigate this landscape successfully, acquirers cannot divorce their M&A activities (both target identification and target evaluation) from their broader strategy. They need to pay close attention to their strategic growth objectives, as it relates to transforming their business and operating model, and recognize that not all potential acquisition targets are capable of helping fulfill them.

Key findings:

Deal-making shifts into high gear Strategy-aligned M&A requires a different mindset and renewed execution focus

said that aligning the deal evaluation process to corporate strategy objectives was the most important factor for plan at least one M&A success divestiture plan to conduct 1-3 acquisitions in 2017 Yet 7 of the respondents said their priority is to be reactive to market opportunities

Partnerships are the clear choice for transforming the A gap emerges in strategic alignment operating model 87% said they will partner for new operating capabilities 7 with dedicated M&A teams believe their deal identiﬁcation objectives are 64% who said they would use M&A aligned to corporate strategy

Yet, 0 believe they are 76% will partner to gain access to new technology less aligned when it comes infrastructure to evaluating potential risks associated with integrating/separating the target’s operating model 29% who said they would use M&A Better at home than abroad

Corporate venture capital (CVC) fuels the engine 2 ranked their capabilities to execute domestic transactions as high of insurers are either active or setting 2 up a corporate venture capability While 77 ranked their capabilities to execute cross-border acquisitions as moderate to low of those with VC activities have more 2 than US$1b in allocated funding 2 ranked their capabilities to execute cross-border divestitures as Source: KPMG International, 2017 moderate to low

30 2017 M&A Predictor

© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. A strategy-aligned M&A focus will bring greater clarity on which markets, geographies, products and channels insurers wish to Transforming business and operating models ‘play in’ or ‘exit out of’; and the relevant operating processes, #1 motivator for deals technology infrastructure, talent and culture they will need in order to win and transform their operating model. Startups with powerful software tools and innovative 33% 40% technologies are increasingly seen as attractive targets, as intend to intend to enter evidenced by recent high multiples and valuations of such undertake M&A into partnerships technology enabled platform based business models. In this to redefine their and alliances market, insurers will need to be equipped with holistic data and business and analytics-enabled deal evaluation capabilities. Particularly in the operating models areas of due diligence, integration and separation activities to fully understand how they can extract maximum value, and how the target’s operating capabilities complement or supplement their own.

As insurers formulate their M&A strategies for the year ahead, we believe the following trends will shape deal activity:

— Cross-border activity will increase as insurers worldwide seek to diversify their geographic risks and earnings profile.With stagnation in global economic growth and changing geo-political risks across the mature and emerging markets, insurers will look beyond their domestic borders to buy or sell assets abroad.

— Portfolio rationalization and strategic repositioning of businesses by larger insurers is expected to drive global M&A activity. Divestiture of non-core business segments in strategically non-core geographies is expected to be a key driver for increased deal activity.

— Greater alignment of corporate strategy and M&A objectives will provide an edge to buyers as competition for deals rises. Creating a robust, strategy-aligned M&A plan of action would provide rationale for pursuing strategic- fit targets with higher deal premiums. This will result in better deal outcomes over the long-term, versus a reactive approach to pursuing any or all deal opportunities that present themselves.

— The hunt for innovation will increasingly shape insurers’ rationale for doing deals. Companies with a strong digital model and startups with advanced technology will attract a multitude of willing suitors as legacy companies seek to transform their business models through acquisitions.

Survey methodology In Q4 2016, KPMG commissioned a survey of 200 global insurance executives to learn about their perspectives and outlook for M&A, corporate strategy and innovation over the coming 12 months. Survey respondents were divided regionally among firms in the Americas (33%), Asia-Pacific (33%), and Europe, Middle East + Africa (33%) and by segments: Life (25%), Non-Life (25%), Reinsurance (25%), and Other (25%), consisting of Insurance Brokers and Services. Companies needed to have a minimum of US$1.5b in annual revenue to qualify for participation.

2017 M&A Predictor 31

Nicola Longfield Global Consumer Markets Deal Advisory Lead, KPMG in the UK

The consumer sector continues to convergence is ongoing as consumer Some market observers are predicting be a dynamic and rapidly changing businesses are thinking more ‘an avalanche’ of M&A activity in the area both for businesses and their holistically and looking to extend their consumer markets sector. There is customers. Businesses are intensely offerings and services into new areas no doubt that among many consumer focused today on identifying and such as nutrition, well-being and so on. businesses, M&A activity today is responding to the evolving needs, almost replacing the need for an From a technology perspective, demands and preferences of innovation or R&D department and the consumer businesses will remain customers in the digital age. This complex, costly process of establishing sharply focused on digital technology includes exploring and developing new a new brand in a new market. M&A to differentiate themselves in the ways to connect and interact with to acquire brands and businesses at evolving marketplace, whether that consumers, as well as deciding where the local level is viewed as a faster, means using today’s digital technology, to invest on innovation that will drive more-efficient approach to evolving tools and channels to better future success in retaining current and growing the business and we can communicate with customers, to customers and attracting new ones as expect more organizations to pursue improve overall service and satisfaction the competition grows. this strategy amid changing markets. and to enhance distribution methods. A huge amount of convergence is For major players operating large global currently taking place across the brands, the key challenges will include consumer markets sector and this how best to thoroughly identify, trend is expected to continue. The respond to and satisfy the needs of major global players are certainly local consumers. M&A strategies can examining their product portfolios help global businesses fill gaps at the and considering how to expand their local level through the acquisition of offerings beyond pure consumer smaller, fast-growing local brands products. For example, significant and businesses.

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Mark Andrews Partner, Head of Oil & Gas, KPMG in the UK

During 2016, deal activity in the that would otherwise have been on structures to satisfy the needs of both oil and gas sector continued the the lookout for inorganic growth, buyers and sellers, whether those take downward trend that began back in opted instead to focus on ensuring the the shape of price ratchet earn outs, 2011, with the number of announced/ sustainability of their own operations.” the swapping of assets or deals to put completed deals dropping to the assets in the hands of owners who Andrews also identified that there was lowest point in a decade, due in large may be better-suited to operate them.” a slight uptick in deals in at least one part to the depressed oil prices. In subsector in 2016 – oilfield services Overall, the sector will continue to 2016, exploration rates were down – with an increasing number of offer plenty of M&A opportunities in and many companies were finding it companies completing mergers aimed 2017 and beyond, however it is unlikely more challenging to access capital. at unlocking synergistic benefits. that the exceptional level of deal In addition, many of the sector’s big activity seen in the first quarter will players appeared to be focused on Looking ahead, Andrews comments last, as much of the capital available managing their own businesses rather “The first quarter of 2017 has been may have been committed to the deals than seeking out M&A opportunities. strong, with a number of substantial already announced. However, the sector is seeing a deals being announced in the sector. marked improvement in 2017. This is due to a relative stabilization of the oil price, compared to 2016, “For 2017, we are expecting a more creating a closer alignment of pricing positive M&A environment in the between buyers and sellers and more oil-and-gas sector, following the low financing made available to the sector.” deal volume seen in 2016,” says Mark Andrews, Partner and Head of Oil & “Over the next 12 months, we’re going Gas with KPMG in the UK. “In 2016 to see the continued development of we saw the low oil prices lead to the consolidation plays to gain efficiencies creation of a valuation gap between and create logistical benefits,” says would-be buyers and sellers. As a Andrews. “We also expect to see a result of this gap, many of the players rise in the number of innovative deal

34 2017 M&A Predictor

© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. © 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. M&A Tax Optimism for 2017 activity is tempered by concerns over the impact of BEPS and increased deal scrutiny – a global view from a tax perspective

Arco Verhulst Devon Bodoh Angus Wilson Global Head Global Head Asia Pacific of Deal of Complex Leader for Deal Advisory, M&A Transactions Advisory, M&A Tax, KPMG Group, KPMG Tax, KPMG in International International Australia

With macroeconomic indicators Profit Shifting (BEPS). Companies legislation along with greater pointing in the right direction following with cross-border transactions and harmonization. sustained global economic uncertainty, structures are facing a period of It’s already evident that the and initial fears over Brexit subsiding, uncertainty as governments must first international campaign to combat tax there’s optimism that global M&A determine how the guidance affects base erosion and profit shifting (BEPS) activity will continue trending upward current rules, then work to enact — both as part of the OECD project in 2017. domestic tax changes — a process and through countries’ unilateral moves that could take years. While these At the same time, however, a cloud of — is altering the tax environment developments unfold, some potential uncertainty looms amid intensifying for cross-border M&A in significant buyers may avoid transactions scrutiny of M&A transactions from ways regarding country-by-country involving sophisticated international tax tax authorities, the potential for major reporting, focus on substance and planning structures. tax reforms globally, particularly in the interest deductibility: US, and uncertain political agendas on In addition, the EU drafted the 2016 — Country-by-country reporting the global front. To what extent such Anti-Tax Avoidance Directive (ATAD) will make things more transparent factors will have an impact on the for adoption and future implementation for tax authorities in terms of how M&A market – and when – is the big by EU member states. The ATAD multinationals are operating and where question for 2017. package of measures, which aims revenue, profits and tax payments are to ensure consistent and appropriate Perhaps the biggest tax development coming from. And while the OECD implementation of the OECD’s BEPS affecting cross-border M&A globally has not proposed that the reports be recommendations by EU member involves the OECD’s action plan made available for public scrutiny, the states, will result in more-stringent to combat tax Base Erosion and EU is consulting on this possibility as

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© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. part of its tax transparency package. (FRR) to limit tax relief of net (including uncertainty over multiple factors, As a result, buyers could gain access third-party) interest of 10-30 percent of including legislative and regulatory to more-detailed information about net earnings before interest, dividends, changes, the introduction of BEPS- potential targets for due diligence taxes and amortization (most countries related legislation, Brexit and the US purposes, and sellers should be expect 20–30 percent), which will presidential election, momentum grew mindful of the reputational implications affect international investors and by the end of 2016 and expectations of this increased transparency. especially highly leveraged groups. are high for 2017.

— Focus on substance: One major While optimism prevails for the US point of concern around BEPS is how Business as usual in Europe market, however, uncertainty over tax authorities are increasingly looking – for now the changing legislative, regulatory, for sufficient business substance economic and political environments in offshore business structures, Meanwhile, BEPS-related concerns cannot be dismissed, particularly the especially those involving low- or are considered critical for tax due OECD’s BEPS initiative. no-tax jurisdictions, and they are diligence reviews. While companies From a US perspective, while the denying preferential rates for dividend will remain focused on discovering the US Treasury and IRS are responsive and interest withholdings where historical risk profile of any company in issuing guidance, it is too early to insufficient substance exists. When they are acquiring, changes regarding speculate on the impact of the Trump structuring an acquisition, substance in implementation of BEPS and increased administration’s agenda and proposed holding companies will require much transparency will make companies changes. Tax reform could be enacted more attention and, where an acquirer far more concerned about the future in the US, although the extent of the or acquired entity lacks sufficient sustainability of a target company’s tax reform is still unclear. substance in certain jurisdictions, profile. For example, if a target group it may affect their ability to access has a relatively low effective tax rate, Currently, rules that were issued treaty benefits. acquirers today will be particularly over the past year remain in effect, concerned about how sustainable including rules regarding earnings — Interest deductibility: ATAD’s that lower tax rate will be and many stripping, inversions, cross-border “interest deduction limitation” dictates will conduct modelling around various partnership transfers between related that, regardless of domestic interest sustainability factors. Tax due diligence parties, and the transfer of intellectual limitation in place among individual in this regard will need to be much property from the US to a foreign countries, minimum uniform measures more forward-looking. jurisdiction. Undoubtedly, these for EU states will be applied to rules will need to be considered in interest deduction and the limiting of Overall, however, even as the world future transactions. excessive interest deduction. This will around them is poised for change, have an impact on M&A markets, in it is still “business as usual” for the In Latin America, we see a move particular the net cost of funding for moment among companies and private towards greater transparency, acquirers. The denial of deductions for equity funds in Europe. For as long substance, thin capitalization, and interest has emerged as a common as legislation remains unchanged to other BEPS-influenced reforms. For legislative means of eliminating the reflect BEPS, or the anti-tax avoidance example, Brazil and Argentina both tax benefits of cross-border debt directive in the EU, companies will try employ a list of disfavored jurisdictions financing structures. Germany and to benefit from existing legislation, subject to higher withholding tax rates. Denmark were among the first while also carefully considering Mexico and Chile have introduced countries to challenge tax deductions potential future ‘BEPS unwind costs.’ more stringent thin capitalization for interest paid on loans taken up rules and reporting requirements for by companies to finance their own transactions involving entities in their acquisition. Countries such as Sweden Some uncertainty in the jurisdictions, with Chile also adopting a are tightening rules for interest on Americas M&A market general anti-avoidance rule. Colombia related-party debt. The UK and US are In the US, while the 2016 transactional recently passed a comprehensive considering a proposed fixed-ratio rule market was affected by broad tax reform that includes increased

2017 M&A Predictor 37

© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. information exchanges, adoption of activity across the region, and PE and the need for post-deal documentation country-by-country reporting, anti- Infrastructure on the increase. and restructures as a result. On a avoidance rules and the reinforcement positive note, several tax treaties in the From a tax perspective for the region, of anti-tax haven legislation. region are undergoing renegotiation the most notable changes are largely and in some instances, new treaties These legislative changes highlight a the continued evolution of domestic are coming into existence. rapidly changing regulatory landscape laws dealing with M&A in China and in Latin America that demands India, plus the increased focus and Overall, it will indeed be interesting increased attention when structuring resources of the Australian Tax office. to see how 2017 shapes up as acquisitions in the region. Additionally, optimism and a ‘business as usual’ There is prevailing optimism overall the region will not only be subject to outlook prevail globally, tempered by that M&A deal volumes will continue local political uncertainty, but also to a backdrop of uncertainty over the to increase and that outlook seems the potential impact of Brexit and any potential impact of developments on well founded considering economic changes in US legislation. However, the political, legislative, regulatory and factors. The level of tax authority certain trends, such as continued economic fronts. activity and domestic and international low commodity prices, currency tax reform are more likely to influence devaluations, a rising middle class, and pricing and execution risk, as opposed a need for infrastructure partners in to deal flow. Certainly, BEPS-related the wake of the Odebrecht corruption concerns are significantly influencing scandal shocking the region, may deals taking place and the way they encourage investment through M&A are structured. Substance in holding for 2017. jurisdictions for CIVs is probably the most significant influence of all the Asia Pacific outlook remains BEPS reforms in the region. robust Tax due diligence will mean gaining an understanding of the state of a target’s In the Asia Pacific region meanwhile, BEPS appropriateness. Quantifying the M&A market continues to be the precise dollar value of recent BEPS robust in China (in- and out-bound), reforms is difficult and there is much to Japan, Singapore, Australia and be done concerning due diligence and India, with the tech sector sustaining

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Leif Zierz Philip Isom Global Head of Deal Advisory Global Head of M&A, Deal Partner, KPMG in Germany Advisory T: +49 69 9587 1559 Partner, KPMG in the US E: [email protected] T: +1 312 665 1911 E: [email protected] Contributors

Andrew Nicholson Danny Bosker Mark Andrews Ram Menon Global Head of Healthcare M&A, Corporate Finance Partner, Partner, Head of Oil & Gas, Global Insurance Deal KPMG in the UK KPMG in the Netherlands KPMG in the UK Advisory Lead, KPMG in T: +44 20 76943782 T: +31206 567767 T: +44 20 76941029 the US E: [email protected] E: [email protected] E: [email protected] T: +1 212 954 3448 E: [email protected]

Angus Wilson Devon Bodoh Mark Flenner Silvano Lenoci Asia Pacific Leader for Deal Global Head of Complex Co-head of Global Financial Corporate Finance Advisory, M&A Tax, KPMG in Transactions Group, KPMG Services M&A, Partner, Australia International KPMG in the UK KPMG in Italy T: +61 2 9335 8288 T: +1 202 533 5681 T: +44 20 73114226 T: +3902676431 E: [email protected] E: [email protected] E: [email protected] E: [email protected]

Arco Verhulst Henry Berling Nicola Longfield Stuart Robertson Global Head of Deal Advisory, Managing Director and Head of Global Consumer Markets Global Financial M&A Tax, KPMG International US Energy Investment Banking Deal Advisory Lead, KPMG in Services Deal Advisory T: +318890 92564 for KPMG Corporate Finance, the UK Lead, KPMG in E: [email protected] KPMG in the US T: +44 20 73114383 Switzerland T: +1 804 780 1905 E: [email protected] T: +41 58 249 53 94 E: [email protected] E: [email protected]

Christian Specht James Murray Deal Advisory Partner, KPMG in Global Head of Consumer Germany M&A, T: +49 69 9587-2240 KPMG in the UK E: [email protected] T: +44 20 76945290 E: [email protected]

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