A MERGERMARKET REPORT ON GLOBAL M&A ACTIVITY MONTHLY M&A INSIDER JANUARY 2016 CONTENTS 03 GLOBAL OVERVIEW 12 NORTH AMERICA 20 C&S AMERICA 28 EUROPE 36 MIDDLE EAST & AFRICA 44 ASIA-PACIFIC (excluding Japan) 52 JAPAN 60 LEAGUE TABLES 61 ABOUT MERRILL CORPORATION & MERRILL DATASITE 63 MERRILL CORPORATION CONTACTS GLOBAL OVERVIEW QUARTERLY EDITION GLOBAL OVERVIEW 2015 has been an extraordinary year for M&A. With 16,837 transactions worth US$4.3tn announced Key Stats globally, total value rose 30.5% from last year, breaking 2014’s previous record of US$3.3tn, despite a drop in volume by 560 transactions from 17,397. High valuations also led 2015 to becoming the year of mega-deals, as well as broken records in several sectors and within the advisory space. 16,837 deals valued at US$4.3tn, up 30.5% by value with 560 fewer deals compared to 17,397 deals worth US$3.3tn in 2014 The year’s top deal was US-based Pfizer’s by 372 deals from 1,703. Falling commodities has advised on more than US$1.5tn in announcement that it would acquire Ireland- prices in 2015 made for attractive price tags, transactions. Skadden Arps Slate Meagher Top sector based Allergan for a staggering US$183.7bn particularly on energy targets; by the end of & Flom, the top legal advisor for 2015 and Energy, Mining & Utilities – making it the largest pharmaceutical the year, the price of oil had settled on a 12- the first to cross the trillion-dollar advisory saw 1,331 deals worth transaction and second-largest overall in year low of just over US$37 a barrel. threshold, advised on 294 transactions, US$637.7bn, down 5.3% M&A history. It is also the largest de facto tax 39 more than in 2014, and worth a total of by value compared to 1,703 inversion deal on record. Though expected to High valuations in 2015 also resulted in US$1.1tn, an 82.8% rise compared to the deals worth US$673.7bn complete by Q4 2016, the deal could go the several deals breaking value records within previous year. in 2014 way of US-based AbbVie’s US$54.4bn bid for their sectors: in Consumer, Anheuser-Busch Ireland-based Shire in 2014, which lapsed InBev’s US$79.6bn bid for SABMiller; in 2015 turned out to be not only a year known after three months due to changes in tax Industrials & Chemicals, E. I. du Pont de for mega-deals, but also for growing Top Financial Adviser regulations by the US Treasury Department. Nemours’ US$77bn bid for Dow Chemical; political and economic uncertainty; lingering Goldman Sachs ranked in Business Services, Dell’s US$63.3bn questions over issues including the euro’s first with 349 deals worth Broken records bid for EMC; and, in Technology, US-based future and the upcoming US presidential US$1.7tn compared The Pfizer/Allergan deal accounted for Hewlett Packard’s US$33.8bn spinoff of its election could impact M&A activity in 2016. to 376 deals worth 32% of Pharma, Medical & Biotech’s Enterprise business. Additionally, all top 10 Despite this, post-recession growth in North US$928.5bn in 2014 (PMB) activity, helping it to become the deals for 2015 qualify as megadeals, defined America, and particularly in the US, has year’s second-best performing sector with to be worth US$10+bn. driven a significant amount of M&A activity 1,366 transactions worth US$547.6bn and globally, with the year ending with strong job Top Legal Adviser accounting for 13.4% of market share, All-time advisory highs numbers, increased corporate confidence, Skadden Arps Slate rising in both value and volume from 2014. The advisory space also saw records broken. and the US’s first interest rate increase from Meagher & Flom ranked Energy, Mining & Utilities (EMU), however, The number one financial advisor, Goldman near-zero in seven years. It remains to be first with 298 deals worth was the leading sector, capturing 14.9% of Sachs, advised on 349 transactions and seen whether this year’s activity was merely US$1.1tn, compared market share with 1,331 transactions worth reached a peak value of US$1.7tn, a 78.7% a temporary frenzy, or the start of a new cycle to 255 deals worth US$637.7bn, despite value dropping 5.3% rise from 2014 despite advising on 27 fewer of growth. US$612.1bn in 2014 compared to US$673.7bn in 2014 and volume deals. This is the first time that any firm GLOBAL 4 NORTH C&S MIDDLE EAST ASIA- LEAGUE ABOUT CONTACT OVERVIEW EUROPE JAPAN AMERICA AMERICA & AFRICA PACIFIC TABLES MERRILL MERRILL TREND GRAPHS GLOBAL M&A TREND GLOBAL PRIVATE EQUITY TREND 4,500 20,000 600 3,000 4,000 500 2,500 US$ 16,000 3,500 1,377.4bn 3,000 400 2,000 US$ 904.4bn 12,000 Number of deals Number of deals 2,500 US$ 1,058.8bn 300 1,500 US$ 2,000 US$ US$ US$ Value (US$bn) Value Value (US$bn) Value 478.2bn US$ 571.6bn 842.1bn 519.6bn US$ 756.4bn 8,000 712.1bn US$ US$ US$ 437.2bn 1,500 200 1,000 599.4bn 433.8bn US$ US$ US$ US$ 523.2bn 644.9bn 1,051.2bn US$ 399.3bn US$ US$ US$ 331.4bn 492.9bn US$ US$ US$ US$ 1,000 US$ 317.0bn US$ 963.1bn US$ 293.3bn 295.7bn 282.7bn 4,000 282.2bn 277.4bn 585.8bn US$ 248.7bn US$ US$ 100 500 565.7bn 432.8bn 559.2bn 500 US$ US$ US$ US$ US$ US$ 791.3bn 613.6bn 568.7bn 460.9bn 464.0bn 446.8bn 0 0 0 0 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Q1 Q2 Q3 Q4 Volume Buyout value Exit value Buyout volume Exit Volume GLOBAL 5 NORTH C&S MIDDLE EAST ASIA- LEAGUE ABOUT CONTACT OVERVIEW EUROPE JAPAN AMERICA AMERICA & AFRICA PACIFIC TABLES MERRILL MERRILL TREND GRAPHS REGIONAL BREAKDOWN AS A PROPORTION OF GLOBAL TOTAL M&A VALUE GLOBAL M&A SECTOR BREAKDOWN 2015 Energy, Mining & Utilities Value: US$637.7bn Number of deals: 1,331 Market share: 14.9% Europe North America US$1,099.7bn US$2,079.1bn 6,224 deals 5,442 deals 25.7% Pharma, Medical & Biotech 48.6% Value: US$574.6bn Asia-Pacific Number of deals: 1,366 (excluding Japan) US$927.8bn Market share: 13.4% 3,802deals Japan 21.7% US$61.6bn 396 deals 1.4% Consumer Africa & Value: US$516.5bn Middle East Number of deals: 2,015 C&S America US$47.3bn Market share: 12.1% US$63.1bn 429 deals 540 deals 1.1% 1.5% Financial Services Value: US$496.4bn Number of deals: 1,389 Market share: 11.6% Key Industrials & Chemicals Region Value: US$474.8bn Value Value % Value Up/Down Number of deals: 3,137 (US$bn) change Volume Value market share Market share: 11.1% Cross-border $1,673.3 17.8% Domestic $2,605.4 40.2% GLOBAL 6 NORTH C&S MIDDLE EAST ASIA- LEAGUE ABOUT CONTACT OVERVIEW EUROPE JAPAN AMERICA AMERICA & AFRICA PACIFIC TABLES MERRILL MERRILL TOP DEALS TOP 10 ANNOUNCED DEALS FOR 2015 Deal value Deal value Deal value Deal value Deal value US$183.7bn US$ 120.3bn US$81.2bn US$77.8bn US$77.0bn Announced Announced Announced Announced Announced 23-Nov-15 11-Nov-15 08-Apr-15 26-May-15 11-Dec-15 Bidder company Bidder company Bidder company Bidder company Bidder company Pfizer Inc Anheuser-Busch InBev NV Royal Dutch Shell Plc Charter Communications Inc E I du Pont de Nemours and Company Target company Target company Target company Target company Target company Allergan plc SABMiller Plc BG Group Plc Time Warner Cable Inc The Dow Chemical Company Dominant sector Dominant sector Dominant sector Dominant sector Dominant sector Pharma, Medical & Biotech Consumer Energy, Mining & Utilities Telecommunications Industrials & Chemicals Sell-side Financial Adviser Sell-side Financial Advisor Sell-side Financial Advisor Sell-side Financial Adviser Sell-side Financial Advisor JPMorgan; and Morgan Stanley Credit Suisse; Goldman Sachs; JPMorgan Goldman Sachs; Robey Warshaw; Allen & Company; Centerview Partners; Citi; Lazard; and Morgan Stanley Sell-side Legal Adviser Cazenove; Morgan Stanley; Perella Weinberg and Rothschild and Morgan Stanley Sell-side Legal Advisor Arthur Cox; Cleary Gottlieb Steen & Partners; and Robey Warshaw Sell-side Legal Advisor Sell-side Legal Advisor Cleary Gottlieb Steen & Hamilton; and Weil Hamilton; Latham & Watkins; Stikeman Sell-side Legal Advisor Freshfields Bruckhaus Deringer; King & Latham & Watkins; Paul Weiss Rifkind Gotshal & Manges (Advising FA: Simpson Elliott; and Weil Gotshal & Manges (Advising Bowman Gilfillan Africa Group; Cleary Wood Mallesons; and Mattos Filho Veiga Wharton & Garrison; and Skadden Arps Slate Thacher & Bartlett) FA: Cravath, Swaine & Moore; and Willkie Gottlieb Steen & Hamilton; Herbert Smith Filho Marrey Jr e Quiroga Advogados Meagher & Flom (Advising FA: White & Case) Buy-side Financial Advisor Farr & Gallagher) Freehills; Hogan Lovells International; Buy-side Financial Advisor Buy-side Financial Advisor Evercore Partners; and Goldman Sachs Buy-side Financial Adviser Centerview Linklaters; Loyens & Loeff; Macfarlanes; Bank of America Merrill Lynch; and Lazard Bank of America Merrill Lynch; Credit Suisse; Partners; Goldman Sachs; Guggenheim McDermott Will & Emery; Simpson Thacher Goldman Sachs; Guggenheim Partners; and Buy-side Legal Advisor & Bartlett; and Wachtell Lipton Rosen & Katz Buy-side Legal Advisor Skadden Arps Slate Meagher & Flom Partners; and Moelis & Company Allens; Cravath Swaine & Moore; De LionTree Advisors Buy-side Financial Advisor (Advising FA: Cravath Swaine & Moore; Buy-side Legal Adviser Brauw Blackstone Westbroek; Pinheiro Buy-side Legal Advisor and Debevoise & Plimpton) A&L Goodbody; Clifford Chance; Davies Bank of America Merrill Lynch; Barclays; Neto Advogados; Slaughter and May; and Kirkland & Ellis; and Wachtell Lipton Rosen Ward Phillips & Vineberg; Morgan Lewis & BNP Paribas; Deutsche Bank; Lazard; and Souza Cescon Barrieu & Flesch Advogados & Katz (Advising FA: DLA Piper; and Fried Bockius; Skadden Arps Slate Meagher & Standard Bank Group (Advising FA: Allen & Overy; and Ashurst)