HALF-YEAR EDITION A MERGERMARKET REPORT ON GLOBAL M&A ACTIVITY MONTHLY M&A INSIDER JANUARY 2015 INSIDE: GLOBAL OVERVIEW LATIN AMERICA NORTH AMERICA ASIA-PACIFIC EUROPE MIDDLE EAST & AFRICA ABOUT MERRILL CORPORATION & MERRILL DATASITE MERRILL CORPORATION CONTACTS Monthly M&A Insider | October GLOBAL OVERVIEW The buzzword for 2014 – revival – was played out throughout the entire year and ended with a bang. M&A not only revisited pre-crisis levels, but actually surpassed previous heights in terms of the total number of global transactions. In 2014, there were 16,588 deals worth roughly US$3.2tn. Before that, 2007 was the high-water mark with 16,060 transactions worth about US$3.7tn. There were many factors that propelled the M&A market to Exit fever these hyper elevated levels of dealmaking. There is, of course, the improving economy that gave CEOs the confidence to execute Private equity exits also had an unparalleled year as both the acquisitions. On top of this, companies had at their disposal, volume and value of these deals topped prior records. Last year cash piles they accumulated throughout the crisis. Interest rates there were 2,099 transactions worth US$489.6bn, surpassing remained low and cheap financing was readily available. the previous high in 2007 of 1,794 deals worth US$403bn. Large-cap deals also made a strong comeback in several Last year, private equity firms found effective exit strategies that industries including the Pharmaceutical, Medical & Biotech would allow them to pursue new growth areas. Many of the firms sector. In fact, for most of the year, the list of mega issues that were selling their portfolio companies had been holding on included high-profile pharmaceutical deals, so-called corporate to these assets since prior to the crisis, the period from 2006 to inversions. The general M&A market considered these complex 2007. These deals were also driven by many of the same factors transactions, which were motivated by companies’ desire to such as acquisitions including low interest rates and solid avoid US taxes, as one of the greatest drivers of last year’s deal corporate balance sheets. Other drivers included rising company activity. However, in the latter part of 2014, the US Treasury multiples that created for these firms selling opportunities and a released rules that made it more difficult to execute these strong IPO market that offered viable exit alternatives. transactions with the desired tax benefits and effectively put a huge damper on further tax savings-related deal activity. In looking ahead, the big question for dealmakers becomes whether the positive momentum of deal flow that characterised Despite this setback, there was no stopping the flow of large- last year’s market will continue throughout 2015. cap transactions from the sector. In fact, one of the biggest deals of the year, and the largest one of Q4 2014, was Ireland- based Actavis’ roughly US$63bn acquisition of US-based Allergan. Not only did the combination help Allergan avoid a hostile takeover by Valeant Pharmaceuticals, but it also created one of the world’s top 10 pharmaceutical companies in terms of sales revenue. Head of Research: Elias Latsis Global overview: Elizabeth Lim and Karen Sibayan Editor: Laura Resetar Latin America: Fabio Lopes and Raquel Mozzer North America: Nicole Corazza and Urna Chakraborty For advertising opportunities contact: Asia-Pacific: Chris Wong and Brandon Taylor Erik Wickman Tel: + (1) 212 686 3329 Europe: Robert Melia and Andrea Putaturo [email protected] Middle East & Africa: Karlis Zilmanis and Mona Shehab El-Dine Monthly M&A Insider | January | 01 LEAGUE TABLES TOP 20 GLOBAL FINANCIAL ADVISERS VALUE Ranking H2 2014 H2 2013 H2 2014 H2 2013 Company name Value Deal count Value Value change (US$m) (US$m) (%) 1 1 Goldman Sachs 454,740 185 345,476 31.6% 2 3 JPMorgan 370,961 145 312,368 18.8% 3 7 Citi 304,946 111 162,235 88.0% 4 4 Bank of America Merrill Lynch 297,127 101 308,995 -3.8% 5 10 Deutsche Bank 275,937 110 109,651 151.7% 6 6 Barclays 271,489 107 232,956 16.5% 7 2 Morgan Stanley 234,394 137 327,166 -28.4% 8 11 Lazard 205,641 105 81,353 153% 9 12 Credit Suisse 156,151 103 68,116 129.2% 10 18 Jefferies 104,528 70 28,889 261.8% 11 20 Centerview Partners 100,716 19 26,510 279.9% 12 13 Rothschild 100,193 128 59,974 67.1% 13 5 UBS Investment Bank 94,674 80 261,206 -63.8% 14 15 RBC Capital Markets 79,550 66 41,441 92.0% 15 71 China International Capital 53,310 26 4,895 989.1% 16 17 BNP Paribas 52,632 48 34,612 52.1% 17 26 Wells Fargo Securities 51,082 34 20,133 153.7% 18 24 Macquarie Group 42,387 50 23,574 80% 19 14 Evercore Partners 41,423 75 50,470 -17.9% 20 21 HSBC 32,720 29 25,330 29.2% Source: Mergermarket TOP 20 GLOBAL FINANCIAL ADVISERS VOLUME Ranking H2 2014 H2 2013 H2 2014 H2 2013 Company name Value Deal count Deal count Deal count (US$m) change 1 2 Goldman Sachs 454,913 186 165 21 2 1 PwC 15,354 161 191 -30 3 5 JPMorgan 370,961 145 135 10 4 3 KPMG 19,795 144 163 -19 5 4 Morgan Stanley 234,394 137 146 -9 6 12 Rothschild 100,193 128 95 33 7 7 Deloitte 10,679 125 127 -2 8 6 EY 25,553 116 132 -16 9 10 Citi 304,945 111 105 6 10 15 Deutsche Bank 275,937 110 80 30 11 11 Barclays 271,603 107 99 8 12 9 Lazard 205,545 105 111 -6 13 14 Credit Suisse 155,371 103 90 13 14 8 Bank of America Merrill Lynch 296,251 101 118 -17 15 13 UBS Investment Bank 94,674 80 93 -13 16 20 Evercore Partners 41,423 75 58 17 17 22 Houlihan Lokey 11,633 75 54 21 18 19 Jefferies 104,528 71 65 6 19 18 RBC Capital Markets 79,550 67 71 -4 20 16 M&A International 7,118 63 72 -9 Source: Mergermarket The financial adviser league tables by value and volume have been run from 01-Jul-14 to 31-Dec-14 and exclude lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being Global. GLOBAL OVERVIEW Monthly M&A Insider | January | 02 LEAGUE TABLES TOP 20 GLOBAL LEGAL ADVISERS VALUE Ranking H2 2014 H2 2013 H2 2014 H2 2013 Company name Value Deal count Value Value change (US$m) (US$m) (%) 1 11 Latham & Watkins 260,676 186 135,906 92% 2 21 Cleary Gottlieb Steen & Hamilton 258,048 62 67,586 281.8% 3 3 Wachtell, Lipton, Rosen & Katz 250,305 48 203,804 22.8% 4 15 Sullivan & Cromwell 246,535 60 99,075 149% 5 13 Skadden Arps Slate Meagher & Flom 241,825 132 106,304 127% 6 7 Davis Polk & Wardwell 217,180 69 166,723 30.3% 7 2 Weil Gotshal & Manges 202,462 120 207,543 -2% 8 18 White & Case 200,188 141 70,640 183% 9 5 Jones Day 161,765 164 180,567 -10.4% 10 16 Cravath, Swaine & Moore 161,460 41 77,183 109% 11 31 Baker Botts 141,496 37 36,350 289.3% 12 1 Simpson Thacher & Bartlett 124,916 73 226,279 -44.8% 13 20 Clifford Chance 122,939 144 67,671 81.7% 14 9 Slaughter and May 122,247 39 162,956 -25.0% 15 14 Freshfields Bruckhaus Deringer 122,025 118 104,824 16.4% 16 22 Linklaters 120,567 140 66,071 82.5% 17 19 Allen & Overy 118,024 112 69,953 68.7% 18 34 Herbert Smith Freehills 113,663 93 30,025 278.6% 19 52 Richards Layton & Finger 111,756 15 19,820 463.9% 20 38 Fried Frank Harris Shriver & Jacobson 110,213 38 26,657 313.4% Source: Mergermarket TOP 20 GLOBAL LEGAL ADVISERS VOLUME Ranking H2 2014 H2 2013 H2 2014 H2 2013 Company name Value Deal count Deal count Deal count (US$m) change 1 1 DLA Piper 21,408 229 224 5 2 2 Latham & Watkins 260,676 186 193 -7 3 5 Jones Day 161,765 164 129 35 4 3 Kirkland & Ellis 102,287 153 185 -32 5 10 Clifford Chance 122,939 144 112 32 6 9 White & Case 200,188 141 118 23 7 8 Linklaters 120,567 140 119 21 8 4 Baker & McKenzie 34,889 137 151 -14 9 14 Skadden Arps Slate Meagher & Flom 241,825 132 103 29 10 13 Weil Gotshal & Manges 202,462 120 106 14 11 6 Freshfields Bruckhaus Deringer 122,025 118 128 -10 12 7 Allen & Overy 118,024 112 122 -10 13 11 Norton Rose Fulbright 36,221 109 112 -3 14 19 O'Melveny & Myers 53,706 104 72 32 15 20 Herbert Smith Freehills 113,663 93 72 21 16 15 CMS 5,858 91 102 -11 17 12 King & Wood Mallesons 26,167 84 107 -23 18 17 Hogan Lovells International 20,889 82 75 7 19 54 Paul Weiss Rifkind Wharton & Garrison 93,086 81 34 47 20 16 Simpson Thacher & Bartlett 124,916 73 99 -26 Source: Mergermarket The legal adviser league tables by value and volume have been run from 01-Jul-14 to 31-Dec-14 and include lapsed and withdrawn deals.