Volume 4 • Issue 8 M&A 2017 – the year of boom and bust? Global interview panel led by Alan Klein Sector focus • Keynote deals • Shareholder activism • 2018 outlook Europe • The Americas • Asia-Pacific • Africa © Law Business Research 2017 Publisher: Gideon Roberton Senior business development manager: Adam Sargent [email protected] Business Development Manager: Dan Brennan [email protected] Readership Development Manager: Rosie Oliver [email protected] Product marketing manager: Kieran Hansen [email protected] Welcome to GTDT: Market Intelligence. Head of production: Adam Myers This is the fourth annual issue focusing on global M&A markets. Editorial coordinator: Gracie Ford Subeditor: Tessa Brummitt Getting the Deal Through invites leading practitioners to reflect on evolving legal and Designer/Production editor: Harry Turner regulatory landscapes. Through engaging and analytical interviews, featuring a uniform set of questions to aid in jurisdictional comparison, Market Intelligence offers readers a Cover: iStock.com/onurdongel highly accessible take on the crucial issues of the day and an opportunity to discover more about the people behind the most interesting cases and deals. No photocopying. CLA and other agency licensing systems do not apply. For an Market Intelligence is available in print and online at authorised copy contact Adam Sargent, www.gettingthedealthrough.com/intelligence tel: +44 20 3780 4104 This publication is intended to provide Getting the Deal Through general information on law and policy. The London information and opinions which it contains November 2017 are not intended to provide legal advice, and should not be treated as a substitute for specific advice concerning particular situations (where appropriate, from local advisers). Law Business Research Published by In this issue Law Business Research Ltd 87 Lancaster Road Global Trends ........................................................................................2 London, W11 1QQ, UK Tel: +44 20 3780 4104 Africa – A Regional Overview ����������������������������������������������������������������4 Fax: +44 20 7229 6910 Argentina ��������������������������������������������������������������������������������������������10 ©2017 Law Business Research Ltd Canada ...............................................................................................17 ISSN: 2056-9025 France �������������������������������������������������������������������������������������������������23 Germany ���������������������������������������������������������������������������������������������31 Japan ..................................................................................................38 Malta ��������������������������������������������������������������������������������������������������45 Strategic Research Sponsor of the ABA Section of International Law Netherlands ........................................................................................50 Norway ..............................................................................................54 Peru ....................................................................................................62 Russia .................................................................................................66 Switzerland .........................................................................................73 Printed and distributed by Turkey .................................................................................................78 Encompass Print Solutions Ukraine ...............................................................................................84 Tel: 0844 2480 112 United Kingdom ...................................................................................89 United States ���������������������������������������������������������������������������������������95 © Law Business Research 2017 Alan M Klein is a partner at Simpson Thacher and Bartlett LLP, and a member of the firm’s corporate department with extensive experience in mergers and acquisitions, shareholder activism and corporate governance matters. He assisted Microsoft in its US$24.6 billion acquisition of LinkedIn, ChemChina in its US$46.6 billion acquisition of Syngenta, Tyco in its US$27.7 billion merger with Johnson Controls, Inc and The ADT Corporation in its US$12.3 billion sale to Apollo Group Management. In addition to the LinkedIn transaction, he represented Microsoft on its US$7.2 billion acquisition of Nokia’s phone business, its US$8.5 billion acquisition of Skype and its investment in Barnes & Noble’s Nook business. Other clients have included Tyco International, Best Buy, Chinalco, Gas Natural SA, Portugal Telecom, Gerdau Ameristeel, Bavaria SA and Owens-Illinois. In 2012, The American Lawyer named him a ‘Dealmaker of the Year’. He is a frequent commentator on M&A issues. Klein is co-head of the firm’s mergers and acquisitions practice. Global Trends ALAN M KLEIN OF SIMPSON THACHER & BARTLETT LLP he first nine months of 2017 have been and infrastructure have boomed while others, such a boon to some areas of mergers and as technology, have had steep declines in activity acquisitions activity and have been from 2016. Financial sponsors had their most verging on a bust for other areas. active nine months since 2007, both in total deal TDifferent analysts apply a variety of different value, with over US$940 billion of transactions methods of measurement, but overall they agree entered into, and comprising over 20 per cent that global deal volume for the first three quarters of the total deal market year to date, the highest of 2017 was essentially flat to slightly down from proportion of the global M&A market since 2007. the same period in 2016, with approximately Several areas that slipped dramatically in US$2.3 trillion of activity through the end of 2017 from record high levels of activity in 2016 September. However, the 2017 third quarter had were outbound activity from China, activity in a marked decline in global activity from the 2016 the materials sector and activity in the technology third quarter and a decline from the second quarter sector. For example, in the third quarter of 2017, of 2017. By some measures, the third quarter of there were only 29 acquisitions by Chinese 2017 was the slowest in four years, by both deal companies into the US and Europe for a total of value and by the number of deals. In looking at US$15 billion, which was the lowest number of the year overall to date, a slower first quarter and deals and the lowest dollar value since the first a robust second quarter, together with a notably quarter of 2015. Total Chinese outbound M&A slow third quarter globally, only tell part of the activity globally for the first nine months of 2017 story, however. The total number of worldwide was US$121 billion, a decline of 27 per cent from deals this year to date has remained flat, pushing the same period last year. Several factors account up the average deal value. At the same time, there for the steep decline in Chinese-led activity. First, has been a significant decline in transactions with the Chinese government has clearly discouraged a value of over US$10 billion compared to 2016 Chinese companies from making certain kinds and 2015. Some sectors such as energy, utilities of acquisitions outside of China, particularly 2 // GLOBAL TRENDS www.gettingthedealthrough.com © Law Business Research 2017 acquisitions that may appear to be outside of the core business of a company. Secondly, there has been heightened regulatory reviews of acquisitions “Activity in the eurozone picked by Chinese companies in a number of jurisdictions. A recent example of this has been the blocking up markedly in the first three by the US government of the attempted US$1.2 billion purchase of the Lattice Semiconductor quarters of 2017” Corporation by a Chinese buyer. This heightened degree of regulatory oversight may be impeding or discouraging potential Chinese buyers, or and boards of large US corporations, may have dissuading potential sellers from entering into been hesitant to pursue transactions at a time agreements with prospective Chinese buyers. when US government policies in areas such as The decline in activity in the materials and taxes, antitrust enforcement and healthcare have technology sectors in the first two-thirds of 2017 remained uncertain and unsettled. was striking. In the first three quarters of 2016, By contrast, activity in the eurozone picked the technology industry led global M&A activity, up markedly in the first three quarters of 2017 in representing approximately 14 per cent of total contrast to 2016. European deals accounted for deals, the first time that the techonology industry over 25 per cent of global deal volume, an increase was the leading sector of activity. The materials of over a third from the prior year. The biggest sector was not far behind, with 13 per cent of global jump in activity levels took place in the first quarter, activity. Deals in the materials sector were down and there was some cooling off that occurred over for the first nine months of 2017 by 46 per cent the next two quarters. But even so, activity levels from the same period in 2016, and deal activity in in Europe in each quarter to date in 2017 remained the technology sector was down by 28 per cent for ahead of the prior year. In contrast with the US, the same period from that period in