Global and regional M&A: YTD 2015 Including league tables of financial advisors Data correct as of 7th December YTD 2015 refers to 01-Jan to 06-Dec Global Europe US Asia-Pacific League tables Criteria 2016 Insights Announced activity in 2015 Global M&A Europe US Asia-Pacific (excl. Japan) $3.91tn, +19.5% vs. 2014 $1.06bn, -4.2% vs. 2014 $1.82tn, +29.8% vs. 2014 $787.1bn, +22.0% vs. 2014 Energy, $588.1bn 12.7% Inbound $495.2bn 49.3% Inbound $425.0bn 12.6% Inbound $85.5bn 2.5% Mining Outbound $232.9bn 37.3% Outbound $414.0bn 35.0% Outbound $146.2bn 59.7% & Utilities Pharma, $213.7bn 83.2% Pharma, $288.9bn 25.3% Energy, $113.1bn 19.7% Medical & Medical & Mining & Biotech Biotech Utilities Mergermarket insights into 2016 "After digesting 2015, "The debt market is highly "Key drivers of M&A in uncertainty could liquid...it’s a borrowers 2015 will persist into encourage dealmakers to market" 2016... bolder moves to act early on in 2016" enhance long-term value" Beranger Guille, Patrick Sarch, Barry Perkins, EMEA Editor, M&A partner, TAS Lead Researcher , Mergermarket Clifford Chance Ernst & Young " Industry-defining "It’s all about tax – the "There are no warning transactions were a major deficiencies of the US signals that M&A will feature of 2015 M&A. tax system have a ripple divert from the high speed Competitors need to effect across the M&A track it has taken during respond in 2016" landscape" this year" Alex Tarrant, Dan Niedle, Kirsty Wilson, Assistant Editor, Tax partner, Global Research Editor, Dealreporter Clifford Chance Mergermarket *Heat chart based on Mergermarket intelligence on companies potentially for sale. ** Quotes should not be taken as a prediction. Global and regional M&A: YTD 2015 2 www.mergermarket.com Global u 2015 has been a record year for global M&A with several regional records being broken, such as US and Asia posting their highest values, and some of the largest deal announcements. The total value of M&A reached a record level in late-November 2015, after the announcement of the world’s third largest M&A transaction in history. Pfizer’s US$ 183.7bn purchase of Allergan boosted total M&A values to US$ 3.90tn so far this year, 6.7% higher than the previous 2007 peak and 19.5% above 2014. u Despite a rise in interest rates on the horizon, the war on terror, Gr/Brexit and US elections next year, the steam for dealmakers billowed particularly hard during Q2-Q4. For the third quarter in a row, Q4 2015 has already hit a value above US$ 1tn with transactions amounting to US$1.02tn so far. The surge of activating during the last three quarters is the first of its kind, with both 2006 and 2007 only posting one quarter above US$ 1tn. u With cash to spend, banks continuing to lend, high board confidence and shareholders pushing for more M&A drove a huge increase in price tags above US$ 50bn and even US$ 100bn. There have only been five transactions above US$ 100bn ever announced, two of which were announced this year (Pfizer/Allergan, Ab InBev/SABMiller). There were a total of nine transactions above US$ 50bn that amounted to US$ 737.7bn, double 2014’s value for such bulge-bracket deals. As a result, these US$ 50bn announcements contribute a record share toward global M&A at 18.9%, up from just 7.9% during the peak for in 2007. u This year has seen high profile transformational deals across a variety of sectors. Six industries have reached an all-time record value so far this year, driven by global as well as sector specific influences. The sectors were Pharma, Medical & Biotech (US$ 558.0bn), Consumer (US$ 473.6bn), Technology (US$ 391.6bn), Business Services (US$ 215.5bn), Real Estate (US$ 213.8bn) and Defence (US$ 14.8bn). Energy, Mining & Utilities took the highest market share by value at 15% but with a 12.7% lower deal value compared to the whole of 2014. Quarterly M&A activity Q1 Q2 Q3 Q4 YTD 2015: $3.91tn Value of deals (US$bn) 2007 800.6 1,278.5 852.0 734.4 Total 3,665.5 YTD 2015 Highest annual value vs. 6.7% on Mergermarket record 2008 593.3 678.1 684.7 458.8 Total 2,414.8 2007 2009 421.0 396.3 327.5 569.6 Total 1,714.4 YTD 2015 Posting Q2-Q4 above US$ 1tn vs. 19.5% 2014 2010 460.9 432.8 492.9 711.2 Total 2,097.8 Q4 2015 2.7% Q4 2015 is the third 2011 613.8 585.8 599.3 478.2 Total 2,277.0 vs. quarter in a row to post Q3 2015 +$1tn-worth of deals 2012 464.0 565.6 523.2 756.4 Total 2,309.2 Sector EBITDA multiples 2013 446.8 559.3 644.8 571.6 Total 2,222.5 568.6 962.9 841.8 899.3 Total 3,272.6 2014 Technology Second highest multiple 24.6x paid on record. 2015 789.3 1,045.7 1,051.3 1,023.4 Total 3,909.7 Up from 20.3x in 2014 Pharma, Highest EBITDA multiple 18.6x since 2008. Sector breakdown YTD 2015 vs 2014 Medical & Up from 16.1x in 2014 Biotech $673.6bn 20.6% Energy, Mining & Utilities $588.1bn 15.0% Up from 11.4x in 2014 Consumer 12.7x $380.3bn 11.6% Pharma, Medical & Biotech $558bn 14.3% 10.2% Consumer $333.8bn $473.6bn 12.1% Misc $242.1bn 7.4% Financial Services $446.7bn 11.4% Deals +$50bn 18.9% 2015 deals contributes $224.1bn 6.8% 9 deals share of highest share on record Technology all deals $391.6bn 10.0% $737.7bn $406.7bn 12.4% vs.vs. 2014 Second highest post-crisis Industrials & Chemicals Private equity 2014 $372.3bn 9.5% annual total after 2014 buyouts: 4.5%2.7% $223.9bn 6.8% $379.1bn Telecommunications $255.7bn 6.5% vs. Private equity 2014 Drop follows zero exits $788.1bn 24.1% exits: above $10bn during Other 22.4% $823.6bn 21.1% $398.1bn 2015, vs. four in 2014 * % indicates market share Global and regional M&A: YTD 2015 3 www.mergermarket.com Global Top deals Deal Ann. Bidder Bidder Target Target Target Seller value date company country company country sector company (US$bn) Ireland 183.7 23-Nov Pfizer Inc USA Allergan plc - (Republic) United 120.3 11-Nov Anheuser-Busch InBev NV Belgium SABMiller Plc - Kingdom United 81.2 08-Apr Royal Dutch Shell Plc Netherlands BG Group Plc - Kingdom 77.8 26-May Charter Communications Inc USA Time Warner Cable Inc USA - 63.3 12-Oct Dell Inc USA EMC Corporation USA - Sector key Pharma, Medical, Biotech Consumer Energy, Mining & Utilities Telecommunications Technology League table by value Rank Company name YTD 2015 2014 Regional ranking comparison YTD Value Value % Value Asia- Deal Count Europe US 2015 2014 (US$m) (US$m) change Pacific 1 1 Goldman Sachs 1,521.7 316 928.5 63.9% 1 1 1 2 4 JPMorgan 1,265.8 280 625.6 102.3% 2 2 2 3 3 Morgan Stanley 1,197.5 300 677.2 76.8% 3 3 4 4 2 Bank of America Merrill Lynch 923.6 201 691.7 33.5% 4 5 10 5 5 Citi 746.2 207 605.1 23.3% 15 4 5 6 9 Credit Suisse 709.3 181 426.2 66.4% 13 6 6 7 6 Barclays 593.7 160 498.3 19.1% 5 8 15 8 8 Deutsche Bank 576.1 172 431.9 33.4% 6 13 7 9 7 Lazard 558.9 186 469.2 19.1% 7 9 29 10 14 Centerview Partners 457.1 31 152.7 199.3% 11 7 19 11 10 UBS Investment Bank 417.6 128 325.2 28.4% 17 11 9 12 45 Guggenheim Partners 352.4 23 27.2 1,197.5% 8 10 185 13 35 Moelis & Company 326.5 93 46.5 602.4% 9 12 22 14 17 Evercore Partners 218.7 114 119.0 83.8% 22 14 17 15 16 RBC Capital Markets 213.3 103 128.4 66.2% 31 15 46 16 11 Rothschild 205.1 239 233.3 -12.1% 14 18 24 17 12 BNP Paribas 203.2 72 181.6 11.9% 12 22 68 18 82 Robey Warshaw 202.0 3 11.4 1,669.8% 10 142 - 19 20 HSBC 176.5 58 99.3 77.8% 19 28 3 20 53 Allen & Company 157.1 18 21.7 623.0% 38 16 162 Global and regional M&A: YTD 2015 4 www.mergermarket.com Europe u Europe has re-appeared as a major player on the global M&A scene following a strong Q4 (831 deals worth US$ 432.2bn), representing the second highest quarterly deal value on record following Q2 2007 (1,746 deals, US$ 583.1bn). Land-mark deals - such as US-based Allergan’s US$ 183.7bn acquisition of Ireland-based Pfizer and Anheuser-Busch InBev’s US$ 120.3bn acquisition of UK- based SAB Miller - have dominated deal activity this quarter. As a result, year-to-date value (US$ 1.06tn) has reached its highest since 2007 (US$ 1.52tn), up 18.2% compared to 2014. u The influx of mega-deals was not reflected in the overall deal volume however, with just 831 deals announced this quarter on track to reach the lowest level in over a decade.