An Acuris Company An Acuris report on global M&A activity Q1 2018 Monthly M&A Insider mergermarket.com Mergermarket Monthly M&A Insider Q1 2018 2 Contents An Acuris report on global M&A activity Contents Global Overview 4 US & Canada 12 Central & South America 19 Europe 26 Middle East & Africa 33 Asia-Pacific (excluding Japan) 40 Japan 47 League Tables 54 mergermarket.com Mergermarket Monthly M&A Insider Q1 2018 3 Welcome Welcome from Merrill Corporation The Monthly M&A Insider explores the global There was one slight cause for caution in the E.ON, in a further shakeup of the German M&A market with respect to the numbers, quarterly deal totals. After a years-long trend utilities market amid a push by the government movements, and trends, as well as revealing of cross-border M&A rising continuously in to decrease reliance on fossil fuels and move the top financial and legal advisors – globally value as the world economy becomes more to renewables instead. and across six regions (North America, Central integrated, cross-border value actually fell by Entering the second quarter of the year, Shelle Martin and South America, Europe, Middle East and more than 20% in Q1 2018. Increasing barriers equity prices have been in flux worldwide but Sr. Director, Africa, Asia-Pacific, and Japan). to trade, especially between China and the US, dealmaking appears to be continuing unabated. DatasiteOne have undoubtedly contributed to this decline. In many ways, the first quarter of 2018 was We’ll be tracking the movements of acquirers At the same time, a 53% rise in domestic M&A highly auspicious for global M&A. The total as they react to these shifts in the market. more than made up for the drop in cross-border M&A value of US$890.6bn was the most for deals. Eight of the top ten deals in the quarter any Q1 since Mergermarket began tracking were between companies in the same country. deals in 2001. An outburst of megadeals in Sincerely, March – there were eight transactions valued In the wake of historic tax cuts in the US, Shelle Martin at US$10bn or more in the month and 15 North America retained its status as the top Sr. Director deals over US$5bn – helped drive this total. destination for deals. Just under 50% of all M&A The top deal saw further consolidation in value in the quarter was from deals for North the US healthcare industry, with insurance American targets. Europe held onto second giant Cigna paying US$67.8bn for pharmacy place with 29% of value and Asia-Pacific benefit manager Express Scripts Holding. (excluding Japan) had nearly 17%. International acquirers are paying ever greater attention to The private equity industry also continued Asian targets, but the region still lags when it its torrid pace of dealmaking in Q1. Financial comes to inbound megadeals – it had none of buyers are increasingly super-sizing their the top 10 deals by value for the quarter. acquisitions in order to expand their pool of targets and put dry powder to work. In the The Energy, Mining & Utilities sector largest deal of the quarter, PE mainstay the demonstrated its enduring importance to the Carlyle Group teamed up with Singaporean economy in having the highest M&A value of sovereign wealth fund GIC Private Limited to any industry in Q1, a position it often holds on pay a stunning US$12.5bn for the specialty an annual basis as well. The utilities sub-sector chemicals business of Netherlands-based Akzo contributed the largest portion of the total in Nobel. The acquirers won the deal over fellow Q1 2018, with two deals of US$14bn or more in blue chip PE firms Apollo Global Management, value. These included the US$46.6bn takeover Bain Capital and Advent International. of German electricity provider Innogy by rival mergermarket.com Mergermarket Monthly M&A Insider Q1 2018 4 Global Overview An Acuris report on global M&A activity Global Overview mergermarket.com Mergermarket Monthly M&A Insider Q1 2018 5 Global Overview Global Overview Further information The ongoing disparity between volume and The second largest deal of the year was by with the same quarter in 2017. By contrast Get in touch or read more value in global M&A was once again on display contrast European and in the Energy, Mining Business Services (US$128.1bn), Industrials in Q1 2018. The first three months of the year & Utilities (EMU) sector – E.on’s proposed & Chemicals (US$122.5bn) and Technology saw US$890.6bn in deals come to market. US$46.6bn acquisition of green-energy (US$80.4bn) all grew year-on-year (YoY) Tom Davidson That figure is not only up 18% on Q1 2017, but business Innogy. The acquisition, announced by value. is the strongest start to the year since 2001 on March 12, represents the latest turmoil in Another interesting trend for these three when Mergermarket records begin. Deal count, the German utilities sector as changes in the Aram Hovsepian months was the dramatic growth of domestic however, suffered a nearly equal year-on-year regulatory environment to favor renewable deals. After a difficult 2017, domestic trades decline as the first three months of the year energy instead of nuclear and fossil fuels globally went up 53% YoY, even as cross- saw just 3,774 deals. That figure is down 19% on continue to reverberate. border deals declined 21.2%. In North Q1 2017, and is the weakest quarter since 2013. The third largest acquisition was also a America, the surge of domestic activity is This value/volume dynamic was true for every European deal as the eight-month battle for usually attributed to cash-rich corporations region except the Middle East and Africa in control of Spanish toll-road operator Abertis thanks to the combined effects of the Trump Q1, with North America, Europe, Asia-Pacific Infraestructuras finally ended on March 23. administration boosting company income from (excluding Japan), Central & South America, The new US$39.6bn deal will see former tax cuts while also encouraging repatriation and Japan all showing the same pattern of rival bidders ACS, Atlantia and Hochtief join of foreign capital. Strong domestic activity increases in value but decreases in volume. together to purchase Abertis through a new was also seen in China, perhaps reflecting the hold-co structure. lingering effect of the Chinese government The driving force behind the divergence was frowning on cross-border deals in 2017. a bumper batch of megadeals, especially in The rest of the top 10 deals table included March. The largest deal of the quarter was four more US domestic deals along with Despite all the talk of corporations with deep US health insurance giant Cigna’s US$67.8bn a Brazilian industrial merger in the paper pockets, the private equity market also found purchase of pharmacy benefit manager industry, the purchase of Bermudan plenty to buy. Private equity buyouts stood at Express Scripts on March 8. The deal falls into insurance company XL Group by French 699 deals worth $113.6bn, up 27% by value on a pattern of consolidation in the healthcare rival Axa and a second healthcare deal as Q1 2017, another first quarter record. Private sector (last quarter saw a very similar merger Novartis sold its minority stake in UK-based equity exits were more muted at US$79.6bn between health insurer Aetna and CVS Health) GlaxoSmithKline Consumer Healthcare. spread over 470 deals, down 10% YoY. as a response to rising healthcare costs. The EMU remained the top sector for the first Cigna/Express Scripts deal also comes hot on quarter with 296 deals valued at US$169.3bn, the heels of Amazon’s proposed entry into the although that represented a 5.3% fall compared healthcare market. mergermarket.com Mergermarket Monthly M&A Insider Q1 2018 6 Global Overview Top Financial Advisor 3,774 deals Goldman Sachs & Co valued at US$890.6bn, up 18% by value ranked first with 76 deals worth US$268.3bn, with 898 fewer deals compared to 4,672 up 27.7% in value with 5 fewer deals compared deals worth US$754.7bn in Q1 2017. to 81 deals worth US$210.1bn in Q1 2017. Top Legal Advisor Top Sector Skadden Arps Slate Energy, Mining Meagher & Flom & Utilities ranked first with 47 deals worth US$193.7bn, up 24.2% in value with 11 fewer deals compared saw 296 deals valued at US$169.3bn, down to 58 deals worth US$156bn in Q1 2017. 5.3% by value with 98 fewer deals compared to 394 deals worth US$178.3bn in Q1 2017. Mergermarket.commergermarket.com Mergermarket Monthly M&A Insider Q1 2018 7 Global Overview Global M&A trend Global private equity trend 4,000 20,000 600 3,500 18,000 3,500 3,000 US$ 500 1,200 16,000 3,000 US$ 14,000 827.2 US$ US$ 2,500 1,029.5 900.2 400 2,500 12,000 Number of deals of Number Number of deals of Number US$ 2,000 873.1 2,000 US$ 10,000 US$ US$ 300 571.6 861.2 US$ 726.8 US$ US$ US$ Value (US$bn) Value Value (US$bn) Value 870.4 536.3 536.9 US$ 521.7 1,500 8,000 490.7 1,500 US$ 453.3 US$ US$ US$ US$ 416.3 658 US$ 200 407 401.6 1,040.3 6,000 US$ 798 1,000 1,000 US$ US$ US$ 964.9 US$ 739.2 298.8 295.2 4,000 US$ 561.7 100 500 500 US$ 2,000 US$ US$ 890.6 US$ US$ 762.3 US$ 754.7 113.6 US$ US$ 568.5 626.4 79.6 446.7 0 0 0 0 2013 2014 2015 2016 2017 YTD 2018 2013 2014 2015 2016 2017 YTD 2018 Q1 value Q3 value Volume Buyout value Buyout volume Q2 value Q4 value Exit value Exit volume mergermarket.com Mergermarket Monthly M&A Insider Q1 2018 8 Global Overview Regional Trends Energy, Mining & Utilities Value: US$169.3bn Number of deals: 296 Market share: 19% Business Services C&S America Asia-Pacific Value: US$128.1bn North America US$26.3bn Number of deals: 508 (excluding Japan) Market share: 14.4% US$435bn