A mergermArket report on globAl m&A Activity Monthly M&A InsIder … · 2011-08-17 · You can be ready for due diligence in a matter of hours with Merrill DataSite. In today’s

Monthly M&A InsIderA mergermArket report on globAl m&A Activity

AUgUSt 2011

Monthly M&A InsIdermergermarket

GlobAl overvIew 01

AmericAS: lAtin AmericA 06

north AmericA 11

ASiA-pAcific 16

eUrope 21

middle eASt & AfricA 27

About MerrIll corporAtIon 32

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CONTENTS

Monthly M&A Insider

global overview

01

While overall M&A activity slipped, the number of announced deals with valuations in excess of US$1bn remained buoyant, edging up by around 3% month on month. There were 36 such transactions carrying a combined deal value of US$132.3bn in the month. Large-cap M&A had its best showing in North America where a spate of big deals came to market led by Express Scripts’ agreed acquisition of Medco Health Solutions for US$33.4bn. The deal is the second largest by value to come to market globally in the year to date, surpassed only by AT&T’s pending acquisition of T-Mobile USA for US$39bn announced in March.

If the combination of Express Scripts and Medco Health, whose core activities are to process and make payments for insurance-covered prescription claims, is successful, it will create the largest pharmacy benefits management company in the US. However, with the prospect of such a heavily consolidated market, the deal is expected to face tough scrutiny from antitrust authorities. Clearly, the two firms will be crossing their fingers for clearance as the tie-up will be important for their future growth. The industry is in the midst of change with growing competitive pressures from smaller rivals and the forthcoming overhaul of the US healthcare system, which gives clients an expanded range of coverage options.

Elsewhere, the second largest global transaction announced in July is particularly noteworthy, not simply for its size but because it sees BHP Billiton return to the deal market after a number of failed attempts at transformational M&A in recent years with the likes of PotashCorp and Rio Tinto. The deal

in question will see the Australian resource major move to acquire Houston-based Petrohawk Energy Corporation for a consideration of US$14.8bn. This time BHP is minimising risks that shareholders will reject the offer by paying a handsome premium of some 60% over the previous month’s trading price.

Meanwhile, the summertime holidays are now upon us in the northern hemisphere. It is a time of year that always sees a lull in global dealmaking, particularly in the month of August. In 2010, for instance, the month-on-month fall in deal activity was 12.6%, a little below the mean average of 16% witnessed over 2005 to 2010. This year, however, there are signs the abatement may be more pronounced. Investor confidence is shaky. Sovereign debt worries in the eurozone and the US as well as stubbornly weak economic indicators in core economies have dampened the appetite for risk, causing capital flight toward safe-haven investments.

Nowhere has this been more evident than in global equities markets. Massive sell-offs in early August saw the world’s leading stock indices record daily declines reminiscent of the heady days of the financial crisis. Punctured investor confidence and depressed stock prices are a merciless scourge for companies eyeing public share offerings. With growing wariness among investors and shareholders at the moment, dealmakers may also put on hold any big announcements that could result in further downward pressure on their share prices.

gLoBAL ovERvIEW

Head of Research: Elias Latsis

Editor: Felicity James

For advertising opportunities contact:

Erik Wickman

Tel: + (1) 212 6863329 [email protected]

Global overview: Matthew Albert

Latin America: Urna Chakraborty

North America: Jason Cozza

Asia-Pacific: Rus Beasley

Europe: Samuel Tedjasukmana and Damien Julliard

Middle East & Africa: Yannis Papacostas and Marie-Laure Keyrouz

GLobAL ovERvIEW

THE gLoBAL M&A MARKET LoST MoMENTUM IN JULY WITH gLoBAL DEAL voLUME FALLINg BY 12% FRoM FIgURES IN JUNE. AggREgATE DEAL vALUE, oN THE oTHER HAND, RoSE BY AN IMPRESSIvE 18% To US$188.9BN IN THE MoNTH, BoLSTERED BY A FLURRY oF BIg-TICKET DEAL ANNoUNCEMENTS.

Monthly M&A Insider 02

globAl overvieW

TREND gRAPHS

GlobAl M&A quArterly trend

0

200

400

600

800

1,000

1,200

1,400

Q311*

Q211

Q111

Q410

Q310

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Valu

e (U

S$bn

)

Total value Mid-market value

Num

ber of deals

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Total volume Mid-market volume

0

50

100

150

200

250

300

350

400

Q311*

Q211

Q111

Q410

Q310

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Valu

e (U

S$bn

)

Buyout value Exit value

Num

ber of deals

Buyout volume Exit volume

0

100

200

300

400

500

600

700

800

900

GlobAl M&A AnnuAl trend GlobAl M&A AnnuAl prIvAte equIty trend

0

500

1000

1500

2000

2500

3000

3500

4000

YTD 2011*201020092008200720062005

Valu

e (U

S$bn

)


Num

ber of deals

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000


0

100

200

300

400

500

600

700

800

900

YTD 2011*201020092008200720062005

Valu

e (U

S$bn

)


Num

ber of deals


0

500

1,000

1,500

2,000

2,500

3,000

3,500

GlobAl M&A quArterly prIvAte equIty trend


globAl overvieW

TREND gRAPHS

GlobAl M&A sector breAkdown ytd 2011

GlobAl GeoGrAphIc breAkdown ytd 2011

vALUE

vALUE

vOLUME

vOLUME

23.8%

4.3%

0.3%

2.4%4.1%2.1%

0.3%

10.7%

1.4%

11.8%

16.7%

15.1%

7.1%

Industrials & Chemicals

TMT

Consumer

Business Services

Energy, Mining & Utilities

Financial Services

Pharma, Medical & Biotech

Construction

Leisure

Transportation

Real Estate

Agriculture

Defence

1.8% 4.9%

46.5%31.7%

15.1% Asia-Pacific

Europe

North America

Middle East & Africa

Latin America

3.1%3.8%

1.1%1.3%

9.3%

8.7%

0.3%

12.9%13.0%

14.8%

20.0%3.8%

7.9%


TMT

Consumer

Business Services


Financial Services


Construction

Leisure

Transportation

Real Estate

Agriculture

Defence

4.6%2.4%

32.4%

41.2%

19.4% Asia-Pacific

Europe

North America

Middle East & Africa

Latin America


globAl overvieW

TREND gRAPHS

GlobAl M&A deAl sIze breAkdown

vALUE vOLUME

0

10

20

30

40

50

60

70

80

90

100

YTD 2011*201020092008200720062005

38.8%

15.5%

22.1%

8.5%

15.1%

43.9%

16.3%

20.4%

7.3%

12.3%

39.8%

16.9%

23.0%

7.9%

12.5%

42.7%

15.0%

19.1%

8.8%

14.3%

40.6%

16.4%

20.6%

7.9%

14.5%

27.5%

21.0%

27.6%

9.3%

14.6%

33.8%

19.9%

24.9%

9.1%

12.3%

<US$250m or undisclosed value

US$251m-US$500m

US$501m-US$2,000m

US$2,001m-US$5,000m

>US$5,001m

Per

cent

age

80

82

84

86

88

90

92

94

96

98

100

YTD 2011*201020092008200720062005


US$251m-US$500m

US$501m-US$2,000m

US$2,001m-US$5,000m

>US$5,001m

0.7%

1.0%

4.5%

4.7%

89.2%

0.7%

1.2%

5.0%

4.7%

88.4%

0.7%

1.3%

5.5%

5.1%

87.4%

0.6%

0.9%

3.9%

4.6%

90.1%

0.5%

1.0%

3.8%

3.9%

90.9%

89.1%

4.5%

4.8%

1.2%

0.4%

1.3%

5.4%

5.2%

87.5%

0.7%

Per

cent

age

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LATIN AM

ERICA

LATIN AMERICAA MERgERMARkET M&A REpoRT oN


July’s top deal is the US$3.8bn acquisition of an 80% stake in peru-based AFp Integra SA, a 33.7% stake in peru-based InVita Seguros de Vida SA and INg groep’s Latin American pensions, life insurance and investment management operations by Colombia-based grupo de Inversiones Suramericana SA. Announced on 25 July 2011, this acquisition will enable grupo de Inversiones to further enhance the American, European, and Asian insurance and pension businesses of INg, and is expected to be completed by the end of 2011.

Latin American private equity firms are continuing their quiet spell with only two buyouts collectively worth US$557m and one exit worth US$512m - a historic low for Latin American buyouts. Reports are indicating that although close to US$25bn may be available for private equity investments in Latin America, these funds may be harder to reach than it appears. This is due to internal regulatory demands and a new focus on domestic investment, which is the case in Mexico and Brazil.

Looking forward, Carlos Slim Helú-owned America Móvil has put in a bid for the remaining 40% stake of its former parent company Telmex that it does not already own, in a move to consolidate Helú’s telecommunications holdings. The deal would give the Mexican billionaire full control of Mexico’s largest landline phone service provider. This bid is in part an effort to defend the company’s market share from competitors like grupo Televisa, which is also introducing its own phone service. America Móvil is one of the biggest phone service providers in Latin America with 236 million wireless subscribers.

LATIN AMERICA M&A HAS dIppEd To 35 dEALS woRTH US$8.1BN IN THE MoNTH oF JULy. ENERgy, MININg & UTILITIES IS THE SECToR wITH THE HIgHEST MARkET SHARE FoR THIS qUARTER, wITH 25 dEALS woRTH US$1.2BN. ALwAyS A STRoNg pRESENCE, BRAzIL HoLdS 66.1% oF THE MARkET By VALUE ANd 54.9% By VoLUME IN THE yEAR To dATE, wITH A ToTAL oF 169 dEALS woRTH US$44.4BN. INTERESTINgLy, CHILE ALSo HoLdS A LARgE poRTIoN oF THE M&A MARkET FoR THE yEAR To dATE, CoMpRISINg 9.9% oF THE MARkET SHARE By VALUE ANd 8.8% By VoLUME wITH 27 dEALS woRTH US$6.7BN.

07

LATIN AM

ERICA

Monthly M&A Insider

Top 10 LATIN AMERICAN ANNouNCEd dEALs of ThE MoNTh (JuL-11)Announced Bidder company Target company Target dominant

sectorseller company Exit multiples (x) Bid premia

1-day before

deal value

(us$m)Revenue EBITdA p/E

25-Jul-11 grupo de Inversiones Suramericana SA

AFp Integra SA (80.00% stake), InVita Seguros de Vida SA (33.70% stake), and INg groep NV (Latin American pensions, life insurance and investment management operations)

Financial Services INg groep NV 4.0 14.0 - 3,848

08-Jul-11 TIM Celular SA AES Atimus group TMT Companhia Brasiliana de Energia

7.6 - 1,015

13-Jul-11 Fleury SA Labs Cardiolab Exames Complementares SA

pharma, Medical & Biotech

Rede d'or - 775

15-Jul-11 ontario Teachers' pension plan Board

Esval SA (24.40% stake) and Empresa de Servicios Sanitarios del Bio Bio SA (38.50% stake)


Corporacion de Fomento de La produccion

- 557

14-Jul-11 Intercontinental Exchange, Inc.

Cetip SA (12.44% stake) Financial Services Itau Unibanco Holding SA and Advent International Corporation

26.4 53.6 54.6 4.7% 512

08-Jul-11 Light SA Renova Energia (26.20% stake)


-39.1% 230

20-Jul-11 Mitsui & Co Ltd Santa Vitoria Acucar e Alcool Ltda (50.00% stake)


The dow Chemical Company

- 200

18-Jul-11 American Tower Corporation

Millicom International (Colombian telecom towers)

TMT Millicom International Cellular SA

- 182

26-Jul-11 United phosphorus Limited

dVA Agro Brazil (51.00% stake)


dVA International gMBH 2.3 - 150

08-Jul-11 Banco BMg SA Banco Schahin SA Financial Services n/a n/a - 147Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being Latin Americadata correct as of 04-Aug-11

Source: mergermarket

Top dEALS

LATIN AM

ERICA

Monthly M&A Insider

TRENd gRApHS

LATIN AMERICAN M&A quARTERLy TRENd

0

10

20

30

40

50

60

70

Q311*

Q211

Q111

Q410

Q310

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105


Num

ber of dealsValu

e (U

S$bn

)

0

20

40

60

80

100

120

140

160

180


0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Q311*

Q211

Q111

Q410

Q310

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Valu

e (U

S$m

)


Num

ber of deals


0

2

4

6

8

10

12

14

16

LATIN AMERICAN M&A ANNuAL TRENd LATIN AMERICAN M&A ANNuAL pRIvATE EquITy TRENd

0

20

40

60

80

100

120

140

160

180

YTD 2011*201020092008200720062005


Num

ber of dealsValu

e (U

S$bn

)

0

100

200

300

400

500

600


0

1,000

2,000

3,000

4,000

5000

6,000

7,000

8,000

YTD 2011*201020092008200720062005

Valu

e (U

S$m

)


Num

ber of deals


0

5

10

15

20

25

30

35

40

45

50

LATIN AMERICAN M&A quARTERLy pRIvATE EquITy TRENd

08

LATIN AM

ERICA

Monthly M&A Insider

TRENd gRApHS

LATIN AMERICAN M&A gEogRAphIC BREAkdowN yTd 2011

VALUE VoLUME

66.1%

9.9%

6.6%0.1%

0.5%0.3%

0.3%

2.5%1.2%

4.4%

7.8%0.3%

Brazil

Chile

Colombia

Dominican Republic

Guatemala

Ecuador

El Salvador

Mexico

Panama

Peru

Uruguay

Argentina

1.0%

1.0%

8.1%

8.8%

0.6%

0.6%

0.3%

1.3%

0.6% 8.1%

54.9%

5.8%

0.3%7.8%

Brazil

Chile

Colombia

Costa Rica

Dominican Republic

Guatemala

Ecuador

El Salvador

Honduras

Mexico

Panama

Peru

Uruguay

Venezuela

Argentina

LATIN AMERICAN M&A sECToR BREAkdowN yTd 2011

VALUE VoLUME

0.3%

0.5%

19.0%

10.0%

29.0%

0.1%0.1%

3.0%

15.0%

2.0%

13.0%

1.0%

2.0%

6.0%

Consumer



Business Services

Financial Services


Technology

Transportation

Construction

Agriculture

Telecommunicatons

Leisure

Real Estate

Defense

18.0%

17.0%5.0%

4.0%

4.0%

3.0%

3.0%

2.0%

2.0%

2.0%1.0%

1.0%

10.0%

16.0%12.0%

Consumer



Business Services

Financial Services


Technology

Transportation

Construction

Agriculture

Media

Telecommunications

Leisure

Real Estate

Defense

09

10

LATIN AM

ERICA

Monthly M&A Insider

LATIN AMERICAN M&A dEAL sIzE BREAkdowN

VALUE VoLUME

0

10

20

30

40

50

60

70

80

90

100

YTD 2011*201020092008200720062005


US$251m-US$500m

US$501m-US$2,000m

US$2,001m-US$5,000m

>US$5,001m

17.9%

7.2%

25.8%

21.3%

27.8%

46.9%

8.3%

21.8%

10.3%

12.7%

16.2%

10.8%

31.3%

16.2%

25.5%

30.5%

20.3%

24.5%

10.0%

14.7%

9.2%

29.3%

36.7%

10.1%

14.8%9.0%

6.6%

24.5%

18.2%

41.7%

20.1%

20.6%

34.4%

11.5%

13.4%

Per

cent

age

20

30

40

50

60

70

80

90

100

YTD 2011*Y2010Y2009Y2008Y2007Y2006Y2005

0.3%

4.1%

7.1%

88.1%

1.0%

5.4%

7.4%

85.1%

0.2%

5.3%

6.4%

87.4%

0.6%

4.7%

5.3%

88.2%

0.3%

6.9%

5.4%

85.6%81.8%

6.3%

8.4%

1.4%0.3% 1.0% 0.7% 1.2% 1.8% 2.0%

7.8%

6.5%

83.8%

0.6%

Per

cent

age

1.3%


US$251m-US$500m

US$501m-US$2,000m

US$2,001m-US$5,000m

>US$5,001m

TRENd gRApHS

NORTH

AMERICA

A mergermArket m&A report on

11Monthly M&A Insider

nortH AmerICA

PhArMA, MedIcAl & BIotech sees ActIvIty sPIke In July

In July, nortH AmerICA sAw A spIke In AggregAte deAl vAlue In tHe pHArmA, medICAl & BIoteCH spACe. tHe BIggest deAl of tHe montH wAs AnnounCed By express sCrIpts In Its reCommended offer to ACquIre medCo HeAltH solutIons for us$33.4Bn (After net deBt). tHe trAnsACtIon Is expeCted to fACe rIgorous regulAtory sCrutIny.

In the year to date, the pharma, medical & Biotech sector has seen 253 deals valued at us$85bn, and is the third largest sector in north America behind Industrials & Chemicals (us$94.9bn) and energy, mining & utilities (us$182.6bn).

Proposed Medco deal expected to face heavy investigation from the Ftcmedco and express scripts have said publicly that they believe they will be successful in working through the regulatory review process, which they hope to complete in 1H12. the national Community pharmacists Association (nCpA) has already begun proceedings to oppose the merger, according to kevin schweers, nCpA vice president of public relations.

Cvs’s acquisition of Caremark endured a lengthy investigation and was eventually cleared, only to be reopened for a more comprehensive inquiry that is still ongoing at the federal trade Commission (ftC). the Caremark acquisition represented a vertical concern that Cvs – a retail pharmacy – had not previously operated a pBm business.

regulatory attorneys have said the medco-express scripts merger is more of a pure horizontal deal, something that may engender more concern at the ftC. By and large, the ftC has shown a high level of interest in consolidation in the pBm market, and healthcare in general.

Petrohawk bid draws interest in us shale market from foreign buyersBHp’s proposed acquisition of petrohawk energy Corporation, valued at us$14.8bn and the biggest energy deal from north America in July, could intensify interest from foreign buyers in the us shale market.

foreign companies are the most likely bidders to follow BHp Billiton’s path into the north American oil and gas patch, moving from joint venture deals to whole-company acquisitions, according to several sources familiar with foreign buyers.

melbourne, Australia-based BHp’s bid for petrohawk energy represents a large premium for the Houston, texas-based company. other international bidders will be able to pay big premiums because of ‘weak-dollar m&A’ opportunities, as speculated by industry sources.

12

NORTH

AMERICA

Monthly M&A Insider

top deAls & expeCted deAls

toP 10 north AMerIcAn Announced deAls oF the Month (Jul-11) Announced Bidder company target company target dominated

sectorseller company exit multiples (x) Bid premia

1-day before

deal value(us$m)revenue eBItdA P/e

21-Jul-11 express scripts Inc medco Health solutions Inc

pharma, medical & Biotech

0.5 11.2 22.6 26.8% 33,430

14-Jul-11 BHp Billiton ltd petrohawk energy Corporation

energy, mining & utilities

17.1 33.2 49.7 60.5% 14,760

20-Jul-11 ecolab Inc nalco Holding Company Industrials & Chemicals

1.9 10.9 27.5 44.7% 8,138

13-Jul-11 kinetic Concepts Consortium

kinetic Concepts Inc pharma, medical & Biotech

2.8 9.4 19.2 22.5% 5,663

25-Jul-11 validus Holdings ltd transatlantic Holdings Inc financial services

n/a n/a 8.3 5.7% 4,170

11-Jul-11 International paper Company

temple-Inland Inc Industrials & Chemicals

1.1 10.4 20.1 4.9% 4,051

20-Jul-11 China national offshore oil Corporation ltd

optI Canada Inc energy, mining & utilities

9.7 89.1 0.1 9.1% 2,432

01-Jul-11 kohlberg kravis roberts & Co, silver lake partners, and technology Crossover ventures

the go daddy group Inc (undisclosed stake)

technology 2,250

20-Jul-11 CvC Capital partners limited

Bny Convergex group llC (majority stake)

technology the Bank of new york mellon Corporation and gtCr llC

1,900

01-Jul-11 providence equity partners llC

Blackboard Inc Business services

3.7 30.9 93.8 7.0% 1,668

*Indicates lapsed deal Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being north America (us + Canada) data correct as of 05-Aug-11

source: mergermarket

13

NORTH

AMERICA

Monthly M&A Insider

situation target company sector Potential bidder company

Financial advisor to bidder (B); target (t); seller (s)

seller company

Market cap/ est.

value (us$m)

comments

expected deal the Clorox Company Consumer Icahn enterprises lp

goldman sachs (t); Jp morgan (t)

8,957 on 15-Jul-11, Icahn partners lp proposed to acquire the Clorox Company at us$76.5 per share. some sources close to the situation expressed their doubts about the seriousness of Icahn's offer, given that the bidder had not secured committed financing prior to making the proposal. on 18-Jul-11, Clorox announced that its Board of directors had determined that Icahn's offer significantly undervalues the company and is thus not in its shareholders' best interest. subsequently to that announcement, Clorox adopted a stockholder rights plan and declared a dividend of one right on each outstanding share of Clorox's common stock. on 20-Jul-11 Icahn increased its bid to us$80 per share, which was again again rejected by Clorox's Board of directors. In the meantime, it has been speculated that Clorox might receive higher competing offers.

expected deal ralcorp Holdings Inc Consumer ConAgra foods Inc Credit suisse (t); Centerview partners (B)

4,325 on 4-may-11, ConAgra foods made an offer to acquire ralCorp Holdings, Inc. for us$86 per share or for a total consideration of us$4.9bn, in addition to the assumption of ralCorp's debt of us$2.5bn. the expected transaction would allow ConAgra to expand its presence in the private label segment and to consolidate its position as a packaged food company. nonetheless, ralCorp's Board of directors unanimously rejected the proposal and adopted a shareholder rights plan. In the meantime, ralCorp has decided to separate the main company from post foods, ralCorp's cereal division, in a tax-free spin-off to shareholders. some sources close to the transaction say that if the spin-off does take place, ConAgra might acquire the private label business.

expected deal Barnes & nobles Inc Consumer liberty media 1,054 liberty media conducted due diligence on Barnes & nobles on 02-Jun-11, although investors are banking on a higher offer. on 02-Jul-11, liberty Chairman John malone said in an interview at Allen & Co's media conference that he is hopeful that a deal at the right price will happen. steve riggio, Barnes & nobles' Chairman, stated he could not think of a better partner than John malone.

expected deal 99 Cents only stores Consumer leonard green & partners lp and schiffer/gold family

lazard (t) 1,370 99 Cents only stores has received an acquisition proposal from the schiffer/gold family and leonard green & partners lp. the consideration in the proposal is us$19.09 per share in cash. the offer was received on 11-mar-11. outside analysts have concluded, however, that 99 Cent only stores could receive a higher offer.

expected deals based on confirmed announcements by companies involved

PIPelIne oF north AMerIcAn exPected deAls

top deAls & expeCted deAls

14

NORTH

AMERICA

Monthly M&A Insider

trend grApHs

north AMerIcAn M&A quArterly trend

0

100

200

300

400

500

600

Q311*

Q211

Q111

Q410

Q310

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Valu

e (U

S$bn

)


Num

ber of deals

0

200

400

600

800

1,000

1,200

1,400

1,600


0

50

100

150

200

250

Q311*

Q211

Q111

Q410

Q310

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Valu

e (U

S$bn

)


Num

ber of deals


0

50

100

150

200

250

300

350

north AMerIcAn M&A AnnuAl trend north AMerIcAn M&A AnnuAl PrIvAte equIty trend

0

200

400

600

800

1,000

1,200

1,400

1,600

YTD 2011*201020092008200720062005


Num

ber of dealsValu

e (U

S$bn

)

0

1,000

2,000

3,000

4,000

5,000

6,000


0

50

100

150

200

250

300

350

400

450

500

YTD 2011*201020092008200720062005

Valu

e (U

S$bn

)


Num

ber of deals


0

200

400

600

800

1,000

1,200

north AMerIcAn M&A quArterly PrIvAte equIty trend

15

NORTH

AMERICA

Monthly M&A Insider

trend grApHs

north AMerIcAn M&A sector BreAkdown ytd 2011

vAlue volume

15.0%

1.8%

3.2%9.0%

9.0%

29.0%

5.0%

13.0%

2.0%

5.0%

6.0%<1.0%<1.0% Industrials & Chemicals

Technology

Business Services



Financial Services

Consumer

Leisure

Media

Construction

Transportation

Real Estate

Telecommunications

17.0%

15.0%

13.0%

2.9%

12.0%

10.0%

3.0%

3.0%

9.0%

1.0%

10.0%

<1.0% 1.0%1.8%

<1.0%


Technology

Business Services



Financial Services

Consumer

Leisure

Media

Construction

Transportation

Real Estate

Telecommunications

Agriculture

Defense

north AMerIcAn M&A deAl sIze BreAkdown

vAlue volume

0

10

20

30

40

50

60

70

80

90

100

YTD 2011*201020092008200720062005


US$251m-US$500m

US$501m-US$2,000m

US$2,001m-US$5,000m

>US$5,001m

46.6%

15.8%

18.0%

7.0%

12.6%

51.6%

15.0%

17.3%

6.4%

9.7%

42.9%

19.0%

21.8%

6.6%

9.6%

49.3%

13.8%

17.5%

7.2%

12.2%

58.8%

13.3%

13.2%

5.4%

9.2% 12.5%

9.6%

27.6%

18.1%

32.2%

45.7%

20.9%

17.6%

7.2%

8.6%

Per

cent

age

75

80

85

90

95

100

YTD 2011*201020092008200720062005

0.9%1.3%

4.5%

4.9%

88.5%

1.0%

1.5%

5.4%

5.3%

86.8%

1.1%

1.8%

6.3%

5.3%

85.6%

0.9%

3.7%

4.1%

90.6%

1.0%

3.5%

3.8%

91.0%

87.5%

5.2%

5.6%

1.1%1.1%

1.9%

5.7%

6.0%

85.3%

0.7% 0.7% 0.6%


US$251m-US$500m

US$501m-US$2,000m

US$2,001m-US$5,000m

>US$5,001m

Per

cent

age

ASIA-PAcIfIc



ASIA-pAcIfIc

Strong activity in TMT sectorthe month kicked off with a bang when Vodafone group, the Uk-based mobile telecommunications network company, agreed to acquire a 33% stake in Vodafone essar Limited, the India based telecom carrier, from essar group – the India-based conglomerate – for a consideration of US$4.6bn. this acquisition follows Vodafone’s 2007 purchase, when it made its foray into the Indian market, spending US$13.7bn for a large stake in the Indian telecom (for which it is now in the throes of a tax battle with the Indian government). After the recent acquisition, Vodafone will own a 74% stake and the remaining 26% will be owned and controlled by Indian shareholders in compliance with Indian foreign direct investment rules.

the Vodafone deal brought the tmt sector to the top in terms of value with a total of US$7.2bn, accounting for almost one quarter of total dollars spent in July. Witnessing more than just a few large deals, the sector also accounted for a significant portion of deal volume, with 23 transactions or 16% of deals for the month. the second largest deal in the sector saw another Indian acquisition when the Walt Disney company, a US-based multimedia company, made an offer to acquire the shares that it does not already own in UtV Software communications Limited, a BSe and nSe dual-listed tV software company for US$453m.

Deals Down UnderAcquisitions of Australian targets brought in the most value over the month with approximately US$10.4bn in deals. Unsurprisingly, in this mineral-rich nation, the majority of transactions took place in the energy, mining & Utilities sector and accounted for 70% of value but only 36% of volume – in line with characteristically large deals. However, interestingly, the second largest deal took place domestically in the transportation sector when private equity bidder, cp2, an Australia-based infrastructure fund manager, agreed to acquire the remaining 65% securities that it does not already own in connecteast group, an ASX-listed tollway operator, for US$2.7bn.

Chasing China’s consumerchina’s consumer foods sector continues to draw foreign investment. In perhaps one of the month’s most popular deals, Switzerland-based nestle, a global food and beverage company, announced a proposal to acquire 60% of Hsu fu chi International, a china-based snack and candy maker, for US$1.7bn. the proposed transaction will allow nestle and the founding members of Hsu fu chi to create a joint venture that will foster a long-term partnership in expanding the business and preserving the legacy of the Hsu fu chi brand. However, the deal has yet to be approved by chinese regulators who enforce the country’s stringent anti-monopoly laws. the two companies’ combined market share would be less than 10% of china’s total confectionery market, and regulatory approval is not expected to be a problem. And, with the late-June approval of Uk-based Diageo’s 60% stake buy in Sichuan Swellfun, a chinese producer of liquor, things are looking good for nestle – but only time will tell.

ASIA-pAcIfIc m&A ActIVIty oVer tHe montH of JULy SAW Some BIg SpenDS, WItH US$29.5Bn In totAL VALUe for ASIAn tArgetS repreSentIng An IncreASe of 57% from LASt montH AnD A 27% rISe from tHe trAILIng tHree-montH AVerAge. In contrASt, JULy SAW m&A VoLUme fALL to 142 DeALS – A DecLIne of 9% from tHe preVIoUS montH - AS m&A In tHe regIon contInUeD ItS montH-oVer-montH trenD. BUt, WItH tHe LArger trAnSActIonS, BIDDerS Spent An AVerAge of US$207m on m&A DeALS oVer tHe montH, WHIcH IS A 20% IncreASe from tHe yeAr-to-DAte fIgUre.


ASIA-PAcIfIc

top DeALS

Top 10 ASIA-pACIfIC AnnoUnCeD DeAlS of The MonTh (JUl-11)Announced Bidder company Target company Target dominant

sectorSeller company exit multiples (x) Bid premia

1-day beforeDeal value

(US$m)Revenue eBITDA p/e

01-Jul-11 Vodafone group plc Vodafone essar Limited (33.00% stake)

tmt essar group - 5,460

11-Jul-11 peabody energy corporation; and Arcelormittal SA

macarthur coal Limited (83.80% stake)

energy, mining & Utilities

6.4 20.3 32.0 37.4% 3,759

22-Jul-11 cp2 connecteast group (65.00% stake)

transport 14.7 22.5 (loss) 22.2% 2,658

15-Jul-11 cJ gLS corporation; and cJ cheiljedang corporation

korea express co Ltd (37.62% stake)

transport Asiana Airlines, Inc.; Daewoo engineering and construction company Limited

2.9 43.3 57.2 119.5% 1,738

11-Jul-11 nestle SA Hsu fu chi International Ltd consumer 4.5 19.9 30.3 9.1% 1,700

15-Jul-11 Joy global Inc International mining machinery Holding Limited

Industrials & chemicals

the Jordan company LLc

4.6 19.5 25.0 29.8% 1,397

18-Jul-11 Hanlong mining Investment pty Ltd

Sundance resources Limited (81.40% stake)


25.0% 1,194

07-Jul-11 Atco group WA gas networks pty Ltd energy, mining & Utilities

Diversified Utility and energy trust; and Westnet Infrastructure group Limited

- 1,078

13-Jul-11 toyota motor corporation

toyota Auto Body co Ltd (43.23% stake)

Industrials & chemicals

0.1 3.6 30.3 14.4% 961

18-Jul-11 Santos Ltd eastern Star gas Ltd (79.10% stake)


(loss) (loss) 51.3% 672

Based on announced deals, including lapsed and withdrawn bids Based on dominant geography of target company being Asia-pacific Data correct as of 04-Aug-11

Source: mergermarket

18

ASIA-PAcIfIc

Monthly M&A Insider

trenD grApHS

ASIA-pACIfIC M&A qUARTeRly TRenD

0

20

40

60

80

100

120

140

160

Q311*

Q211

Q111

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Q110

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Q408

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Q108

Q407

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Q207

Q107

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Q106

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)


Num

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0

100

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0

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10

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20

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Q311*

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Q110

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Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

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Q106

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Q205

Q105

Valu

e (U

S$bn

)


Num

ber of deals


0

10

20

30

40

50

60

70

80

90

100

ASIA-pACIfIC M&A AnnUAl TRenD ASIA pACIfIC M&A AnnUAl pRIvATe eqUITy TRenD

0

50

100

150

200

250

300

350

400

450

500

YTD 2011*201020092008200720062005


Num

ber of dealsValu

e (U

S$bn

)

0

500

1,000

1,500

2,000

2,500

3,000


0

10

20

30

40

50

60

70

YTD 2011*201020092008200720062005

Valu

e (U

S$bn

)


Num

ber of deals


0

50

100

150

200

250

300

350

ASIA-pACIfIC M&A qUARTeRly pRIvATe eqUITy TRenD

19

ASIA-PAcIfIc

Monthly M&A Insider

trenD grApHS

ASIA-pACIfIC M&A GeoGRAphIC BReAKDoWn yTD 2011

VALUe VoLUme

Australia

China

Hong Kong

India

Indonesia

Japan

Malaysia

Singapore

South Korea

Taiwan

Other

19.3%

3.8%

2.5%

11.6%

3.1%

9.3%

2.3%

10.5%

2.7%

8.0%

26.9%

Australia

China

Hong Kong

India

Indonesia

Japan

Malaysia

Singapore

South Korea

Taiwan

Other

16.9%

4.3%2.7%9.8%

4.2%

14.5%

2.5%

11.1%

1.5%7.5%

25.0%

ASIA-pACIfIC M&A SeCToR BReAKDoWn yTD 2011

VALUe VoLUme

19.0%

15.5%

11.0%

3.6%16.4%

14.7%

3.6%

4.6%

2.8%3.6%0.7%

4.5% Industrials & Chemicals

TMT

Consumer

Business Services


Financial Services


Construction

Transportation

Leisure

Real Estate

Agriculture

20.5%

15.1%

13.2%10.3%

9.8%

4.0%

4.1%

6.1%

8.8%

3.9%2.7%

1.6%


TMT

Consumer

Business Services


Financial Services


Construction

Transportation

Leisure

Real Estate

Agriculture

20

ASIA-PAcIfIc

Monthly M&A Insider

ASIA-pACIfIC M&A DeAl SIze BReAKDoWn

VALUe VoLUme

0

10

20

30

40

50

60

70

80

90

100

YTD 2011*201020092008200720062005


US$251m-US$500m

US$501m-US$2,000m

US$2,001m-US$5,000m

>US$5,001m

23.0%

18.8%

28.6%

9.4%

20.2%

19.2%

22.1%

27.0%

11.0%

20.6%

15.7%

17.1%

30.3%

12.6%

24.3%

29.5%

15.8%

22.2%

12.0%

20.5%

19.9%

16.5%

30.8%

11.2%

21.6% 20.9%

10.5%

28.0%

29.1%

11.7% 11.8%

16.5%

35.9%

13.0%

22.8%

Per

cent

age

75

80

85

90

95

100

YTD 2011*201020092008200720062005

1.0%

5.1%

4.6%

89.0%

1.1%

4.8%

4.8%

88.9%

0.9%

5.0%

5.4%

88.3%

0.9%

4.5%

5.8%

88.4%

0.9%

5.5%

5.3%

87.9% 88.5%

4.9%

4.7%

1.6% 0.8%

5.9%

5.7%

87.3%

0.3% 0.3% 0.2%0.4% 0.3%0.4% 0.4%


US$251m-US$500m

US$501m-US$2,000m

US$2,001m-US$5,000m

>US$5,001m

Per

cent

age

trenD grApHS


europe


eUrope

europe is watching the spin-off trend over the Atlantic very closely. However, the question is whether this would be enough to entice european energy groups to start making a similar move. Analysts are weighing the pressure for a split of Bp, the Uk energy giant. In terms of corporate action, there has not been any value-giving to shareholders ever since the gulf of mexico oil spill disaster. A spin-off might be the answer. UBS, Jpmorgan Cazenove, and Bank of America merrill Lynch are reportedly supportive of such a transaction, whilst sceptics in the market are worried that investment banks will put their potential fee income above Bp shareholders’ value. With weak investment bank earnings, especially in europe at the moment, no one can blame them either.

the analysts raymond James Financial talk to the Street about how different Bp is from Conocophillips or marathon. they point at the proven reserves-to-refining capacity ratio metric: Bp’s ratio is at 5.7, compared to 3.4 for Conocophillips and, even smaller, at 1.4 for marathon oil. that means the two American energy groups are more diversified across their downstream and upstream businesses that a spin-off for them would unlock shareholders’ value. For Bp, that may not be the case.

In the current downturn, the higher input costs and generally lower consumer demands in europe, where Bp refining businesses are located, could hamper profitability. the crude oil price now hovers around the $100/barrel mark. moreover, wages are sticky in a downturn, despite the ‘artificial pay-cut’ economic policy now in place through quantitative easing across europe. the same policy also reduces purchasing power, hence the lower demands.

Judging by the above ratio, Bp is essentially an e&p group with a hint of refining business. therefore, it would be difficult for the refining part of the business to stand on its own feet after the demerger. Shareholders might be compensated by a very generous valuation on Bp’s e&p assets as a standalone company. generous, however, is not what the market is at the moment.

Allied Irish Banks Plc – bumpy ride to nationalisationAllied Irish Banks (AIB) has received another round of government bail-outs in July, which would see the Irish state assuming a 99.8% stake in the bank by injecting a further €5bn of fresh capital. the bank needed to shore up its tier 1 capital to 6%, the current minimum requirement for Irish banks as set out by the country’s central bank.

AIB shareholders have experienced a roller-coaster ride over the year, with the bank initially passing a european stress test in 2010 only to be bailed out months later, in December. Apparently, that was not enough, as this latest transaction suggests.

the latest AIB bail-out might also pressurise the country’s deeply unpopular but necessary austerity measures even further, with further cuts to make up for the capital injection. For now, however, the market seems to have the confidence in the Irish government’s ability to balance its books. the second half of July saw a rapid decline in the Irish 10-year bond yield. From the closing peak of 14.1% on 14 July, it closed at 10.9% by the end of the month. Dublin hopes that this trend will continue for a long time to come, and that AIB’s bumpy ride is now over.

BP UNDER PRESSURE TO SPLIT UP AFTER SIMILAR MOVE ACROSS THE ATLANTIC BY MARATHON OIL AND CONOCOPHILLIPS FoLLoWIng tHe SUCCeSSFUL CompLetIon oF mArAtHon oIL’S SpIn-oFF oF ItS DoWnStreAm BUSIneSS Into mArAtHon petroLeUm Corp In eArLy JULy, ConoCopHILLIpS HAS mADe tHe SImILAr move ALBeIt StILL In A very eArLy StAge. on 14 JULy tHe CompAny AnnoUnCeD tHAt It WAS WorkIng toWArDS tHe DeFInItIve termS to SpLIt ItS UpStreAm BUSIneSS From DoWnStreAm. tHe LIStIng oF tHe tWo SepArAte CompAnIeS IS expeCteD By mID 2012.

22

europe

Monthly M&A Insider

top DeALS & expeCteD DeALS

TOP 10 EUROPEAN ANNOUNCED DEALS OF THE MONTH (JUL-11) Announced Bidder company Target company Target dominated

sectorSeller company Exit multiples (x) Bid premia

1-day before

Deal value(€m)Revenue EBITDA P/E

01-Jul-11 national pensions reserve Fund

Allied Irish Banks plc (98.00% stake)

Financial Services n/a n/a -93.0% 5,000

19-Jul-11 Clayton, Dubilier & rice, LLC; AxA private equity; and Caisse de Depot et placement du Quebec

Spie SA Industrial & Chemicals

pAI partners 0.6 - 2,100

21-Jul-11 BC partners Limited Com Hem AB telecommunications the Carlyle group LLC; providence equity partners LLC; and AxA private equity

- 1,800

19-Jul-11 ontario teachers' pension plan Board

Copenhagen Airports A/S (30.80% stake); and the Brussels Airport Company nv (39.00% stake)

transportation macquarie Airports Limited

- 1,210

15-Jul-11 Zurich Financial Services Ltd

Zurich Santander Insurance America SL (51.00% stake)

Financial Services Banco Santander SA n/a n/a 9.9 - 1,180

26-Jul-11 Bridgepoint Capital Limited; and eurazeo SA

Foncia groupe SA (98.10% stake)

real estate BpCe 1.8 - 997

14-Jul-11 Consortium led by Commerzbank Ag

Amprion gmbh (74.90% stake)


rWe Ag - 974

01-Jul-11 Antin Infrastructure partners SAS; and rreeF pan-european Infrastructure Fund Lp

Andasol I (90.00% stake); and Andasol II (90.00% stake)


ACS Actividades de Construccion y Servicios SA

- 747

21-Jul-11 Blackstone group Lp Jack Wolfskin Ausruestung fuer Draussen gmbH & Co kgaA

Consumer Barclays private equity Ltd; and Quadriga Capital Services gmbH

- 700

05-Jul-11 om group Inc vacuumschmelze gmbH & Co kg

Industrial & Chemicals

one equity partners LLC

1.8 - 700

23

europe

Monthly M&A Insider

PIPELINE OF EUROPEAN ExPECTED DEALSSituation Target company Sector Potential bidder

companyFinancial adviser to bidder (B); target (T); seller (S)

Seller company Market cap/est.

value (€m)

Comments

expected deal

provimi Holding Bv


Cargill, Incorporated; nutreco nv; and royal DSm nv

Jpmorgan (S) permira 1,600 provimi, the Dutch animal fodder producer owned by permira, has planned its second bidding round for 10 August, Beurs nL reported on its website. Dutch companies nutreco and koninklijke DSm announced they were considering a joint offer and, according to media reports, minnesota-located Cargill is also expected to make an offer. For 2010, provimi saw profits of €65.1m on turnover of €1.6bn.

expected deal

northern rock plc

Financial Services

virgin money Holdings (Uk) Limited; J.C. Flowers & Co. LLC

government of the United kingdom

1,100 virgin money and JC Flowers are preparing to battle each other for the acquisition of Uk-based nationalised lender northern rock, the Financial times reported. the report cited sources familiar with the matter who said both suitors launched initial formal bids. the sale is thought likely to bring the government around £1bn (€1.1bn).

expected deal

Ing Life Belgium nv

Financial Services

Delta Lloyd nv Jpmorgan (S) Ing non-Life Belgium nv; and Ing Life Belgium nv

916 Delta Lloyd, the Dutch insurer, is looking at Ing’s Belgian insurance activities, reported Het Financieele Dagblad quoting Delta Lloyd Chairman niek Hoek. For 2010, Ing Life Belgium and Ing non-Life Belgium reported an income from premium of €916m with profits of €4m

expected deal

tenp, and transitgas


marguerite; terra Firma Capital partners Limited; Fluxys SA; global Infrastructure partners; and rreeF Infrastructure

rothschild (S) eni S.p.A. 750 eni, the listed Italian energy group has a preferred bidder for tenp and transitgas, the german and Swiss pipelines, Il Sole 24 ore reported. Bidders for the pipelines could include infrastructure fund marguerite, terra Firma, Belgian energy group Fluxys, global Infrastructure partners and rreeF Infrastructure. the combined value of the two companies is estimated at €750m.

note: expected deals based on confirmed announcements by companies involved Source: mergermarket

top DeALS & expeCteD DeALS

europe


trenD grApHS

EUROPEAN M&A qUARTERLY TREND

0

100

200

300

400

500

Q311*

Q211

Q111

Q410

Q310

Q2 10

Q1 10

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Valu

e (€

bn)


Num

ber of deals

0

200

400

600

800

1000

1200

1400

1600

1800

2000


0

10

20

30

40

50

60

70

80

90

100

Q311*

Q211

Q111

Q410

Q310

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Buyout value Exit value Buyout volume Exit volume

Valu

e (€

bn)

Num

ber of deals

0

50

100

150

200

250

300

350

400

450

EUROPEAN M&A ANNUAL TREND EUROPEAN M&A ANNUAL PRIVATE EqUITY TREND

0

200

400

600

800

1000

1200

YTD 2011*Y2010Y2009Y2008Y2007Y2006Y2005


Num

ber of deals

Valu

e (€

bn)

0

1000

2000

3000

4000

5000

6000

7000


0

50

100

150

200

250

300

YTD 2011*Y2010Y2009Y2008Y2007Y2006Y2005

Valu

e (€

bn)


Num

ber of deals


0

200

400

600

800

1000

1200

1400

1600

EUROPEAN M&A qUARTERLY PRIVATE EqUITY TREND

europe


trenD grApHS

EUROPEAN M&A GEOGRAPHIC BREAkDOwN YTD 2011

vALUe voLUme

UK

CEE

Iberia

France

Nordic

Germany

Benelux

Italy

Others9.0%

6.1%

7.6%

15.2%

14.5%

11.4%

14.4%

11.7%

10.0%

11.7%

8.9%

9.4%

5.4%

19.9%

11.5%

12.4%

6.4%

14.3%

UK

CEE

Iberia

France

Nordic

Germany

Benelux

Italy

Others

EUROPEAN M&A SECTOR BREAkDOwN YTD 2011

vALUe voLUme

2.8%

19.8%

9.9%

0.1%

11.7%

1.4%

1.8%

2.3%

1.3%

0.2%

7.1%

3.9%

4.0%

19.0%

14.7%


Consumer

Business Services

Techonolgy


Financial Services


Construction

Leisure

Transportation

Media

Telecommunications

Agriculture

Real Estate

Defence

1.0%

22.7%

15.3%

0.2%

6.0%

4.5%

4.5%

3.7%

3.0%

1.1%1.4%

14.3%8.4%

7.1%

7.0%


Consumer

Business Services

Techonolgy


Financial Services


Construction

Leisure

Transportation

Media

Telecommunications

Agriculture

Real Estate

Defence

europe


trenD grApHS

EUROPEAN M&A DEAL SIzE BREAkDOwN

vALUe voLUme

0

10

20

30

40

50

60

70

80

90

100

YTD 2011*Y2010Y2009Y2008Y2007Y2006Y2005

<€250m or undisclosed value

€251m-€500m

€501m-€2,000m

€2,001m-€5,000m

>€5,001m

15.1%

23.9%

10.1%

17.9%

33.0%

17.7%

23.2%

8.4%

15.7%

35.1%

16.4%

22.4%

8.3%

13.7%

39.2%

14.5%

19.9%

8.8%

16.6%

40.3%

20.3%

23.7%

9.0%

20.3% 16.9%

9.2%

29.9%

20.4%

26.7% 23.6% 21.2%

24.1%

27.1%

10.4%

16.0%

Per

cent

age

88

90

92

94

96

98

100

YTD 2011*Y2010Y2009Y2008Y2007Y2006Y2005

3.4%

0.7%

3.9%

91.6%

3.8%

0.9%

3.5%

91.4%

4.0%

0.9%

3.9%

90.8%

2.7%

0.6%

3.2%

93.1%

2.1%

0.6%

2.2%

94.9%

93.0%

2.8%

3.3%

0.7% 0.8%

3.5%

3.2%

92.2%

0.5% 0.5% 0.3%0.4% 0.4% 0.2% 0.2%

<€250m or undisclosed value

€251m-€500m

€501m-€2,000m

€2,001m-€5,000m

>€5,001m

Per

cent

age

27

Mid

dle east &

africa


Monthly M&A Insider

energy, mining & Utilities continUed to be the most Active sector by vAlUe in the me&A region with 22 deAls worth Us$1.4bn. in JUly, the top deAl of the month wAs from mining sector JinchUAn groUp internAtionAl resoUrces, the hong kong bAsed mining groUp, which hAs mAde A coUnter offer to AcqUire the pUblicly listed soUth AfricAn metorex limited in A Us$1.3bn cAsh trAnsAction. the offer wAs A competing bid AgAinst brAziliAn vAle s.A.’s offer, which lAUnched An eqUity bid in eArly April to AcqUire metorex At Us$1.2bn. vAle’s offer lApsed dUe to metorex’s decision to Accept JinchUAn groUp’s offer thAt provided A 10% premiUm over metorex’ closing shAre price, As of 4 JUly 2011. Under the terms of the vAle’s offer, metroex woUld pAy A Us$ 11.2m breAk-Up fee to the compAny.

the middle eAst & AfricA

the other top three deals occurred in the consumer sector: electrolux’s acquisition of egyptian home appliances manufacturer, olympic group financial investments, in a Us$565m cash transaction; Japan tobacco’s acquisition of sudan’s largest tobacco provider, haggar cigarette & tobacco factory ltd for Usd$450m, and turkish electrical and home appliances group, Arcelik A.s.’s takeover of south African defy Appliances limited in a Us$323.7m transaction.

looking at the expected deals side, Afrox, the listed south African industrial gas group, might be considering disposal of its lpg business, according to finweek. Afrox has a market capital of approximately Usd$961m.

sonangol, the Angolan state oil company which owns and operates around 500 service stations in the country, is also looking to be privatised. it is expected that the Angolan firms will be more interested in the privatisation than overseas buyers. sanagol has a turnover of Us$21.9bn in 2010.

kuwaiti government’s privatisation of a 35% stake in kuwait Airways is well on the way. the government received three purchase offers that included an offer from qatar Airways, which was considered to be the best bid. According to the close sources, kuwait projects company is amongst the potential buyers, and the stake in kuwait Airways is estimated to be worth around Us$807m. the government is advised by dewey & leboeuf and local firm Abdulhameed Al sarraf & partners on the privatisation. the deadline for submission of expressions of interest for the stake is 25 August 2011; international operators and kuwait listed firms are eligible for the bids, while domestic airlines are excluded from the process.

salesforce, the Us based cloud computing firm, is in negotiations to acquire the israeli based navajo systems that specialised in saas application data security in a transaction worth tens of millions of dollars.

clal insurance enterprise holdings announced that it received a letter of intent from an undisclosed party for its insurance arm, guard financial group. the unidentified party valued the subsidiary at Us$268m. According to the news sources, there have been negotiations between idb holding corp and private equity firm, permira, for sale of clal. the company is also considering the sale of broadgate Underwriting businesses that operate as part of lloyd council.

28

Mid

dle east &

africa

Monthly M&A Insider

top deAls

Top 10 MIddle eAsTern & AfrIcAn Announced deAls of The MonTh (Jul-11) Announced Bidder company Target company Target dominated

sectorseller company exit multiples (x) Bid premia

1-day before

deal value(us$m)revenue eBITdA p/e

05-Jul-11 Jinchuan group international resources co ltd

metorex limited energy, mining & Utilities

3.2 10.0% 1,393

11-Jul-11 electrolux Ab olympic group financial investments

consumer 1.1 18.4 12.8% 565

28-Jul-11 Japan tobacco inc haggar cigarette & tobaco factory ltd

consumer haggar holding company ltd

9.9 450

21-Jul-11 Arcelik Anonim sirketi defy Appliances limited consumer franke Artemis management Ag

0.9 7.2 324

07-Jul-11 newport corporation ophir optronics ltd industrial & chemicals

2.1 12.9 29.1 92.2% 226

13-Jul-11 soprol sAs lesieur cristal sA (41.00% stake)

consumer 0.9 10.1 19.9 -0.5% 163

25-Jul-11 cinmark twenty seven (pty) limited

boschendal limited consumer Jci limited; and ifA hotels and resorts

103

25-Jul-11 rafael Advanced defense systems ltd; and Aeronautics defense systems ltd

controp precision technologies ltd (82.00% stake)

industrial & chemicals

shlomo nir (private investor)

1.8 88

13-Jul-11 delta holding sA societe de sel de mohammedia


government of morocco

5.7 83

14-Jul-11 Africa israel industries ltd yacoby steel corp ltd industrial & chemicals

26

based on announced deals, including lapsed and withdrawn bids based on dominant geography of target being middle east or Africa data correct as of 05-Aug-11

source: mergermarket

29

Mid

dle east &

africa

Monthly M&A Insider

trend grAphs

MIddle eAsTern & AfrIcAn M&A quArTerly Trend

0

20,000

40,000

60,000

80,000

100,000

120,000

Q311*

Q211

Q111

Q410

Q310

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Valu

e (U

S$m

)


Num

ber of deals

0

20

40

60

80

100

120

140

160


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Q311*

Q211

Q111

Q410

Q310

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105


Num

ber of dealsValu

e (U

S$m

)

0

5

10

15

20

25

MIddle eAsTern & AfrIcAn M&A AnnuAl Trend

MIddle eAsTern & AfrIcAn M&A AnnuAl prIvATe equITy Trend

0

20

40

60

80

100

120

140

160

YTD 2011*201020092008200720062005


Valu

e (U

S$bn

)

Num

ber of deals

0

50

100

150

200

250

300

350

400

450

500


0

2

4

6

8

10

12

14

YTD 2011*201020092008200720062005


Valu

e (U

S$bn

)

0

10

20

30

40

50

60

70

Num

ber of deals

MIddle eAsTern & AfrIcAn M&A quArTerly prIvATe equITy Trend

30

Mid

dle east &

africa

Monthly M&A Insider

trend grAphs

MIddle eAsTern & AfrIcAn M&A GeoGrAphIc BreAKdoWn yTd 2011

MIddle eAsTern & AfrIcAn M&A secTor BreAKdoWn yTd 2011

vAlUe

vAlUe

volUme

volUme

15.7%

0.4%0.1% 0.1%

0.3%

20.1%

15.6%

5.0%

5.1%

5.1%

0.8%2.0%

29.8%


Consumer

Energy, Mining & Utilites

TMT

Financial Services


Business Services

Construction

Real Estate

Transportation

Leisure

Defence

Agriculture

1.0%

21.9%

3.3%2.4%

0.5%1.8%

0.3%0.3%

0.1%

0.5%

9.9%

11.7%

4.8%4.2%

4.3%

2.2%

3.9%

9.5%

9.1%

4.9%

2.3%

1.2%

South Africa

Israel

United Arab Emirates

Saudi Arabia

Egypt

Nigeria

Morocco

Kuwait

Kenya

Qatar

Jordan

Tunisia

Ghana

Iraq

Zimbabwe

Algeria

Libya

Namibia

Ethiopia

Mozambique

Swaziland

Oman

3.7%3.1%

1.9% 1.2%0.6%

3.7%

13.6%

16.0%

17.3%

8.6%

9.3%

9.3%

11.7%


Consumer

Energy, Mining & Utilites

TMT

Financial Services


Business Services

Construction

Real Estate

Transportation

Leisure

Defence

Agriculture

38.4%

5.4%

5.2%

2.8%

2.7%

21.2%

8.0%

3.8%

1.0%

3.1%0.4% 3.3%

0.5%

2.8% 0.2%0.1%

0.3%0.5%

South Africa

Israel

United Arab Emirates

Saudi Arabia

Egypt

Nigeria

Morocco

Kuwait

Kenya

Qatar

Jordan

Tunisia

Ghana

Iraq

Zimbabwe

Algeria

Libya

Ethiopia

31

Mid

dle east &

africa

Monthly M&A Insider

trend grAphs

MIddle eAsTern & AfrIcAn M&A deAl sIZe BreAKdoWn

vAlUe volUme

0

10

20

30

40

50

60

70

80

90

100

YTD 2011*201020092008200720062005

12.1%

21.5%

54.8%

5.1%5.0%

86.4%

13.3%

11.3%

67.2%

17.5%

19.0%

47.7%

19.2%

13.2%

53.2%

67.0%

11.6%

11.0%

15.0%

10.3%3.1%

7.3%14.1% 12.9% 9.3%

11.4%

7.9%

64.7%

1.3% 0.4% 0.9% 1.7% 1.6% 1.1% 1.1%

<US$14.9m or undisclosed value

US$15m-US$100m

US$101m-US$250m

US$251m-US$500m

>US$501m

Per

cent

age

0

10

20

30

40

50

60

70

80

90

100

YTD 2011*201020092008200720062005

34.8%

10.7%

8.6%

5.6%

34.0%

14.2%

6.2%

9.2%

32.6%

15.4%

5.7%

7.2%

36.8%

11.2%

5.7%3.8%

32.4%

13.2%

4.1%3.4% 5.8%

5.1%

33.4%

11.3%

10.4%

6.1%

40.3%36.4%

39.1%42.5% 47.0% 44.4% 45.1%

28.7%

9.8%

<US$14.9m or undisclosed value

US$15m-US$100m

US$101m-US$250m

US$251m-US$500m

>US$501m

Per

cent

age


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AboUt merrill corporAtion

Merrill Transaction and compliance services through a broad range of tools and services, merrill corporation streamlines document composition, filing, printing, distribution and electronic access to the transaction and regulatory compliance activities of its clients engaged in securities offerings, reorganizations, mergers and acquisitions, sec and other regulatory filings. As a registered, third-party service provider offering public companies expert edgArization and xbrl filing services, merrill professionals can compose, edit, electronically file, manage and distribute data in printed or electronic format.

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merrill datasite is designed for rapid deployment and can be up and running within two hours of a client’s need. our team can scan, upload and organize thousands of pages of content from any source in 24 hours or less. every aspect of the process, from document scanning to vdr hosting and project management is delivered by merrill’s multilingual team, available around the clock worldwide.

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foUnded in 1968 And heAdqUArtered in st. pAUl, minnesotA, merrill corporAtion is A leAding provider of oUtsoUrced solUtions for complex bUsiness commUnicAtion And informAtion mAnAgement. merrill’s services inclUde docUment And dAtA mAnAgement, litigAtion sUpport, lAngUAge trAnslAtion services, fUlfillment, imAging And printing. merrill serves the corporAte, legAl, finAnciAl services, insUrAnce And reAl estAte mArkets. with more thAn 5,000 people in over 40 domestic And 22 internAtionAl locAtions, merrill empowers the commUnicAtions of the world’s leAding orgAnizAtions.


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Merrill datasite – built with the client in mindmerrill datasite was created to meet its clients’ needs and built to their specifications. since 2002 we have consistently leveraged the experiences of our clients to add leading-edge functionality to the available toolset. merrill datasite allows its users and administrators to:

examine documents immediately. patented technology ensures you never have to wait for a document to be downloaded. because the data resides on merrill’s servers, you can simultaneously view an unlimited number of documents in multiple windows without having to close out or save to your “temp” file. when faced with hundreds of documents to review, this feature saves significant time and expense.

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Using wildcard, fuzzy, proximity, boosting, boolean and grouping modifiers, you can search and find exact matches and near-matches, including misspelled words. potential buyers will enjoy increased confidence knowing they’ve received and seen all materials and documents that are relevant to their decision-making.

protect confidential information. ”view-only” documents are neverdownloaded. merrill datasite, not the computer’s browser, controls thecaching process providing unmatched security levels. Unlike other vdrproviders, images are never viewable on the pc’s cache after the conclusion of a session.

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need to work remotely?no problem. whether you’re working in beijing or new york, you can view your documents online without having to navigate through internal firewalls and email restrictions that often exist for outside company connections and which delay the due diligence process.

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this publication contains general information and is not intended to be comprehensive nor to provide financial, investment, legal, tax or other professional advice or services. this publication is not a substitute for such professional advice or services, and it should not be acted on or relied upon or used as a basis for any investment or other decision or action that may affect you or your business. before taking any such decision you should consult a suitably qualified professional adviser. whilst reasonable effort has been made to ensure the accuracy of the information contained in this publication, this cannot be guaranteed and neither mergermarket nor any of its subsidiaries nor any affiliate thereof or other related entity shall have any liability to any person or entity which relies on the information contained in this publication, including incidental or consequential damages arising from errors or omissions. Any such reliance is solely at the user’s risk.

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The following notes pertain to data contained in this publication:

• deals are included where the deal value is greater than or equal to €5m.

• where no deal value has been disclosed, deals are included if the turnover of the target is greater than or equal to €10m.

• deals are included in the graphs and top deals in each section based on the dominant geography and dominant sector of the target company. data underlying the league tables are based on deals where the bidder, target or parent geography of either is that of the geography in focus.

• ytd 2011 refers to the period 01-Jan-11 to 31-Jul-11. q3 2011 refers to the period 01-Jul-11 to 31-Jul 11.

Documents

A mergermArket report on globAl m&A Activity Monthly M&A InsIder … · 2011-08-17 · You can be ready for due diligence in a matter of hours with Merrill DataSite. In today’s