A mergermArket report on globAl m&A Activity Monthly M&A ... · to telecommunications giant Bell Canada Enterprises. GLOBAL OVErVIEW head of research – Elias Latsis editor – rory

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

September 2010

Monthly M&A InsIdermergermarket

GlobAl overvIew 01

AmericAS: lAtin AmericA 05

north AmericA 12

ASiA-pAcific 24

europe 35

middle eASt & AfricA 46

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CONTENTS

Monthly M&A Insider

globAl overvieW

01

Not to be completely outdone, Europe has seen its fair share of M&A activity at the top-end of the market with the largest transaction being the €20.70bn (US$27.28bn) reverse takeover involving GDF Suez Energy International and International Power. Even Latin America and the Asia-Pacific regions have witnessed significant activity with regional heavyweights such as Telefonica, Panasonic and the newly created Sumitomo Mitsui Trust Holdings all recently moving to broker deals.

Against this backdrop, private equity houses have largely taken something of a backseat as their corporate counterparts have grabbed the M&A headlines. Nevertheless, it is arguable that the real story of recent months has been the return of the private equity mega-deal with 14 US$1.00bn+ buyouts announced in the second half of 2010. Unsurprisingly, such activity has largely centred in the North American market with the top buyout seeing the Blackstone Group acquire US-based energy firm Dynergy for a total consideration of US$4.85bn. Elsewhere, another high profile deal was announced in the Leisure space with 3G Capita acquiring fast food behemoth Burger King in a take private valued at US$3.83bn.

To an extent, recent deal flow has been an exacerbation of a longer-term trend which has seen financial investors increasingly ready, willing and able to broker sizeable deals. This is reinforced to good effect by mergermarket data which shows that the average size of disclosed value private equity-related deals in 2010 to date stands at US$256m. Tellingly, this represents a marked increase on 2009 and, to a lesser extent, 2008 numbers where the corresponding figures stood at US$189m and US$240m respectively.

While private equity buyout numbers continue to recover in terms of transaction volumes and valuations, it is also notable that several significant exits have also come to market as sale conditions gradually improve. This has helped spur a relative flurry of private equity disposals with mergermarket data showing that 24 US$500m+ exits have been brokered over the second half of 2010 so far, compared to just five such deals over the same timeframe 12 months previous.

Clearly, the global financial crisis has had a profound impact upon holding periods with many funds opting against a sale over the last 24 months, generally preferring to keep firms in portfolio until the market begins to recover. While the global economy is far from out of the woods, it is reasonable to argue that leverage is slowly becoming easier to obtain and the price dislocation between buy and sell-side parties is easing. As such, a number of private equity firms, under pressure to provide returns to increasingly disaffected and impatient limited partners, are now exploring disposal avenues, leading to recent brisk activity in the exit market. With the IPO window remaining shut, a sale to a trade player remains the most likely exit route, accounting for 67.0% of overall exits (excluding IPOs) in H2 2010 to date.

The top exit of recent months is a case in point in this regard with a consortium of firms comprising Ontario Teachers’ Pension Plan, Torstar Corporation and The Woodbridge Company disposing of an 85.00% stake in Canadian multimedia firm CTVglobemedia (excluding its Globe and Mail businesses). In a deal valued at US$2.85bn, the firms sold out to telecommunications giant Bell Canada Enterprises.

GLOBAL OVErVIEW

head of research – Elias Latsis

editor – rory McNeil

For advertising opportunities contact:

erik wickman

tel: + (1) 212 6863329

[email protected]

Global overview: Tom Coughlan

latin America: Mathew Albert

north America: Jason Cozza

Asia-Pacific: Shunsuke Okano and Anita Wong

europe: Samuel Tedjasukmana and Giovanni Gallorini

Middle east & Africa: Marie-Laure Keyrouz and Lars Lundqvist

GlobAl overvIew

THE rECENT rETUrN OF LArGE-CAP COrPOrATE M&A HAS BEEN WELL DOCUMENTED. INDEED, THE THIrD qUArTEr OF 2010 ALrEADy ABOUNDS WITH ExAMPLES OF TrANSFOrMATIONAL PLAyS MADE By ACqUISITIVE AND AMBITIOUS TrADE PLAyErS. THE NOrTH AMErICAN MArKET HAS SEEN ONE OF THE LArGEST ANNOUNCED M&A DEALS OF rECENT yEArS IN THE FOrM OF BHP BILLITON’S US$41.91BN HOSTILE BID FOr CANADA’S POTASH COrPOrATION OF SASKATCHEWAN.

Monthly M&A Insider 02

globAl overvieW

TrEND GrAPHS

GlobAl M&A quArterly trend

VALUE VOLUME

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

of d

eals

GlobAl M&A quArterly MId-MArket trend

VALUE VOLUME

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

500

1,000

1,500

2,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

Moving average trend line


globAl overvieW

TrEND GrAPHS

GlobAl M&A sector breAkdown ytd 2010

VALUE VOLUME

8.5%

6.3%

15.3%

10.9%

3.8%

1.3%

1.8%

0.9%0.4%2.8%

13.3%

25.6%

9.1%

Industrials & Chemicals

TMT

Consumer

Business Services

Energy, Mining & Utilities

Financial Services

Pharma, Medical & Biotech

Construction

Leisure

Transportation

Real Estate

Agriculture

Defence


TMT

Consumer

Business Services


Financial Services


Construction

Leisure

Transportation

Real Estate

Agriculture

Defence

12.4%

15.0%

17.7%

4.1%

3.4%

2.2%

2.9%

0.5%1.3%

10.9%

10.4%

11.6%

7.6%

GlobAl M&A quArterly PrIvAte equIty trend

VALUE VOLUME

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

Global buyouts

Global exits

0

100

200

300

400

500

600

700

800

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

Global buyouts

Global exits


globAl overvieW

TrEND GrAPHS

GlobAl M&A deAl sIze breAkdown

VALUE VOLUME

0

500

1,000

1,500

2,000

2,500

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> US$501m

US$251m-US$500m

US$101m-US$250m

US$15m-US$100m

US$5m-US$14.9m

Valu

e (U

S$bn

)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> US$501m

US$251m-US$500m

US$101m-US$250m

US$15m-US$100m

US$5m-US$14.9m

Value not disclosed

Num

ber

of d

eals

LATIN AM

ERICA

LATIN AMERICAA MERgERMARkET M&A REpoRT oN


The transaction saw Embratel, one of Brazil’s leading fixed-line telecommunications businesses, move to acquire a 58.06% stake in NET Serviços de Comunicação, the São paulo headquartered provider of cable television and broadband internet, for a total consideration of US$2.61bn.

The deal, which ranks as the largest in Latin America in August, will see NET become part of the business empire of Mexican telecoms magnate Carlos Slim, owner of Embratel’s parent company América Móvil. The NET acquisition is complementary to America Móvil’s strategy to integrate fixed-line, broadband internet, wireless and TV services into a single structure in the Brazilian market at a time when competition for market share from the Spanish group Telefónica is on the rise.

In July, Telefónica brokered the US$9.75bn acquisition of a 50.00% stake in Brasilcel, a joint venture holding company with portugal Telecom that has a controlling stake in Brazil’s largest wireless operator Vivo. The Spanish group will now move to buyout Vivo’s minority shareholder s and to merge the business with its fixed-line operator Telesp.

going forward, the grab for market share and need to remain competitive in service offerings by these two telecoms giants, as well as other big international players, is sure to drive further consolidation activity in the fast-growing Brazilian market. portugal Telecom, for instance, is currently hammering out a stake acquisition of for around a 23.00% share in oi, another leading telecoms operator in Brazil, in deal estimated to be worth US$4.70bn.

Elsewhere, the second largest transaction in the month of August came to market in the Energy, Mining & Utilities space. The deal saw Bp divest its Colombian-based assets to Talisman Energy, a Canadian oil and gas firm, and Ecopetrol, the state-controlled energy firm of Colombia, in a transaction valued at US$1.75bn. At this valuation, the transaction is also the second largest in the Energy, Mining & Utilities space of 2010, surpassed only by CNooC’s acquisition of a 50.00% stake in Bridas Corporation for US$3.10bn in the first quarter of the year.

The asset sell-off is part of a wave of divestitures being undertaken by Bp as the group seeks to raise some US$30.00bn to cover costs and pay down debt in the aftermath of the gulf of Mexico oil spill. on the buy-side, the acquisition is in line with Ecopetrol’s strategy to build up its reserves and production capacity, as well as to strengthen its position in the natural gas industry and in the transportation of oil and gas resources business segment. For Talisman, the joint acquisition is a strategic play to increase the company’s Latin American assets and to consolidate its position in the region.

IN AUgUST, ThE LATIN AMERICAN dEAL MARkET SAw yET ANoThER LARgE TIE-Up BRokEREd IN ThE TMT SECToR, STRAIghT oN ThE hEELS oF A STRINg oF LARgE-CAp dEALS IN ThE SpACE ThIS yEAR.

06

LATIN AM

ERICA

Monthly M&A Insider

Target: NET Servicos de Comunicacao SA (stake: 58.06%) Announced: 5-Aug-10

Bidder: Embratel participacoes SA (formerly MCI Brazil) Deal value: US$2.61bn

Seller: Deal nature: Acquisition, domestic, public

STRUCTURE• Embratel participacoes SA has made a tender offer to

acquire a 58.06% economic interest in Net Servicos de Comunicacao SA.

• Net Servicos de Comunicacao SA, the Brazil-based company headquarted in Sao paulo, is a telecommunications company that specializes in cable television and broadband internet services.

• Embratel participacoes SA, a Brazil-based company headquarted in Rio de Janeiro, Brazil is a telecommunications company that specializes in fixed-line voice and data services, as well as pay-television.

TERMS• 199,124,767 preferred shares at BRL23.00 per share,

which represents 87.14% of preferred shares.

• Total preferred and common shares represent a 58.06% economic interest in Net Servicos de Comunicacao SA.

• The implied equity value of the transaction is approximately BRL7.30bn (US$4.47bn).

RATIONALE• The acquisition of Net Servicos de Comunicacao

SA is in line with Carlos Slim’s strategy to create a telecommunications giant in Brazil that would align and offer fixed-line, broadband internet, wireless, and TV services under a single structure.

• Slim currently owns America Movil in which owns Embratel who’s subsidiary Empresa Brasileira de Telecomunicações SA is issuing the tender offer to the preferred shareholders of Net.

• The acquisition is also part of Slim’s strategy to compete against other major market presences such as Telefonica which acquired Vivo participacoes SA, another telecommunications company in Brazil. Embratel and Empresa together currently own 12.86% of Net Servicos preferred shares.

CONDITIONS • Subject to the acceptance of the preferred shareholders.

BACKGROUND • Empresa Brasileira Telecomunicacoes SA, the Brazil-

based subsidiary of Embratel participacoes SA issued the tender offer to Net Servicos de Comunicacao SA preferred shared holders.

• Embratel is indirectly owned by Carlos Slim, the Mexican business man who owns Embratel through America Movil SAB, the Mexico-based listed wireless carrier. Carlos Slim also owns Telemex, the Mexico-based listed telecoms company which he plans to merge with America Movil to compete against the Telefonica Vivo combination.

• Empresa Brasileira and Embratel, before the issue of the tender offer, together owned 37.90% of Net Servicos de Comunicacao SA common shares and 12.86% of preferred shares as of their 2005 stake acquisition.

dEAL oF ThE MoNTh

Advisers

Target/Seller Bidder

Financial Financial Banco Itau BBA SA

Financial Legal Xavier Bernardes Braganca

mergermarket/dealReporter Intelligence

19-Aug-10 Embratel delays US$2.60bn public offer for all preferred shares in Net Servicos to 29 September, says bid also will be made in USA

5-Aug-10 Embratel bids US$2.60bn for preferred shares in Net Servicos

07

LATIN AM

ERICA

Monthly M&A Insider

TOp 15 LATIN AMERICAN ANNOUNCED DEALS YTD 31 AUGUST 2010Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia

1-day beforeDeal value

(US$m)Revenue EBITDA p/E

13-Jan-10 C Carso global Telecom SAB de CV

TMT America Movil SA de CV 1.7 4.9 14.4 3.1% 28,055

28-Jul-10 p Barsilcel NV (50% stake)

TMT Telefonica SA portugal Telecom SgpS SA

- 9,746

11-Jan-10 C FEMSA Cerveza SA de CV

Consumer heineken NV Fomento Economico Mexicano SAB de CV

- 7,692

13-Jan-10 C Telmex Internacional SAB de CV (39.30% stake)

TMT America Movil SA de CV 2.6 10.6 23.6 2.2% 6,533

02-May-10 p Alumina do Norte do Brasil SA (57% stake); Aluminio Brasileiro SA (51% stake); Companhia de Alumina do para (61% stake); and paragominas bauxite mine (60% stake)


Norsk hydro ASA Vale SA - 4,900

22-Jan-10 C polibutenos SA Industrias Quimicas (33.33% stake); Quattor participacoes SA (60% stake); and Unipar Comercial e distribuidora SA


Braskem SA Uniao de Industrias petroquimicas SA

- 4,238

27-Jan-10 C Bunge participacoes e Investimentos SA


Vale SA Bunge Limited - 3,800

14-Mar-10 p Bridas Corporation (50% stake)


CNooC International Limited

Bridas Energy holdings Ltd

- 3,100

05-Aug-10 p NET Servicos de Comunicacao S.A. (58.06% Stake)

TMT Embratel participacoes SA

1.7 6.8 11.3 14.5% 2,606

09-Jun-10 p grupo Financiero Financial Services

Banco Santander Bank of America Corporation

n/a n/a - 2,500

03-May-10 p Agre Empreendimentos Imobiliarios SA

Real Estate pdg Realty SA Empreendimentos e participacoes

n/a n/a 13.8 1.5% 1,955

15-Jul-10 p BAC Credomatic gECF

Financial Services

grupo Aval Acciones y Valores SA

gE Capital global Banking

n/a n/a - 1,900

10-Feb-10 C Fertilizantes Fosfatados SA (36.79% stake)


Vale SA The Mosaic Company; and yara Brasil Fertilizantes SA

7.2 - 1,834

03-Aug-10 p Bp Exploration Company (Colombia) Limited


Talisman Energy Inc; Ecopetrol SA

Bp plc - 1,750

18-May-10 p plena Transmissoras SA (Seven Brazilian transmission companies)


State grid Corporation of China

plena Transmissoras SA

- 1,721

C = Completed; p = pending; L = Lapsed Source: mergermarket

Top dEALS & EXpECTEd dEALS

LATIN AM

ERICA


Top dEALS & EXpECTEd dEALS

TOp 5 LATIN AMERICAN ANNOUNCED DEALS OF ThE MONTh (AUGUST 2010)Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia


(US$m)Revenue EBITDA p/E

05-Aug-10 p NET Servicos de Comunicacao SA (58.06% stake)

TMT Embratel participacoes SA (formerly MCI Brazil)

1.7 6.8 11.3 - 2,606

03-Aug-10 p Bp Exploration Company (Colombia) Limited


Talisman Energy Inc; Ecopetrol SA

Bp plc n/a n/a n/a - 1,750

03-Aug-10 p Rodovias Integradas do oeste S/A (73.45% stake)

Construction Companhia de participacoes em Concessoes

n/a n/a n/a - 593

07-Aug-10 p Mabesa do Brasil SA Consumer hypermarcas SA n/a n/a n/a - 199

30-Aug-10 C Industria Meias Scalina Ltda (51.00% stake)

Consumer Carlyle South America Buyout Fund; FIp Brazil de Internacionalizacao de empresas

n/a n/a n/a - 159


pIpELINE OF ExpECTED DEALS Situation Target

companySector potential bidder

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

Seller company Market cap/est. value (US$m)

Comments

Auction Aguas Nuevas


Macquarie Capital, Morgan Stanley Infrastructure or Marubeni

Banco Santander 350 Banco Santander is negotiating with a few buyers on the sale of Aguas Nuevas, the Chilean utility, and it is close to sealing a deal, according to a source close to the situation. In February, Banco Santander sent out an information memorandum on Aguas Nuevas and bids were expected the following month. Likely buyers are infrastructure funds such as Macquarie Capital and Morgan Stanley Infrastructure. A published report in december 2009 tagged Japanese conglomerate Marubeni as a potential buyer. The source could not comment on a potential deal value, but it has been reported that Aguas Nuevas could be worth US$350m. The utility has 356,000 customers and an 8.8% share of the Chilean water market. Santander Infrastructure Fund II, which specializes in infrastructure assets, acquired the Chilean utility last year from grupo Solari.

Rumoured takeover target

JBS SA Agriculture Minerva SA n/a JBS, the world’s largest meatpacker, may sell its Carceres slaughtering plant located in the state of Mato grosso, said a company officer and an industry source.

Expected deals based on confirmed announcements by companies involved

09

LATIN AM

ERICA

Monthly M&A Insider

LEAgUE TABLES

VALUEYTD

31-Aug-10house Value

(US$m)Deal count

1 Credit Suisse 68,957 23

2 Citigroup 49,723 9

3 Bank of America Merrill Lynch 23,728 14

4 Morgan Stanley 16,111 6

5 Credit Agricole 11,732 7

6 BTg pactual 11,050 19

7 Caixa Banco de Investimento 11,038 5

8 UBS Investment Bank 10,768 7

9 Banco Espirito Santo de Investimento 9,886 4

10= Mediobanca 9,746 1

10= Sg 9,746 1

12 Rothschild 9,712 8

13 Allen & Company 9,132 2

14 JpMorgan 8,343 9

15 deutsche Bank 6,855 6Source: mergermarket

VoLUME

The financial advisor league tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals. The tables cover all sectors andare based on the geography of either the target, bidder or seller being Latin American-based.

YTD 31-Aug-10

house Value (US$m)

Deal count


2 BTg pactual 11,050 19

3 Bank of America Merrill Lynch 23,728 14

4 Citigroup Inc 49,723 9

5 JpMorgan 8,343 9


7 Credit Agricole 11,732 7



10 deutsche Bank 6,855 6

11 goldman Sachs 4,959 6

12 Caixa Banco de Investimento 11,038 5

13 hSBC Bank 2,576 5

14 Banco Espirito Santo de Investimento 9,886 4

15 Santander global Banking and Markets 4,338 4Source: mergermarket

TOp 15 FINANCIAL ADVISORS – LATIN AMERICA

VALUEYTD


(US$m)Deal count

1 dewey & LeBoeuf 34,628 3

2 Skadden Arps Slate Meagher & Flom 18,938 7

3 Allen & overy LLp 14,742 3

4 Cleary gottlieb Steen & hamilton 14,567 6

5 Machado Meyer Sendacz e opice 13,933 14

6 Souza, Cescon Avedissian, Barrieu e Flesch Advogados 13,697

3

7 Tozzini Freire Teixeira E Silva Advogados 13,478 12

8 Uria Menendez 13,269 7

9 Freshfields Bruckhaus deringer 13,090 3

10 demarest e Almeida 11,255 13

11 Cuatrecasas, goncalves pereira 9,746 3

12= de Brauw Blackstone westbroek 9,746 1

12= garrigues 9,746 1

12= houthoff Buruma 9,746 1

15 Simpson Thacher & Bartlett 9,495 6Source: mergermarket

VoLUME

The legal advisor league tables by value and volume have been run from 1 January 2010 to 31 August 2010 and include lapsed and withdrawn deals. The tables cover all sectors andare based on the geography of either the target, bidder or seller being Latin American-based.

YTD 31-Aug-10

house Value (US$m)

Deal count

1 Machado Meyer Sendacz e opice 13,933 14

2 demarest e Almeida 11,255 13

3 Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados

1,716 13

4 Tozzini Freire Teixeira E Silva Advogados 13,478 12

5 pinheiro Neto Advogados 5,523 12

6 Barbosa, Mussnich & Aragao 5,517 11

7 Estudio Muniz, Ramirez, perez-Taiman & olaya Abogados

900 11

8 Azevedo Sette Advogados 489 9


10 Uria Menendez 13,269 7

11 Cleary gottlieb Steen & hamilton 14,567 6

12 Simpson Thacher & Bartlett 9,495 6

13 davis polk & wardwell 8,300 6

14 Latham & watkins 6,800 6

15 prieto & Carrizosa 1,323 6Source: mergermarket

TOp 15 LEGAL ADVISORS – LATIN AMERICA

10

LATIN AM

ERICA

Monthly M&A Insider

TRENd gRAphS

LATIN AMERICAN M&A qUARTERLY TREND

VALUE VoLUME

0

10,000

20,000

30,000

40,000

50,000

60,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

25

50

75

100

125

150

175

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals


LATIN AMERICAN M&A qUARTERLY MID-MARKET TREND

VALUE VoLUME

0

1,000

2,000

3,000

4,000

5,000

6,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

20

40

60

80

100

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

11

LATIN AM

ERICA

Monthly M&A Insider

TRENd gRAphS

LATIN AMERICAN M&A SECTOR BREAKDOwN YTD 2010

VALUE VoLUME

9.7%

9.8%

18.1%

2.3%0.8% 1.8%

<0.1%0.6%

0.7%

46.8%

1.2%

7.7%


Consumer


Business Services

Financial Services

TMT

Leisure


Agriculture

Transport

Real Estate

Construction

15.3%

20.6%

1.6%1.2%

3.6%4.4%

10.1%

10.5%13.3%

4.8%

5.6%

8.9%


Consumer


Business Services

Financial Services

TMT

Leisure


Agriculture

Transport

Real Estate

Construction

LATIN AMERICAN M&A qUARTERLY pRIVATE EqUITY TREND

VALUE VoLUME

0

3

6

9

12

15

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

Latin American buyouts

Latin American exits

0

500

1,,000

1,500

2,000

2,500

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

Latin American buyouts

Latin American exits

NORTH

AMERICA

NORTH AMERICAA MERgERMARkET M&A REpORT ON

12Monthly M&A Insider

TMT saw its share of industry shakeups with chipmaker Intel expanding into the security space by placing a US$6.51bn cash offer to acquire security software provider McAfee. Computer manufacturers Hewlett packard and Dell fought over cloud computing provider 3par, which eventually accepted Hp’s superior offer of US$33.00 per share for a cash consideration worth US$1.97bn.

Whether the rest of 2010 can maintain last month’s momentum remains to be seen. In a time when businesses are adapting to economic uncertainty and willing to look outside their core offerings for revenue expansion, anything goes.

Oracle clash may prompt HP to rethink data center partnerships, industry sources sayHewlett-packard is expected to assess its data center partnership with Oracle as relations between the two companies sour, industry sources said.

Oracle CEO Larry Ellison yesterday issued a terse response to Hp’s filing a lawsuit against its former CEO Mark Hurd, stating Hp’s legal attack was putting the partnership at risk. Hp is alleging that Hurd will inevitably disclose trade secrets to his new employer.

In addition to seeking new partners, Hp could strengthen its data center offering with buys to hedge its bets in case of a further breakdown in its relationship with Oracle. “Hp could certainly benefit from beefing up their software assets,” said Enterprise Management Associates analyst Rick Sturm. Companies that would bolster Hp’s database offering and help it compete with Oracle include business intelligence companies MicroStrategy and SAS Institute, data integration specialist Informatica, or data warehousing company Netezza.

Netezza shares jumped about 5.0% in trading since yesterday morning on takeover rumors and reports that the Marlborough, Massachusetts-based company cancelled a planned dinner with investors. Netezza did not respond to a request for comment.

palo Alto, California-based Hp and Oracle have been moving apart since Oracle acquired hardware vendor and Hp rival Sun Microsystems in April 2009, Enderle group analyst Rob Enderle said.

Oracle is seen as beefing up its offering to match that of Hp in the data center space, but Hp is still without a strong product to match Oracle on the database side. “Hp’s choices are limited. They will have to rely on a partner to displace Oracle,” Enderle said.

SAp, which bought database management company Sybase earlier this year, would be the most logical partner for Hp. The german software giant would likely welcome closer ties to help compete against Oracle, he said. The two could replicate ‘Acadia’, a joint sales venture between EMC, VMware, and Cisco built around their data center products.

The latest conflict between Hp and Oracle is an opportunity for SAp to build closer ties with Hp, an industry executive said. “SAp needs partners to help continue their existence,” he said.

Microsoft also could see Hurd’s move to Oracle as a chance to bring Microsoft and Oracle closer together, the executive said.

While there is widespread speculation over the deteriorating relationship between Hp and Oracle, Wedbush Morgan Analyst kaushik Roy and the executive believed Oracle and Hp have little choice but to work as a team to satisfy customer demands.

August BOOM

FOR A HISTORICALLy CALM MONTH IN THE M&A LANDSCApE, AUgUST SAW SOME OF THE bIggEST DEALS ANNOUNCED IN 2010. bHp’S HOSTILE US$41.91bN TAkEOVER FOR pOTASH CORpORATION, THE CANADA-bASED FERTILIzER COMpANy, pUSHED AUgUST INTO A RECORD bREAkINg MONTH OF MULTI-bILLION DOLLAR MEgADEALS, AMIDST AN ERA OF HIgH UNEMpLOyMENT AND ECONOMIC UNCERTAINTy.

13

NORTH

AMERICA

Monthly M&A Insider

NORTH AMERICA

Dynegy: Prospects remain weak for competing bid, sources say The possibility of a rival bid for Dynegy remains low, despite market speculation, said two sources familiar with the matter and three industry bankers.

On the back of heavy option trading on a potential bidding war and news reports about another private equity firm looking at outbidding New york-based The blackstone group, Dynegy shares have been trading above the latter’s US$4.50 per share offer. Dynegy shares closed at US$5.10 Thursday evening.

One Dynegy investor said he believes blackstone has cut a sweet deal for itself and is stealing the company by paying a lower valuation. He said he foresees a bidding war erupting for Dynegy, leading to blackstone ultimately upping its bid.

prior to blackstone’s buyout offer, Dynegy was trading at US$2.60 and if its growth prospects were strong, it would have been reflected in the stock price, one of the sources familiar with the situation said.

While an interloper cannot be ruled out, the sources familiar and industry sources said other potential buyers had plenty of opportunity in the past to buy Dynegy. This news service previously reported that Dynegy has been shopped to both strategic and private equity players by investment bankers on numerous occasions.

Dynegy’s old coal plants are not a highly valued commodity in the marketplace, the second source familiar said. On top of that, a highly levered balance sheet has added to the company’s woes, he said.

Furthermore, natural gas prices, which set power prices, continue to be sluggish, the first source said. In addition, the economic outlook is not robust, he added.

In July, blackstone announced it was buying Dynegy in an all-cash transaction valued at approximately US$4.70bn, including debt, and simultaneously selling 3.9gW of natural gas plants to NRg for US$1.36bn.

NRg initiated conversations with Dynegy and blackstone in the late spring, the first source said, noting that additional details will be available in the preliminary proxy to be filed early next week.

A second Dynegy investor and one industry banker said they doubted if another bid will emerge, but said another private equity firm could make the math work with NRg.

“Dynegy is already highly levered and another financial sponsor would increase the enterprise value by a very small amount that would translate into a pretty big bump in the equity price,” the investor said.

While the 40-day go-shop period may see other private equity firms sign confidentiality agreements, it is unlikely that any other buyer will trump’s blackstone’s offer, the first source familiar said. The private equity firm retains the right to match any competing offers.

Tpg and kkR - rumored to be bidders - are unlikely to bid for Dynegy as they are still grappling with the challenges associated with their buyout of Energy Future Holdings, formerly TXU, with goldman Sachs Capital partners in 2007, the first source and one industry banker said.

“people I talked to treat it as a fait accompli,” an industry attorney familiar with Dynegy said.

14

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Monthly M&A Insider

target: potash Corporation of Saskatchewan Inc Announced: 18-Aug-10

Bidder: bHp billiton Ltd Deal value: US$41.91bn

seller: - Deal nature: Acquisition, Cross-border, public

stRuCtuRE• Unsolicited Tender Offer: bHp billiton Limited (bHp),

a Victoria corporation, announced its intention to commence a tender offer to acquire potash Corporation of Saskatchewan Inc. (pOT), a Canada corporation, after potast rejected bHp’s proposal.

• potash, a Canada-based company headquartered in Saskatoon, Saskatchewan, is the world’s largest integrated fertilizer and related industrial and feed products company.

• bHp billiton, an Australia-based company headquartered in Melbourne, Victoria, is the world’s largest diversified natural resources company.

tERMs• US$130.00 per pOT share.

• The offer provides a discount of 9.2% based on pOT’s closing share price on 17-Aug-10 of US$143.17.

• The offer provides a premium of 15.9% based on pOT’s closing share price of US$112.15 on 16-Aug-10, one day prior to the disclosure of bHp’s offer.

• The implied equity value of the transaction is approximately US$38.56bn.

FINANCINg• The Offer is not subject to any financing condition.

bHp estimates the total amount of funds required to consummate the Offer is approximately US$43.00bn (including funds required to repay or refinance certain existing pOT indebtedness if necessary).

• bHp has arranged a new multi-currency term and revolving facility agreement entered into for the purpose, among other things, of meeting the funding requirements of the transaction. The terms of the facility will include various representations and warranties, affirmative and negative covenants, and events of default customary for credit facilities of this type.

• The acquisition financing facility will preserve bHp’s financial flexibility. bHp remains committed to maintaining a solid A credit rating and a progressive dividend policy.

RAtIONALE• The acquisition will accelerate bHp’s entry into the

fertilizer industry and is consistent with bHp’s strategy of becoming a leading global miner of potash. pOT’s potash mining operations are a natural fit with bHp’s greenfield land holdings in Saskatchewan, Canada. Furthermore, bHp believes that the proposed acquisition will be earnings per share accretive in the second full fiscal year following consolidation.

CONDItIONs • CA (Canada)

• ICA (Canada)

• HSR (USA)

• CFIUS (USA)

• CADE (brazil)

• Minimum tender of more than 50.00% of pOT shares outstanding required

• Termination of recently-adopted pOT shareholder rights plan

POst DEAL DEtAIL• bHp plans to maintain current levels of employment at

pOT’s Saskatchewan and New brunswick operations for the foreseeable future. bHp also intends to identify and propose a Canadian nominee to stand for election to the bHp board.

DEAL OF THE MONTH


NORTH

AMERICA

DEAL OF THE MONTH

Advisors

target/seller Bidder

Financial goldman Sachs; bank of America Merrill Lynch; RbC Capital Markets

Financial JpMorgan; bNp paribas; Royal bank of Scotland group; TD Securities; barclays Capital; Santander global banking and Markets

Legal Skadden Arps Slate Meagher & Flom (Advising goldman Sachs, bank of America Merrill Lynch, RbC Capital Markets); Stikeman Elliott; Jones Day

Legal Slaughter and May; Cleary gottlieb Steen & Hamilton; blake, Cassels & graydon


25-Aug-10 potash Corporation: Royal bank of Canada thought to be advising counterbidder – market report

25-Aug-10 potash Corporation: Rio Tinto not interested; bid increase may trigger vote by bHp billiton's own shareholders – reports

16

NORTH

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Monthly M&A Insider

tOP 15 NORtH AMERICAN ANNOuNCED DEALs FOR YtD 31 August 2010 Announced status target company sector Bidder company seller company Exit multiples (x) Bid premia


(us$m)Revenue EBItDA P/E

18-Aug-10 p potash Corporation of Saskatchewan Inc


bHp billiton Ltd 10.5 27.9 40 -9.2% 41,908

22-Apr-10 p Qwest Communications International Inc

TMT CenturyLink 1.8 5.2 15.9 15.0% 22,153

08-Mar-10 C American Life Insurance Company

Financial Services

MetLife American International group

n/a n/a - 15,544

25-Feb-10 p Coca-Cola Enterprises Inc (North American operations)

Consumer The Coca-Cola Company

Coca-Cola Enterprises

- 12,280

21-Feb-10 C Smith International Inc Energy, Mining & Utilities

Schlumberger Limited

1.5 12.7 67.4 18.1% 12,198

19-Jan-10 C The Williams Companies Inc (certain gas pipeline and domestic midstream businesses)


Williams partners The Williams Companies

- 11,750

11-Feb-10 p Allegheny Energy Inc Energy, Mining & Utilities

FirstEnergy Corp 2.6 7.5 12.0 31.6% 8,960

09-Mar-10 p Merial Limited; and Intervet/Schering-plough Animal Health

pharma, Medical & biotech

Merial-Intervet Merck & Co; and Sanofi-Aventis SA

- 8,250

28-Apr-10 p E.ON US LLC Energy, Mining & Utilities

ppL Corporation E.ON Ag - 7,625

11-Mar-10 C Devon Energy Corporation (Assets in the deepwater gulf of Mexico, brazil and Azerbaijan)


bp plc Devon Energy Corporation

- 7,000

11-Feb-10 p Airgas Inc Industrials & Chemicals

Air products & Chemicals

1.8 10.8 27.1 3.6% 6,834

28-Feb-10 C Millipore Corporation pharma, Medical & biotech

Merck kgaA 4.1 16.3 34.0 13.3% 6,760

31-Mar-10 p general growth properties Inc (65.00% stake)

Real Estate brookfield Asset Management; Fairholme Capital Management LLC; and pershing Square Capital Management

n/a n/a [Loss] -7.5% 6,550

19-Aug-10 p McAfee Inc TMT Intel Corporation 3.4 16.5 44.0 60.4% 6,511

14-Jun-10 C QEp Resources Inc Energy, Mining & Utilities

Questar Corporation (Shareholders)

Questar Corporation

3.8 6.6 29.9 - 6,438


TOp DEALS & EXpECTED DEALS

17

NORTH

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Monthly M&A Insider


tOP 5 NORtH AMERICAN ANNOuNCED DEALs OF tHE MONtH (August 2010) Announced status target company sector Bidder company seller company Exit multiples (x) Bid premia

1-day before

Deal value

(us$m)Revenue EBItDA P/E

18-Aug-10 p potash Corporation of Saskatchewan Inc


bHp billiton Ltd 10.5 27.9 40.0 -9.2% 41,908

19-Aug-10 p McAfee Inc TMT Intel Corporation 3.4 16.5 44.0 60.4% 6,511

02-Aug-10 p Red back Mining Inc (90.60% Stake)


kinross gold Corporation

21.3 44.3 61.7 17.2% 6,143

17-Aug-10 p pactiv Corporation Industrials & Chemicals

Reynolds group Holdings Limited

1.8 7.7 13.7 7.5% 5,904

13-Aug-10 p Dynegy Inc Energy, Mining & Utilities

blackstone group Holdings LLC

2.0 6.0 [Loss] 61.9% 4,848


18

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 Novell TMT Elliott Associates

(T) JpMorgan 2,084 Elliott Associates Lp (together with funds under common management), a significant institutional stockholder of Novell, offered to purchase the entire company for US$5.75 per share in cash, which implies an enterprise value net of cash of US$1.00bn. The firm sent a letter to the board of Directors of the Company explaining its offer.

Expected Deal Dollar Thrifty Automotive group


Avis budget group

(b) Citigroup 1,281 Avis budget group would like to make a substantially higher offer to acquire Dollar Thrifty. Dollar Thrifty had recently signed a definitive agreement to be acquired by Hertz for approximately US$41.00 per share.

Expected Deal playboy Enterprise Media The Hefner Family

187 playboy Enterprises, Inc. (pEI) announced that its board of directors has formed a special committee consisting of Sol Rosenthal and Shing Tao to evaluate and determine the company's response to the proposal made by Hugh Hefner on July 9, 2010 to acquire all of the outstanding shares of Class A and Class b common stock of pEI not currently owned by him for US$5.50 per share in cash.

Expected Deal California pizza kitchen

Leisure Undisclosed bidder

(b) Moelis & Company

439 California pizza kitchen (CpkI) announced that its board of Directors has authorized management to consider a wide range of financial and strategic alternatives to enhance shareholder value. The Company has engaged Moelis & Company, a global investment bank, to be its exclusive financial advisor in this review. California pizza kitchen, a US-based company headquartered in LA, CA, is a casual dining restaurant chain with a particular focus on the pizza segment.

Expected Deal Mediacom Communications Corporation

TMT Media's founder, Chairman and CEO, Rocco b. Commisso

(b) bank of American Merrill Lynch, (b) J.p. Morgan Securities, (T) barclays Capital

475 Mediacom Communications Corporation's board of Directors received a non-binding proposal from Mediacom’s founder, Chairman and Chief Executive Officer, Rocco b. Commisso, for a going private transaction. The proposal contemplates the acquisition of all of the Class A and Class b shares of Mediacom common stock not already beneficially owned by Commisso at a price of US$6.00 per share in cash.

Expected Deal galleon Energy Energy, Mining & Utilities

Undisclosed bidder

(T) Cormark Securities, gMp Securities, Macquarie Capital Markets Canada

410 galleon Energy’s financial advisors are already talking with potential buyers. galleon announced it had retained gMp Securities, Cormark and Macquarie Capital to review strategic alternatives, which will examine a number of options, including an outright sale or disposal of a material portion of its assets.

Expected deals are based on confirmed announcements by companies involved.

PIPELINE OF NORtH AMERICAN ExPECtED DEALs


19

NORTH

AMERICA

Monthly M&A Insider

LEAgUE TAbLES

VALUEYtD

31-Aug-10House Value

(us$m)Deal count


2 barclays Capital 162,804 65

3 bank of America Merrill Lynch 148,300 86

4 JpMorgan 147,871 76



7 Deutsche bank 110,150 63


9 Lazard 74,933 62

10 UbS Investment bank 72,177 70

11 RbC Capital Markets 67,506 52

12 TD Securities 52,726 36

13 Royal bank of Scotland group 44,951 8

14 Santander global banking and Markets 44,448 3

15 perella Weinberg partners 42,993 14

16 Evercore partners 42,500 15

17 bNp paribas 42,048 4

18 blackstone group Holdings 35,742 14

19 Tudor, pickering, Holt & Co 26,627 17

20 greenhill & Co 25,628 19Source: mergermarket

VOLUME

The financial advisor league tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals. The tables cover all sectors andare based on the geography of either the target, bidder or seller being US or Canadian-based.

YtD 31-Aug-10

House Value (us$m)

Deal count



3 bank of America Merrill Lynch 148,300 86


5 JpMorgan 147,871 76

6 UbS Investment bank 72,177 70

7 barclays Capital 162,804 65

8 Deutsche bank 110,150 63

9 Lazard 74,933 62


11 RbC Capital Markets 67,506 52

12 Jefferies & Company 18,465 49


14 Houlihan Lokey 8,535 43

15 TD Securities 52,726 36

16 kpMg 5,144 32

17 Macquarie group Limited 8,020 28

18 Loln International 836 27

19 CIbC World Markets 12,943 25

20 Harris Williams & Co 530 25Source: mergermarket

tOP 20 FINANCIAL ADVIsORs – NORtH AMERICA

VALUEYtD


(us$m)Deal count


2 Simpson Thacher & bartlett 155,751 81

3 Cleary gottlieb Steen & Hamilton 143,407 47

4 Latham & Watkins 114,303 107

5 Sullivan & Cromwell 111,565 65

6 blake, Cassels & graydon 103,810 60

7 Slaughter and May 93,696 19

8 Davis polk & Wardwell 92,298 52

9 Weil gotshal & Manges 90,675 75

10 Wachtell, Lipton, Rosen & katz 86,327 36

11 Debevoise & plimpton 81,217 29

12 Cravath Swaine & Moore 78,789 32

13 Dewey & Leboeuf 77,887 62

14 Jones Day 74,391 107

15 Stikeman Elliott 67,907 55

16 Shearman & Sterling 64,864 49

17 baker botts 47,752 26

18 Herbert Smith/gleiss Lutz/Stibbe 46,142 20

19 Fried Frank Harris Shriver & Jacobson 45,792 31

20 gibson Dunn & Crutcher 43,471 61Source: mergermarket

VOLUME

The legal advisor league tables by value and volume have been run from 1 January 2010 to 31 August 2010 and lude lapsed and withdrawn deals. The tables cover all sectors andare based on the geography of either the target, bidder or seller being US or Canadian-based.

YtD 31-Aug-10

House Value (us$m)

Deal count


2 Jones Day 74,391 107

3 kirkland & Ellis 26,313 106

4 DLA piper 7,250 95


6 Simpson Thacher & bartlett 155,751 81

7 Weil gotshal & Manges 90,675 75


9 Dewey & Leboeuf 77,887 62

10 gibson Dunn & Crutcher 43,471 61

11 blake, Cassels & graydon 103,810 60

12 k&L gates 15,239 58





17 Morgan Lewis & bockius 9,794 47

18 Osler, Hoskin & Harcourt 33,589 44

19 O'Melveny & Myers 19,427 43

20 Mayer brown 14,770 41Source: mergermarket

tOP 20 LEgAL ADVIsORs – NORtH AMERICA

20

NORTH

AMERICA

Monthly M&A Insider

LEAgUE TAbLES

VALUE VOLUME

The private equity buyout activity tables by value and volume are based on private equity firms advising the bidder on buyout deals where the dominant geography of the target company is US or Canadian-based. The tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals.

tOP 5 PRIVAtE EquItY FIRMs BY NORtH AMERICAN BuYOuts

VALUE

YtD 31-Aug-10

House Value (us$m)

Deal count

1 kohlberg kravis Roberts & Co 4,700 1

2 Thomas H Lee partners 4,500 2

3 Cerberus Capital Management 4,046 3

4= Hellman & Friedman 3,525 2

4= JMI Equity 3,525 2Source: mergermarket

VOLUME

The private equity exit activity tables by value and volume are based on private equity firms advising the vendor on exit deals where the dominant geography of the target company is US or Canadian-based. The tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals.

YtD 31-Aug-10

House Value (us$m)

Deal count

1 Highland Capital partners 471 7

2 battery Ventures 860 5

3 Mayfield Fund 294 5

4 Foundation Capital 0 5

5 A M pappas & Associates 713 4Source: mergermarket

tOP 5 PRIVAtE EquItY FIRMs BY NORtH AMERICAN ExIts

YtD 31-Aug-10

House Value (us$m)

Deal count

1 blackstone group Holdings 10,143 4

2 Silver Lake partners 6,259 4


4 Centerbridge partners 3,925 3

5 The Carlyle group 3,772 4Source: mergermarket

YtD 31-Aug-10

House Value (us$m)

Deal count

1 Tpg Capital 3,249 7

2 HIg Capital 149 6


4 gS Capital partners 2,769 5

5 Ontario Teachers pension plan 1,023 5Source: mergermarket

21

NORTH

AMERICA

Monthly M&A Insider

TREND gRApHS

NORtH AMERICAN M&A quARtERLY tREND

0

100,000

200,000

300,000

400,000

500,000

600,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

200

400

600

800

1,000

1,200

1,400

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

of d

eals

NORtH AMERICAN M&A quARtERLY MID-MARkEt tREND

VALUE VOLUME

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

100

200

300

400

500

600

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals


VALUE VOLUME

22

NORTH

AMERICA

Monthly M&A Insider

TREND gRApHS

NORtH AMERICAN M&A sECtOR BREAkDOwN YtD 2010

VALUE VOLUME

29.9%

14.3%

7.2%

9.0%

8.3%

14.0%

0.8%1.6%

0.1%0.6%

10.8%

1.9%

1.4%


Financial Services

Business Services

Consumer


TMT

Leisure

Transportation


Construction

Agriculture

Real Estate

Defence

14.2%

13.7%

11.9%

12.1%

10.0%

8.7%

3.4%

1.5%

1.0%

1.0%

19.0%

0.5%

3.1%Industrials & Chemicals

Financial Services

Business Services

Consumer


TMT

Leisure

Transportation


Construction

Agriculture

Real Estate

Defence

NORtH AMERICAN M&A quARtERLY PRIVAtE EquItY tREND

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

225,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

North American buyouts

North American exits

0

25

50

75

100

125

150

175

200

225

250

275

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

North American buyouts

North American exits

VALUE VOLUME

23

NORTH

AMERICA

Monthly M&A Insider

TREND gRApHS

NORtH AMERICAN M&A DEAL sIzE BREAkDOwN

VALUE VOLUME

0

100

200

300

400

500

600

700

800

900

1000

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> US$501m

US$251m-US$500m

US$101m-US$250m

US$15m-US$100m

US$5m-US$14.9m

Valu

e (U

S$bn

)

0

500

1,000

1,500

2,000

2,500

3,000

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

Num

ber

of d

eals

> US$501m

US$251m-US$500m

US$101m-US$250m

US$15m-US$100m

US$5m-US$14.9m

Value not disclosed

ASIA-PAcIfIc

A mergermArket m&A report on


ASIA-pAcIfIc

Under the plan announced by the company, the enterprise turnaround Initiative corporation of Japan (etIc) has decided to inject a total of JpY350bn to hold the entire stake in Japan Airlines group. Due to the licensing of airline operations, Japan Airlines International, a former subsidiary of JAL, will become the surviving entity of the whole group; while JAL and its financial arm, JAL capital, are scheduled to be merged in the future. the administrator will be allowed, upon the court approval, to issue additional shares to a third party, but no decision has been made yet as to who will be the new sponsor for the company. the etIc is a semi-government agency with funding from both the government and private-sector financial institutions, which aims to restructure debt-laden companies within three years.

In the meantime, Japan Airlines is undertaking the restructuring of its business operations as well, including layoffs and termination of unprofitable domestic and international routes, to restore the profitability in a hope to refinance the debt by next year. However, the implementation of the plan also bears additional cost. the plan stipulates a personnel cut of 33.0% from 48,714 to 32,600 by the end of this fiscal year, but the company will be required to pay additional compensation. the termination of long international routes will be implemented along with the introduction of mid-size planes to meet the increasing demand of internal Asian travel, which will also add short-term cost. Although the cash injection by the etIc will mark the new era for Japan Airlines, the future of Japan Airlines still remains uncertain.

Vedanta Resources entering the Energy sector on 16 August 2010, Vedanta resources plc, the Uk-listed Indian metals and mining company controlled by billionaire Anil Agarwal, announced its proposal to acquire a 51.00%-60.00% stake in cairn India Limited, the listed Indian oil and gas company, from cairn energy plc, the listed Uk-based oil and gas company, for a cash consideration of between US$8.50bn-US$9.60bn.

the proposed acquisition will significantly enhance Vedanta resources’ position as a natural resources leader in India; while it will allow cairn energy to add and realise value for its shareholders. However, there are a various concerns which may constitute some barriers to the deal.

Under the proposal, Vedanta resources’ subsidiary Sesa goa, the Indian iron ore producer, will make a mandatory open offer to acquire a maximum of 20.00% of cairn India diluted shares at an offer price of Inr355 (US$7.60) per cairn India share, which is Inr50 lower than the sale share offer to cairn energy. Depending on the result of the open offer, Vedanta resources will acquire more than 40.00% of cairn India directly at an offer price of Inr405 (US$8.70) per cairn India share, which is Inr50 (US$1.10) more than the price offered in the mandatory offer. this additional cost is meant for the non-compete arrangement between cairn and Vedanta, under which cairn energy has agreed to stay away from oil and gas exploration in India, pakistan, Sri Lanka and Bhutan. However, questions have arisen regarding the price differential. the pricing of Vedanta’s open offer for cairn India has come under fire from the minority shareholders of cairn India as it seems to be unfair and a show a disregard for minorities. furthermore, investors also criticised that there is no offer of a control premium and that constitutes the lack of a ‘fair value’ price.

NEw stARt foR JApAN AIRlINEs

formerLY A mAJor LISteD compAnY AnD JApAneSe fLAg cArrIer, JApAn AIrLIneS (JAL), wHo fILeD for BAnkrUptcY In JAnUArY 2010, After montHS of negotIAtIon tHe BAnkS InVoLVeD HAVe AgreeD to renoUnce 87.50% of tHe compAnY DeBt AccorDIng to newS reportS, AnD ItS ADmInIStrAtor ApproVeD tHe reStrUctUrIng pLAn on 31 AUgUSt.

25

ASIA-PAcIfIc


ASIA-pAcIfIc

Besides, there is an issue regarding Vedanta resources’ experience in oil and gas industry. cairn India is a company principally engaged in oil and gas, while Vedanta resources is a company principally engaged in metals and mining. Vedanta resources has no track record in energy and no previous experience in oil and gas. the announcement has surprised investors in respect with Vedanta resources’ potential strategic shift from metals and mining into oil and gas, and it raises the question of whether such an inexperienced company should takeover such a crucial energy asset.

cairn India currently has interests in 10 blocks in India and one in Sri Lanka. It has three in production, including the mangala field in rajasthan, which began production last year, and is the biggest onshore energy resource discovered in the past two decades in India.

ASIA-PAcIfIc


xxtarget: the Sumitomo trust & Banking co Ltd Announced: 24-Aug-10

Bidder: chuo mitsui trust Holdings, Inc Deal value: US$9.27bn

seller: Deal nature: recommended

• chuo mitsui trust Holdings Inc, the Japan-listed trust and banking company, and the Sumitomo trust & Banking co Ltd, its domestic listed trust banking company, have agreed to merge.

stRUCtURE• the transaction is in the form of a share swap merger.

• the surviving entity will be renamed as Sumitomo mitsui trust Holdings, Inc.

tERMs• 1.49 chuo mitsui trust Holdings shares per Sumitomo

trust and Banking share.

• the implied offer price of JpY464.88, using JpY312.00, the closing price of chuo mitsui trust Holdings on 24-Aug-10.

• It is par to JpY468, the closing price of Sumitomo trust and Banking on 24-Aug-10, the last trading day before the announcement, (the announcement was made after market closed).

• It represents a discount of 2.34% upon the closing price of Sumitomo trust and Banking on 6-nov-09, the last trading day before the board discussion announcement.

• the consideration values Sumitomo trust and Banking at JpY778.73bn. (US$9.20bn, using the closing exchange rate of US$1: JpY84.58 on 24-Aug-10).

fINANCING• chuo mitsui trust Holdings will issue 2,495,111,627 new

shares to eligible shareholders in Sumitomo trust and Banking, representing a 60.10% dilution to its existing share capital.

sIGNIfICANt sHAREHolDERs• the resolution and collection corporation owns 30.02%

of chuo mitsui trust Holding Inc.

CoNDItoNs• Approval from the Sumitomo trust & Banking co Ltd

(minimum two thirds vote cast required).

• Approval from chuo mitsui trust Holdings Inc (minimum two thirds vote cast required).

• Approval from financial Services Agency, Japan.

• Approval from Japan fair trade commission.

• Approval from fair trade commission, USA.

• Approval from ministry of commerce, prc.

• Approval from Securities and exchange commission, USA.

• Approval from european commission.

DeAL of tHe montH

27

ASIA-PAcIfIc

Monthly M&A Insider

DeAL of tHe montH


15-Apr-10 chuo mitsui/Sumitomo trust likely to establish share swap ratio by autumn; egm in December

26-Aug-10 Sumitomo trust/chuo mitsui (yet to complete competition filings)

timetable and expected events

offer timetable Date Completed Notes

Merger Agreement 24-Aug-10 Y from company, Board meeting for the approval of the merger document

Effective Date 01-Apr-11 from company; effective date for the merger

Settlement Date reference issue of 2,495,111,627 new shares to the Sumitomo trust & Banking co Ltd shareholders

Advisers


financial UBS Investment Bank; Daiwa Securities group financial Jpmorgan

legal Sullivan & cromwell; mori Hamada & matsumoto; Advising UBS Investment Bank: Shearman & Sterling

legal nagashima ohno & tsunematsu

pR - pR -

Exit multiples – Y/E 31-Dec-09 premium analysis

Multiples Value (JpYm) offer price per share (JpY) 464.88

Revenue n/a n/a 1 day before 468

EBItDA n/a n/a 1 month before 455

EBIt n/a n/a 1 day after 467

Earnings 15.4x 53,180 pre-rumour n/a


ASIA-PAcIfIc

top 15 AsIA-pACIfIC ANNoUNCED DEAls foR YtD 31 AUGUst 2010Announced status target company sector Bidder company seller company Exit multiples (x) Bid premia


(Us$m)Revenue EBItDA p/E

01-mar-10 L American International Assurance company Limited

financial Services

prudential plc American International group Inc

n/a n/a 20.2 - 35,500

24-Aug-10 p the Sumitomo trust & Banking co Ltd

financial Services

chuo mitsui trust Holdings, Inc

n/a n/a 17.1 -0.7% 9,267

16-Aug-10 p cairn India Limited (60.00% stake)

energy, mining & Utilities

Vedanta resources plc

33.0 64.3 61.7 - 9,177

30-mar-10 L AXA Asia pacific Holdings (Asian businesses)

financial Services

AXA SA AXA Asia pacific Holdings Limited

n/a n/a 24.7 - 8,645

04-may-10 c Lihir gold Limited energy, mining & Utilities

newcrest mining Limited

8.5 19.9 54.2 9.5% 8,286

10-mar-10 p Shanghai pudong Development Bank (20.00% stake)

financial Services

china mobile group guangdong co Ltd

n/a n/a 11.1 -13.1% 5,831

29-Jul-10 p Sanyo electric co Ltd (49.95% stake)

Industrials & chemicals

panasonic corporation

0.7 11.0 (loss) -7.4% 4,839

29-Jul-10 p panasonic electric works Ltd (49.00% stake)


panasonic corporation

0.6 9.9 103.2 -1.2% 4,698

31-Aug-10 p Japan Airlines corp transport enterprise turnaround Initiative corporation of Japan

0.2 6.1 (loss) 4,165

25-Jan-10 c Jupiter telecommunications co Ltd (37.80% stake)

tmt kDDI corporation Liberty global Inc

3.6 8.3 32.6 64.5% 4,014

21-may-10 p piramal Healthcare Solutions business

pharma, medical & Biotech

Abbott Laboratories piramal Healthcare Limited

8.3 - 3,720

30-mar-10 L AXA Asia pacific Holdings Limited

financial Services

national Australia Bank Limited

n/a n/a 21.8 1.3% 3,579

30-Aug-10 p Daewoo International corporation (68.15% stake)

Business Services

poSco kAmco 0.5 30.4 37.9 53.5% 3,547

22-mar-10 c Arrow energy Limited energy, mining & Utilities

royal Dutch Shell; and petrochina

36.9 7.4 10.5 -11.2% 3,352

18-may-10 c Denway motors Limited (62.10% stake)

Automotive guangzhou Automobile group co Ltd

62.1 (loss) 23.6 53.0% 3,293

c = completed; p = pending; L = Lapsed Source: mergermarket

top DeALS & eXpecteD DeALS

top 5 AsIA-pACIfIC ANNoUNCED DEAls of tHE MoNtH (AUGUst 2010)Announced status target company sector Bidder company seller company Exit multiples (x) Bid premia


(Us$m)Revenue EBItDA p/E

24-Aug-10 p the Sumitomo trust & Banking co Ltd

financial Services

chuo mitsui trust Holdings, Inc

n/a n/a 17.1 -0.7% 9,267

16-Aug-10 p cairn India Limited (60.00% stake)


Vedanta resources plc 33.0 64.3 61.7 - 9,177

31-Aug-10 p Japan Airlines corp transport enterprise turnaround Initiative corporation of Japan

0.2 6.1 (loss) 4,165

30-Aug-10 p Daewoo International corporation (68.15% stake)

Business Services

poSco kAmco 0.5 30.4 37.9 53.5% 3,547

27-Aug-10 p Intoll group transport canada pension plan Investment Board

95.7 4.1% 2,922

c = completed; p = pending; L = Lapsed Source: mergermarket

29

ASIA-PAcIfIc

Monthly M&A Insider

pIpElINE of AsIA-pACIfIC ExpECtED DEAlssituation target company sector potential bidder

companyfinancial adviser to bidder (B); target (t); seller (s)

seller company Market cap/ est. value (Us$m)

Comments

expected Deal

transurban group

construction canada pension plan Investment Board (cppIB); and ontario teachers’ pension plan (otpp)

Lazard (t); UBS Investment Bank (t); goldman Sachs (B); Jpmorgan (B)

6,500 transurban group in november received a conditional and non-binding joint takeover proposal from cppIB and otpp. the Board then evaluated the proposal and rejected it on the original terms. the future fund Board of guardians has subsequently considered supporting the proposal by cppIB and otpp. transurban continues to insist a bona fide proposal is needed before talks can proceed. In may 2010, cppIB and otpp raised its offer from AUD5.25 per transurban share to AUD5.57 per share. However, the revised takeover proposal was again rejected bytransurban, as transurban considered that their offer was still too low.

expected Deal

wai chun mining Industry group co. Ltd.

consumer Undisclosed bidder

404 wai chun mining has signed a memorandum of understanding in relation to the possible issue of new shares. this may lead to a change in control of the company.

expected Deal

Boom Logistics

transport Archer capital and mcAleese group

200 Boom Logistics, the Australian-listed crane hire business, has received a takeover offer from Archer capital and mcAleese group. Boom Logistics has received two conditional proposals from Archer in April. the company rejected the first bid outright due to its conditionality. Boom Logistics has not yet formalised its response to the second offer of AUD0.52 per Boom Logistics share.

expected Deal

redflex Holdings Limited

tmt macquarie group Limited

206 redflex Holdings Limited received an indicative, non-binding and confidential proposal to acquire all of the issued capital of redflex by scheme of arrangement from a wholly owned subsidiary of macquarie group Limited at a price of AUD2.50 per share.

expected Deal

SgIS Songshan co Ltd


guangdong Hengjian Investment Holding co Ltd

932 SgIS Songshan will raise up to cnY2.5bn from private placement of 570m new shares. Heng Jian Investment will acquire up to 341.69m new shares in the company for a maximum of cnY1.5bn (US$220.6m) and become the second largest shareholder.

expected Deal

Indophil resources nL


Undisclosed bidder

339 After china’s Zijin withdrew an offer in July, Indophil is still targeted as a takeover candidate. Indophil reportedly confirmed talks over a potential corporate transaction.

expected deals based on confirmed announcements by companies involved

top DeALS & eXpecteD DeALS

30

ASIA-PAcIfIc

Monthly M&A Insider

LeAgUe tABLeS

VALUeYtD


(Us$m)Deal count

1 Jpmorgan 86,651 27


3 Bank of America merrill Lynch 76,177 23

4 Barclays capital 62,871 13

5 Bnp paribas 58,166 13

6 royal Bank of Scotland group 52,532 10

7 rBc capital markets 45,541 7

8 morgan Stanley 45,419 28

9 Santander global Banking and markets 42,967 2

10 tD Securities 42,187 2


12 Deutsche Bank 32,630 29

13 macquarie group 28,236 22

14 credit Suisse 28,144 27

15 HSBc Bank 27,471 15

16 Standard chartered 26,256 11

17 nomura Holdings 19,496 13

18 rothschild 16,362 20

19 china International capital corporation 16,180 12

20 Lazard 14,587 8Source: mergermarket

VoLUme

the financial adviser league tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being Asia-pacific-based, excluding Japan.

YtD 31-Aug-10

House Value (Us$m)

Deal count


2 Deloitte 9,367 36

3 ernst & Young 8,561 36


5 kpmg 7,845 31



8 Jpmorgan 86,651 27

9 credit Suisse 28,144 27

10 pricewaterhousecoopers 2,909 24


12 macquarie group 28,236 22


14 cImB group 12,443 19

15 HSBc Bank 27,471 15

16 citigroup 10,171 15

17 Barclays capital 62,871 13



20 china International capital corporation 16,180 12Source: mergermarket

top 20 fINANCIAl ADVIsERs – AsIA-pACIfIC ExCl JApAN

top 20 lEGAl ADVIsERs – AsIA-pACIfIC ExCl JApANVALUe

YtD 31-Aug-10

House Value (Us$m)

Deal count

1 Slaughter and may 85,588 13

2 cleary gottlieb Steen & Hamilton 77,858 5

3 Skadden Arps Slate meagher & flom 59,549 19

4 Stikeman elliott 53,606 8


6 Blake, cassels & graydon 48,740 6


8 norton rose 45,383 30

9 Jones Day 44,488 25

10 Simpson thacher & Bartlett 38,791 8

11 Sullivan & cromwell 38,427 6

12 cravath Swaine & moore 36,988 2

13 weil gotshal & manges 36,529 6

14 mallesons Stephen Jaques 33,088 41

15 Davis polk & wardwell 31,105 9

16 AZB & partners 28,834 46

17 freehills 28,389 44

18 Allens Arthur robinson 28,360 25

19 Linklaters 26,712 23

20 Allen & overy 18,953 19Source: mergermarket

VoLUme

the legal adviser league tables by value and volume have been run from 1 January 2010 to 31 August 2010 and include lapsed and withdrawn deals. the tables cover all sectors and are based on the geography of either the target, bidder or seller being Asia-pacific-based, excluding Japan.

YtD 31-Aug-10

House Value (Us$m)

Deal count


2 freehills 28,389 44

3 DLA piper 1,544 44

4 mallesons Stephen Jaques 33,088 41

5 Baker & mckenzie 14,386 37

6 minter ellison 10,658 37

7 wongpartnership 8,944 33


9 kim & chang 7,378 27

10 Jones Day 44,488 25

11 Allens Arthur robinson 28,360 25


13 Blake Dawson 11,833 23

14 Allen & gledhill 7,323 22

15 clayton Utz 6,804 22

16 freshfields Bruckhaus Deringer 6,604 22

17 Amarchand & mangaldas & Suresh A Shroff & co

6,106 22

18 clifford chance 4,179 20


20 Allen & overy 18,953 19Source: mergermarket

31

ASIA-PAcIfIc

Monthly M&A Insider

LeAgUe tABLeS

VALUe

YtD 31-Aug-10

House Value (Us$m)

Deal count


2 Jpmorgan 17,158 9

3 Daiwa Securities group 16,533 23





8 citigroup 5,467 5

9 ABeam m&A consulting corp fin 5,228 2


11 greenhill & co 3,510 3

12 Lazard 3,390 3

13 centerview partners 3,301 1

14 Sangyo Sosei Advisory 3,299 2

15 mizuho financial group 2,723 27Source: mergermarket

VoLUme

the financial adviser league tables by value and volume have been run from 1 January 2010 to 31 July 2010 and exclude lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being Japan-based.

YtD 31-Aug-10

House Value (Us$m)

Deal count


2 mizuho financial group 2,723 27

3 Daiwa Securities group 16,533 23


6 Sumitomo mitsui financial group 2,071 19

5 gcA Savvian corporation 1,503 12

7 pricewaterhousecoopers 1,021 11

8 Jpmorgan 17,158 9


10 kpmg 833 8

11 ernst & Young 609 6

12 citigroup 5,467 5



15 rothschild 633 4Source: mergermarket

top 15 fINANCIAl ADVIsERs – JApAN

VALUe

YtD 31-Aug-10

House Value (Us$m)

Deal count

1 mori Hamada & matsumoto 27,490 45

2 nagashima ohno & tsunematsu 23,513 26




6 nishimura & Asahi 7,517 21

7 Anderson mori & tomotsune 6,933 14


9 gibson Dunn & crutcher 5,131 3

10 kikkawa Law offices 4,774 2

11 morrison & foerster 4,333 11

12 Allen & overy 3,838 5

13 Dewey & LeBoeuf 3,666 2

14 freshfields Bruckhaus Deringer 3,526 5

15 Linklaters 3,449 6Source: mergermarket

VoLUme

the legal adviser league tables by value and volume have been run from 1 January 2010 to 31 July 2010 and include lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being Japan-based.

YtD 31-Aug-10

House Value (Us$m)

Deal count

1 mori Hamada & matsumoto 27,490 45

2 nagashima ohno & tsunematsu 23,513 26

3 nishimura & Asahi 7,517 21

4 Anderson mori & tomotsune 6,933 14

5 tmI Associates 2,115 12


7 morrison & foerster 4,333 11


9 Davis polk & wardwell 859 9






15 freshfields Bruckhaus Deringer 3,526 5Source: mergermarket

top 15 lEGAl ADVIsERs – JApAN

32

ASIA-PAcIfIc

Monthly M&A Insider

trenD grApHS

AsIA-pACIfIC M&A qUARtERlY tREND

VALUe VoLUme

0

50,000

100,000

150,000

200,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

100

200

300

400

500

600

700

800

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

AsIA-pACIfIC M&A qUARtERlY MID-MARkEt tREND

VALUe VoLUme

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

100

200

300

400

500

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

moving average trend line

33

ASIA-PAcIfIc

Monthly M&A Insider

trenD grApHS

AsIA-pACIfIC M&A sECtoR BREAkDowN YtD 2010

VALUe VoLUme

14.5%

9.8%

7.2%

19.7%20.5%

5.3%

3.8%

2.2%

5.5%

7.8%

1.2%2.5%


TMT

Consumer


Financial Services

Business Services


Construction

Real Estate

Transport

Leisure

Agriculture

20.1%

13.6%

11.7%

8.1%

9.2%

2.5%

11.3%

6.1%

5.1%

4.7%

4.6%2.9%


TMT

Consumer


Financial Services

Business Services


Construction

Real Estate

Transport

Leisure

Agriculture

AsIA-pACIfIC M&A qUARtERlY pRIVAtE EqUItY tREND

VALUe VoLUme

0

5,000

10,000

15,000

20,000

25,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

Asia-Pacificbuyouts

Asia-Pacificexits

0

20

40

60

80

100

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

Asia-Pacificbuyouts

Asia-Pacificexits

34

ASIA-PAcIfIc

Monthly M&A Insider

trenD grApHS

AsIA-pACIfIC M&A GEoGRApHIC BREAkDowN YtD 2010

VALUe VoLUme

China

Australia

Japan

South Korea

India

Hong Kong

Singapore

Malaysia

Indonesia

Taiwan

Other

19.0%

5.8%

5.7%

10.9%

3.2%

7.1%

4.8%

2.0%1.0%

21.9%

18.5%

27.2%

10.1%

10.4%

14.3%

15.5%

5.2%

5.3%

4.3%

3.6%

2.3%

1.8%

China

Australia

Japan

South Korea

India

Hong Kong

Singapore

Malaysia

Indonesia

Taiwan

Other

AsIA-pACIfIC M&A DEAl sIZE BREAkDowN

VALUe VoLUme

0

50

100

150

200

250

300

H2 2010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> US$501m

US$251m-US$500m

US$101m-US$250m

US$15m-US$100m

US$5m-US$14.9m

Valu

e (U

S$bn

)

0

300

600

900

1,200

1,500

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> US$501m

US$251m-US$500m

US$101m-US$250m

US$15m-US$100m

US$5m-US$14.9m

Value not disclosed

Num

ber

of d

eals


europe

A mergermArket m&A report on

eUrope

the Financial times reported that the Chelsea Football Club-supporting American will be receiving a total remuneration package of about £11.5m as Ceo of Barclays, down by about £6.7m from his current package as president of Barclays Capital; although his base salary will be up from £0.25m to £1.35m per annum. As expected, the revelation has been seized upon by Uk politicians who have instantly conveyed their populist objection to the size of Diamond’s pay packet, positioning it against the backdrop of wider difficulties in the Uk economy and the looming public spending cuts and redundancies.

However, a much harder challenge lies ahead for Barclays plc as the Uk parliamentary banking commission, led by Sir John Vickers, may recommend radical reforms to the banking system. the changes could force the splitting of investment banking operations from traditional depository banking businesses and if the Uk introduces such a regime, it would signal the end of the universal banking business model.

Barclays Capital (Barcap) has grown from a relatively mediocre european dealmaker to a global household name in the m&A industry under Diamond’s watch. Between 1 January to 31 August 2007, the m&A boom year, Barcap only managed to come in the top 70 of global financial advisers league tables, advising on only €8.50bn worth of deals. However, during the same period in 2009, when the bottom was falling out of the market, the firm was up to sixth place, advising on m&A deals totalling €98.40bn worldwide.

this trend has continued. Barcap has advised on €147.2bn worth of deals globally so far this year, maintaining their sixth place in the standings. the firm has secured mandates for the Anglo-Australian BHp Billiton’s €32.61bn hostile takeover offer for the Canadian potashCorp and the €16.66bn Qwest/CenturyLink merger. more importantly, however, Barcap was second only to goldman Sachs in north America for the same period, advising on €123.90bn worth of deals. this is arguably the biggest shake-up of Wall Street’s establishment by a London-headquartered bank.

Barclays plc’s shareholders must also have been thanking Diamond as Barcap alone made up 40.0% of the group’s total revenue in 2009; £11.60bn out of £29.10bn total - dwarfing its Uk retail bank’s revenue of £4.00bn. this could be considered to be an example of how the universal banking model does work: where the investment banking operation is propping up and cross-subsidising the traditional depository business as the latter struggles with an unfavourable trading environment.

Barcap’s rapid growth in m&A was due to the ‘cherry-picking’ of Lehman Brothers’ north American operations in 2008, a year after fortuitously losing out to the rBS-led consortium bid for control of ABn Amro. It also explains why the m&A practice is bigger in the US than europe.

Diamond’s recent experience of cherry picking may haunt him, if and when he has to make tough decisions for the business under the proposed Uk banking regulatory regime. As he plans his return to London from new York, he might have to start spending his spare time picking the winners within the Barclays business.

BoB DIAMonD, BArclAys cApItAl AnD the unIversAl BAnkIng MoDel

BArCLAYS pLC, tHe Uk BAnkIng groUp, HAS AnnoUnCeD tHAt BoB DIAmonD, tHe CUrrent HeAD oF BArCLAYS CApItAL, IS to SUCCeeD JoHn VArLeY AS tHe groUp’S Ceo; A moVe tHAt CoULD proVIDe A pLAtForm For FUrtHer InVeStment BAnkerS to tAke oVer tHe LeADerSHIp oF So-CALLeD UnIVerSAL BAnkS.

36

europe

Monthly M&A Insider

europe continues to see mega M&A deals in the energy, Mining & utilities sectorAugust 2010 confirmed that further mega-consolidations in the european energy, mining & Utilities sector are still occurring, following a strong July. the sector now made up 27.1% of total m&A deal value for europe in the year-to-date, €70.20bn out of €260.10bn in total. Strikingly, for August alone, the sector made up 66.0% of europe’s total deal value, booking €28.40bn.

the largest chunk of this number, €20.70bn, is the reverse takeover of gDF Suez energy International (gDF eI) by International power plc, the Uk power producer. gDF Suez SA, the target’s parent, is taking a 70.00% stake in International power through a capital increase in return for gDF eI assets it contributes. the deal is surely a significant breadwinner for morgan Stanley, Jpmorgan Cazenove, nomura, goldman Sachs, Bnp paribas, Blackstone, rothschild, and ondra partners this year.

Another high-profile deal in the sector is korea national oil Corporation’s (knoC) €2.28bn hostile takeover offer for the LSe-listed Dana petroleum plc. It is the first time that an Asian state-owned company has made a hostile offer for a foreign public company. Dana’s board is asking for more than £18.00 per share more than knoC is offering its shareholders. However, the Financial times has been reporting that an improved offer is not expected and knoC is likely to succeed in closing the deal at the current offer price as a significant number of Dana’s institutional investors are willing to accept the offer.

eUrope

37

europe

Monthly M&A Insider

target: gDF Suez energy International Announced: 10-Aug-10

Bidder: International power plc Deal value: €20.70bn

seller: gDF Suez SA Deal nature: Cross-border, public, reverse takeover

• gDF Suez SA has agreed to contribute its subsidiary, gDF Suez energy International, and other assets into International power plc (Ipr), in return for a 70.00% stake in the company, effected through a capital increase.

terMs:• Based on the total 1,523.3m shares currently outstanding

in Ipr, gDF Suez will be issued with 3,554.37m new Ipr shares, representing 70.00% of equity post capital increase, in return for the assets it contributes.

• Based on Ipr closing price of £380.00 on 9 August 2010, the assets contributed are valued at about £13.51bn.

• the assets’ net debt of £3.70bn will be carried over to Ipr’s balance sheet.

• the current Ipr shareholders will remain with 30% of the combined entity, and receive special dividend of 92 pence per share in cash. this will increase Ipr’s pro-forma net debt as at 30 June 2010 by about £1.40bn.

Assets contrIButeD:• gDF Suez energy International (eI);

• gDF Suez’s Uk assets including teeside, Shotton, Scotia and gDF Suez energy Uk;

• and gDF Suez’s turkish assets comprising Izgaz.

rAtIonAle:• Both gDF Suez eI and International power are

strategic fit;

• Both complement each other in terms of geographical presence, fuel mix, and power generation assets portfolio.

InDuceMent Fee:• Both parties have agreed a €60m break-up fee for

either side.

expecteD coMpletIon:• By the end of 2010 or early 2011.

post DeAl DetAIls:• the new Ipr will be listed at London Stock exchange,

application to Uk Listing Authority has been made.

conDItIons:• Ipr shareholders’ approval;

• regulatory approvals;

• Consultation with gDF Suez employees.

DeAL oF tHe montH

38

europe

Monthly M&A Insider

DeAL oF tHe montH

exit multiples – y/e 31-Dec-09 premium analysis

Multiples value (€m) offer price per share (€) n/a

revenue - - 1 day before n/a

eBItDA 10.4x 1,996 1 month before n/a

eBIt 14.4x 1,435 1 day after n/a

earnings - - pre-rumour n/a

Advisers


Financial goldman SachsBnp paribasBlackstone group Holdingsrothchildondra partners

Financial morgan StanleyJpmorgan Cazenovenomura Holdings

legal Bredin pratLinklaters

legal Clifford Chance

pr Brunswick group pr Finsbury group

Mergermarket/dealreporter Intelligence

09-Aug-10 International power/gDF: Joint deal announcement expected tomorrow

05-Aug-10 International power/gDF undecided on ‘welcome bonus’ for merger

22-Jul-10 Ipr/gDF Suez: eU competition approval unlikely to raise major issues

19-Jul-10 International power: gDF Suez aiming to take stake over 50.00%

12-Feb-10 gDF Suez more likely to take two-step view on International power than full cash takeover in short term

39

europe

Monthly M&A Insider

top 15 europeAn AnnounceD DeAls ytD 31 August 2010Announced status target company sector Bidder company seller company exit multiples (x) Bid premia


(€m)revenue eBItDA p/e

10-Aug-10 p gDF Suez energy International


International power plc

gDF Suez SA 10.4 20,701

04-Jan-10 C Alcon Inc (52.00% Stake)


novartis Ag nestle SA 8.0 20.9 26.9 9.5% 18,247

30-Jun-10 p oJSC polyus gold energy, mining & Utilities

kazakhgold group Limited

9.8 22.8 35.0 5.4% 8,367

05-Jan-10 C nk russneft oAo energy, mining & Utilities

mikhail gutseriyev (private Investor)

en+ group Ltd 4,595

14-Jun-10 C JSC Uralkali (53.20% Stake)


kaliha Finance Limited; Aerellia Investments Limited; and Becounioco Holdings Limited

madura Holding Limited

10.5 21.7 37.9 21.4% 4,254

18-mar-10 C ratiopharm gmbH


teva pharmaceutical Industries Ltd

Vem Vermogensverwaltung gmbH

2.6 4,200

27-Jul-10 p tomkins plc Industrials & Chemicals

Canada pension plan Investment Board; and onex partners Lp

1.3 18.7 5.7% 3,672

08-Apr-10 p Iberia Lineas Aereas de espana SA

transportation British Airways plc 0.9 (loss) (loss) 0.9% 3,598

24-Jun-10 p AXA SA (Uk life and pensions businesses)

Financial Services

resolution Limited AXA SA n/a 20.4 0.9% 3,330

20-Jan-10 C Areva t&D SA Industrials & Chemicals

Schneider electric SA; and Alstom SA

AreVA SA 0.6 3,180

21-Jul-10 p SSL International plc

Consumer reckitt Benckiser plc 3.4 19.5 37.4 32.8% 3,046

24-Feb-10 C edenred SA Business Services

Accor SA (Shareholders)

Accor SA 3.7 9.2 2,937

22-Apr-10 C Arriva plc transportation Deutsche Bahn Ag 0.8 7.7 14.6 1.2% 2,819

23-Jun-10 p Cognis gmbH Industrials & Chemicals

BASF Se permira; gS Capital partners; and SV Life Sciences

0.9 7.5 28.0 2,408

20-Aug-10 p Dana petroleum plc


korea national oil Corporation

5.4 11.9 78.6 6.2% 2,269


top DeALS & eXpeCteD DeALS

top 5 europeAn AnnounceD DeAls oF the Month (August 2010)Announced status target company sector Bidder company seller company exit multiples (x) Bid premia


(€m)revenue eBItDA p/e

10-Aug-10 p gDF Suez energy International


International power plc

gDF Suez SA 10.4 20,701

20-Aug-10 p Dana petroleum plc energy, mining & Utilities

korea national oil Corporation

5.4 11.9 78.6 6.2% 2,269

09-Aug-10 p Bogazici elektrik Dagitim AS


Is-kaya Insaat Sanayi ve ticaret Limited Sirketi; and mmekA makine Ithalat pazarlama ve ticaret AS

republic of turkey prime ministry privatisation Administration (oIB)

2,261

06-Aug-10 p Worldpay Limited (80.01% Stake)

Business Services

Bain Capital LLC; and Advent International Corporation

royal Bank of Scotland group plc

2,041

04-Aug-10 p royal Bank of Scotland group (certain 318 branches)

Financial Services

Banco Santander SA royal Bank of Scotland group plc

n/a n/a 1,992


40

europe

Monthly M&A Insider

situation target company sector potential bidder company Financial adviser to bidder (B); target (t); seller (s)

seller company Market cap/est. value

(€m)

comments

expected deal

Bank millennium SA

Financial Services

Banco Santander SA Banco Comercial portugues SA

1,076 Bank millennium’s portuguese parent company Banco Commercial portugues (BCp) has received a preliminary approach from Spain’s Santander, according to a source at the polish-listed lender.

potential takeover target

UktV tmt BBC Worldwide Limited Virgin media Inc 420 BBC Worldwide may look to increase its 50.00% stake in UktV but is not considering taking full ownership of the company, according to a source close to the situation.


gascan - gases Combustiveis SA

Business Services

the riverside Company; and gALp energia SgpS SA

Banco millennium BCp Investimento (S)

explorer Investments SCr SA

100 gascan, the portuguese distributor of liquefied petroleum gas, is up for sale by portuguese private equity firm explorer, which mandated BCp and Cuatrecasas.


prva petoletka Industrials & Chemicals

Undisclosed bidder Serbian privatization Agency; and government of the republic of Serbia

62 the Serbian privatisation Agency (pA) has two separate interested parties in the upcoming auction of prva petoletka, the hydraulic and pneumatic components producer, a pA source told this news service. An Italian player is in the process of looking for a local bidder in order to form a consortium, he said. meanwhile another local bidder active in the sector has shown interest and is expected to bid.


Chemrec AB energy, mining & Utilities

Undisclosed bidder Vantagepoint Venture partners Lp; Volvo technology transfer AB; environmental technologies Fund; and nykomb Synergetics

24 Chemrec, a Swedish developer of liquor gasification technology to produce renewable engine fuels, is in due diligence process with two potential industrial investors, Chief executive max Jonsson said.Jonsson would not disclose details of the potential bidders but noted that they were companies with industrial capacity to build large-scale plants. He also said that pulp and mill players had shown interest in taking up a stake in the business. Chemrec’s largest shareholder, Vantage point Venture partners, is dealing directly with the strategic investors, he added.


Bio-Layer Industrials & Chemicals

thermo Fisher Scientific Inc; roche Holding Ltd; Life technologies Corp; merck & Co Inc; Abbott Laboratories; Beckman Coulter Inc; and Siemens Healthcare Diagnostics limited

transocean group (t)

Cm Capital Investments pty Ltd

18 Anteo, the Australian surface technology diagnostics company, could pursue a deal with a global in-vitro diagnostics company or bean manufacturer in the next three to six months, said Chief executive officer Dr geoff Cumming.


Banca marche (real estate assets)

real estate Fimit Sgr Banca ImI/Intesa Sanpaolo; BnL - gruppo Bnp paribas; reAg (t)

Banca marche SpA

- Banca delle marche, an Italian regional bank, is in talks to sell all of its real estate holdings to a group of property investors, said Chief executive massimo Bianconi. Fimit, the privately held Italian real estate fund, will manage the assets on behalf of the investors, said a source close to the situation. the number of investors and the number of shares is yet to be determined, according to the source, also adding that they could be Italian or foreigners.

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

pIpelIne oF europeAn expecteD DeAls

top DeALS & eXpeCteD DeALS

41

europe

Monthly M&A Insider

LeAgUe tABLeS

VALUeytD

31-Aug-10house value

(€m)Deal count

1 goldman Sachs 137,195 602 Jpmorgan 111,843 563 Credit Suisse 93,973 724 morgan Stanley 89,377 795 Bank of America merrill Lynch 80,831 326 Barclays Capital 68,417 317 Bnp paribas 67,512 308 Citigroup 67,340 429 rothschild 65,535 9610 rBC Capital markets 46,966 2011 Deutsche Bank 44,535 5412 royal Bank of Scotland group 43,227 1413 UBS Investment Bank 40,488 5214 Lazard 38,152 6715 Santander global Banking and markets 37,801 916 tD Securities 33,692 517 nomura Holdings 31,566 2818 Blackstone group Holdings 29,466 519 greenhill & Co 22,243 1020 HSBC Bank 20,883 24

Source: mergermarket

VoLUme

the financial adviser league tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being europe-based.

ytD 31-Aug-10

house value (€m)

Deal count


2 kpmg 9,950 84

3 pricewaterhouseCoopers 8,394 82


5 Deloitte 5,509 79


7 Lazard 38,152 67


9 Jpmorgan 111,843 56




13 ernst & Young 1,481 39

14 DC Advisory partners 4,387 37


16 Barclays Capital 68,417 31


18 grant thornton Corporate Finance 661 29


20 global m&A 181 26Source: mergermarket

top 20 FInAncIAl ADvIsers

VALUeytD

31-Aug-10house value

(€m)Deal count


2 Skadden Arps Slate meagher & Flom 86,615 34




6 Blake, Cassels & graydon 62,708 15

7 Simpson thacher & Bartlett 57,082 26

8 Cravath Swaine & moore 55,605 11

9 Allen & overy 52,791 109

10 Freshfields Bruckhaus Deringer 46,786 88


12 Clifford Chance 42,288 67

13 Jones Day 41,794 56

14 Weil gotshal & manges 41,776 42


16 Stikeman elliott 38,313 11




20 Bredin prat 28,765 21Source: mergermarket

VoLUme

the legal adviser league tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals. the tables cover all sectors andare based on the geography of either the target, bidder or seller being europe-based.

ytD 31-Aug-10

house value (€m)

Deal count


2 Allen & overy 52,791 109

3 DLA piper 9,013 100

4 CmS 11,604 93


6 Clifford Chance 42,288 67


8 Jones Day 41,794 56



11 SJ Berwin 6,134 47


13 White & Case 8,550 46

14 Hogan Lovells 7,491 45

15 mannheimer Swartling 6,194 43


17 Weil gotshal & manges 41,776 42


19 Vinge 3,981 42

20 Loyens & Loeff 12,562 39Source: mergermarket

top 20 legAl ADvIsers

42

europe

Monthly M&A Insider

LeAgUe tABLeS

VALUe

ytD 31-Aug-10

house value (€m)

Deal count

1 CVC Capital partners 4,519 5

2 Advent International 3,859 5

3 onex partners 3,672 1

4 Bain Capital 2,924 2

5 triton partners 2,057 6

6 tpg Capital 1,559 2

7 kohlberg kravis roberts & Co 1,423 4

8 Cinven 1,401 2


10 HgCapital 1,171 9Source: mergermarket

VoLUme

the private equity buyout activity tables by value and volume are based on private equity firms advising the bidder on buyout deals where the dominant geography of the target company is europe-based. the tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals.

ytD 31-Aug-10

house value (€m)

Deal count

1 HgCapital 1,171 9

2 triton partners 2,057 6

3 Barclays private equity 401 6

4 Lloyds tSB Development Capital 290 6

5 edmond de rothschild Investment partners

183 6

6 CVC Capital partners 4,519 5

7 Advent International 3,859 5

8 AXA private equity 402 5

9 Sovereign Capital partners 50 5

10 procuritas 28 5Source: mergermarket

top 10 prIvAte equIty FIrMs By europeAn Buyouts

VALUe

ytD 31-Aug-10

house value (€m)

Deal count

1 the Carlyle group 2,734 5

2= permira 2,408 2

2= SV Life Sciences 2,408 2


5 Apax partners 2,200 3

6 riverstone Holdings 1,759 1

7 Astorg partners 1,304 2

8 Candover Investments 1,200 2

9 Charterhouse Capital partners 1,200 1

10 3i 1,133 3Source: mergermarket

VoLUme

the private equity exit activity tables by value and volume are based on private equity firms advising the vendor on exit deals where the dominant geography of the target company is europe-based. the tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals.

ytD 31-Aug-10

house value (€m)

Deal count

1 the Carlyle group 2,734 5

2 Barclays private equity 466 4

3 ISIS private equity partners 44 4

4= Capman group - 4

4= perfectis private equity - 4

6 Apax partners 2,200 3

7 3i 1,133 3

8 Lloyds tSB Development Capital 516 3

9= Duke Street 404 3

9= parcom Capital 404 3Source: mergermarket

top 10 prIvAte equIty FIrMs By europeAn exIts

europe


trenD grApHS

europeAn M&A quArterly trenD

VALUe VoLUme

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q3 04

Q204

Q104

Valu

e (€

m)

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

europeAn M&A quArterly MID-MArket trenD

VALUe VoLUme

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

0

100

200

300

400

500

600

700

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

moving average trend line

europe

Monthly M&A Insider

europeAn M&A sector BreAkDown ytD 2010

VALUe VoLUme

0.5%

13.1%0.2%

12.2%

1.7%1.9%

5.4%

2.8%

10.0%

9.9%

5.3%

10.0%

27.1%


Consumer

TMT

Business Services

Financial Services



Construction

Leisure

Transportation

Real Estate

Agriculture

Defence

15.9%

20.2%

1.0%0.4%3.3% 1.7%

3.6%

6.9%

4.9%

11.0%

9.1%

8.4%

12.9%


Consumer

TMT

Business Services

Financial Services



Construction

Leisure

Transportation

Real Estate

Agriculture

Defence

trenD grApHS

europeAn M&A quArterly prIvAte equIty trenD

VALUe VoLUme

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

European buyouts

European exits

0

50

100

150

200

250

300

350

400

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

European buyouts

European exits

44

europe


europeAn M&A DeAl sIze BreAkDown

VALUe VoLUme

0

50

100

150

200

250

300

350

400

450

500

550

600

650

700

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> €501m

€251m-€500m

€101m-€250m

€15m-€100m

€5m-€14.9m

Valu

e (€

bn)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> €501m

€251m-€500m

€101m-€250m

€15m-€100m

€5m-€14.9m

Value not disclosed

Num

ber

of d

eals

trenD grApHS

europeAn M&A geogrAphIc BreAkDown ytD 2010

VALUe VoLUme

Germany

Iberia

Benelux

Italy

Other

SEE

UK & Ireland

Nordic

France

CEE

26.5%

6.0%

14.9%

9.1%

5.9%

7.8%

12.7%

9.8%

3.1%

3.9%

12.4% 10.9%

7.2%

7.8%

5.4%

23.0%

4.6%

3.0%

14.1%

11.7%

Germany

Iberia

Benelux

Italy

Other

SEE

UK & Ireland

Nordic

France

CEE

46

Mid

dle east &

africa

THE MIDDLE EAST & AFRICA

A MERgERMARkET M&A REpoRT on

Monthly M&A Insider

For the year to date, Financial Services, TMT and the Energy, Mining and Utilities sectors remain the most active in the region, comprising 46.0% of the total deal volume; TMT and Energy, Mining & Utilities make up 51.0% of the total deal value as well. South Africa and Israel are the most active countries, comprising 30.0% and 28.0% of deal volume for the year-to-date, respectively. South Africa has amassed 33.0% of the total deal value this year, followed closely by nigeria with 31.0%. Israel was the most active country in August with 6 Israeli target-based transactions, valued at US$407m.

Q3 (up to 31-Aug-10) has already seen a 33.0% increase in deal value compared to Q2 while volume is 54.0% lower than Q2 so far. Buyouts in MEA are on the rise this year, with a deal value increase of 351.0% in Q3 so far, compared to Q2 this year. Deal volume has also increased in the same period by 50.0%, showing early signs of recovery. However, when compared to Q3 2009, deal value has decreased 62.0% and volume by 63.0%, a far cry from the days before the financial crisis struck the region.

M&A activity is expected to pick up in the region after Eid, the end of the religious festival Ramadan. For instance, according to AMEInfo, UAE-listed telco Etisalat is interested in the Moroccan market after an unsuccessful bid to acquire a stake in Morocco’s Meditel last year. Also, Etisalat CEo Jamal Al Jarwan said that the company is eager to bid for the third mobile operator licence that the Syrian government will issue soon.

Meanwhile, South Africa will hit the headlines once again following the World Cup. According to Financial news, Russian investment bank Renaissance Capital recently appointed Charles Barlow, a South African former Managing Director at greenhill, as Head of M&A in new Markets, such as Africa, Brazil, India, kurdistan and Iraq. In July, Renaissance Capital completed the acquisition of BJM Securities, the South African security broker, for a total cash consideration of US$27.83m.

one of the most interesting deals to come out of Africa in the next quarter will be HSBC’S offer to acquire up to 70.00% of nedbank, the South African bank, from old Mutual. HSBC has already started due diligence and it is understood that the process will complete in the next two months. According to Trade Arabia, HSBC’s Chinese customers will benefit from this deal as they are looking to do deals on the resource-rich continent.

M&A ACTIvITy HAS BEEn QUIET In AUgUST WITH MoST oF THE REgIon oBSERvIng RAMADAn. FoR ALL oF THE MIDDLE EAST AnD AFRICA, THERE WERE onLy 17 DEALS AnnoUnCED THIS MonTH. THE LARgEST DEAL Took pLACE In LEBAnon, WITH EFg-HERMES HoLDIng SAE ACQUIRIng A 65.00% STAkE In CREDIT LIBAnAIS SAL, FRoM CApITAL InvESTMEnT HoLDIng AnD CApITAL InvESTMEnT HoLDIng SAL, FoR A ConSIDERATIon oF US$542M.

47

Mid

dle east &

africa

Monthly M&A Insider

Target: Credit Libanais SAL Announced: 17-Aug-10

Bidder: EFg-Hermes Holding SAE Deal value: US$542m

Vendor: Capital Investment Holding SAL; and Capital Investment Holding Deal nature: Cross-border, private

• EFg-Hermes Holding SAE, the listed Egypt-based company engaged in investment banking, securities brokerage, asset management services and private equity, which was formed as a result of merger of Egyptian Financial group (EFg) and Hermes, has acquired a 65.00% stake in Credit Libanais SAL, the Lebanon based bank, from Capital Investment Holding and Capital Investment Holding SAL, for a consideration of US$542m.

• Along with the agreement, the bidder has also got a call option over an additional 25.00% interest which will be exercisable over the next two years. Credit Libanais SAL reported revenues of US$51m for the year 2009.

• The consideration is represents a transaction multiple of approximately 2x shareholders’ equity. The acquisition will be financed from EFg Hermes’ own cash resources and will not require any external funding.

• The transaction will enable EFg Hermes to enter into investment banking. The completion of the transaction is subject to the approval of Central Bank of Lebanon.

DEAL oF THE MonTH

Advisers

Target/Seller Bidder

Financial Financial JpMorganEFg Hermes Holding

Legal Legal Dewey& LeBoeuf

PR PR

Exit multiples – Y/E 30-Sep-09 Premium analysis

Multiples Value (US$m) Offer price per share (US$) n/a

Revenue n/a - 1 day before n/a

EBITDA n/a - 1 month before n/a

EBIT n/a - 1 day after n/a

Earnings 16.3x 51.1 Pre-rumour n/a

48

Mid

dle east &

africa

Monthly M&A Insider

TOP 15 MIDDLE EASTERn & AFRIcAn AnnOUncED DEALS FOR YTD 31 AUgUST 2010Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia


(US$m)Revenue EBITDA P/E

30-Mar-10 C Zain Africa Bv TMT Bharti Airtel Limited Mobile Telecommunications Company k.S.C.

11.2 - 10,700

15-Jul-10 p Dimension Data Holdings plc

TMT nippon Telegraph and Telephone Corporation

0.7 11.5 0.2 18.1% 2,822

18-Feb-10 p Tsogo Sun Holdings pty Ltd

Leisure gold Reef Resorts Limited

Hosken Consolidated Investments Limited; and SABMiller plc

19.7 21.9 59.0 - 2,721

28-Mar-10 p Sonangol Sinopec International Limited (55.00% stake)


Sinopec Corporation Hongkong International Limited

Sinopec overseas oil & gas Limited

- 2,457

31-Mar-10 p Momentum group Limited

Financial Services

Metropolitan Life Limited

FirstRand Limited n/a n/a - 2,408

10-May-10 p Anglo American Zinc


Hindustan Zinc Limited

Anglo American plc 2.0 6.3 - 1,338

25-Mar-10 p Hyprop Investments Limited (66.70% stake)

Real Estate Redefine Income Fund Limited

15.3 2.5% 942

21-Mar-10 C Qatar Shipping Company QSC

Transportation Qatar navigation Company QSC

-24.0% 917

10-Jan-10 C Qatar Real Estate Investment Co

Real Estate Barwa Real Estate Company QSC

n/a n/a 10.1 30.6% 862

20-Jul-10 p Bp plc (Western Desert business concessions and East Badr El-din exploration concession in Egypt)


Apache Corporation Bp plc 650

11-Jul-10 p Aabar Investments pJSC

Financial Services

International petroleum Investment Company

n/a n/a 3.3 545

17-Aug-10 p Credit Libanais SAL (65.00% stake)

Financial Services

EFg-Hermes Holding SAE

Capital Investment Holding SAL; and Capital Investment Holding

n/a n/a 16.3 - 542

20-May-10 C Shadeed Iron & Steel LLC


Jindal Steel & power Ltd

Al ghaith Holding pJSC

- 464

10-Mar-10 C Foodcorp (proprietary) Limited (77.00% stake)

Consumer new Foodcorp Holdings (proprietary) Limited

pamodzi Investment Holdings (proprietary) Limited

0.6 5.8 - 453

18-Jan-10 p Bank Audi SAL - Audi Saradar group (13.95% stake)

Financial Services

M1 group Ltd EFg-Hermes Holding Company

n/a n/a 3.4% 450


Top DEALS & ExpECTED DEALS

49

Mid

dle east &

africa

Monthly M&A Insider

Situation Target company Sector Potential bidder company

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

Seller company Market cap/ est.

value (US$m)

comments

Rumoured takeover

Zimbabwe Iron and Steel Company


ArcelorMittal; and Jindal Steel & power Ltd

government of Zimbabwe

300 Zimbabwe has invited offers for state-owned Zisco and India’s Jindal Steel and power (JSpL) is planning to submit a further bid.

potential takeover

Egbin Electric power plc

TMT korea Electric power Corporation

9 Egbin Electric power, nigeria’s state-owned power plant, will sell a 51.00% stake to korea Electric power Corporation (kEpCo), said Egbin’s Chief Executive officer J. o. ogbonna.

potential takeover

Al othaim Real Estate Investment and Development Company

Consumer Al othaim Markets Company

- Al othaim Markets signs MoU to acquire Al othaim Real Estate Investment and Development Company.

Rumoured takeover

Atlantic Wireless (LiberCell)

TMT Hits Telecom Holding - Hits Telecom planning to increase stake in LiberCell.

Expected deals based on confirmed announcements by companies involved

PIPELInE OF MIDDLE EASTERn & AFRIcAn ExPEcTED DEALS

Top DEALS & ExpECTED DEALS

TOP 5 MIDDLE EASTERn & AFRIcAn AnnOUncED DEALS OF ThE MOnTh (AUgUST 2010)Announced Status Target company Sector Bidder company Seller company Exit multiples (x) Bid premia

1-day before

Deal value

(US$m)Revenue EBITDA P/E

17-Aug-10 p Credit Libanais SAL (65.00% stake)

Financial Services

EFg-Hermes Holding SAE

Capital Investment Holding SAL; and Capital Investment Holding

n/a n/a 16.3 - 542

31-Aug-10 p Attenti Holdings S.A. TMT 3M Company Francisco partners Lp; Cavendish Asset Management; and Sequoia Capital Israel

- 230

22-Aug-10 p Derech Eretz Highways (1997) Ltd. (37.50% stake)

Construction Israel Infrastructure Fund

Africa Israel Investments Ltd

- 125

05-Aug-10 p Business Connexion group, Ltd. (30.70% stake)

TMT Black Economic Empowerment

3.5% 61

04-Aug-10 p Mashala Resources Energy, Mining & Utilities

Continental Coal Limited

- 56


50

Mid

dle east &

africa

Monthly M&A Insider

LEAgUE TABLES

vALUEYTD


(US$m)Deal count





5 Standard Chartered 11,650 3

6 HSBC Bank 11,617 3


8= global Investment House 10,700 1

8= State Bank of India 10,700 1

10 Royal Bank of Scotland group 5,715 2

11 Commerzbank 5,715 1

12 JpMorgan 5,173 5

13 Lazard 4,854 6


15 Rand Merchant Bank 4,589 8Source: mergermarket

voLUME

The financial adviser league tables by value and volume have been run from 1 January 2010 to 31 August 2010 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 Middle East (including Israel) & African-based.

YTD 31-Aug-10

house Value (US$m)

Deal count


2 Rand Merchant Bank 4,589 8

3 Lazard 4,854 6

4 JpMorgan 5,173 5

5 Investec 4,062 5

6 Ernst & young 559 5

7 Deloitte 200 5






13 nedbank Capital 295 4

14 pricewaterhouseCoopers 78 4

15 Standard Chartered 11,650 3Source: mergermarket

TOP 15 FInAncIAL ADVISERS – MIDDLE EAST & AFRIcA

vALUEYTD


(US$m)Deal count





5 Talwar, Thakore and Associates 10,700 1

6 Webber Wentzel 7,488 11

7 Edward nathan Sonnenbergs 6,815 7




11= goERg Rechtsanwaelte 5,715 1

11= kirkland & Ellis 5,715 1

11= noerr 5,715 1

11= Willkie Farr & gallagher 5,715 1

15 Eversheds 2,853 2

Source: mergermarket

voLUME

The legal adviser league tables by value and volume have been run from 1 January 2010 to 31 August 2010 and include lapsed and withdrawn deals. The tables cover all sectors and are based on the geography of either the target, bidder or seller being Middle East (including Israel) & African-based.

YTD 31-Aug-10

house Value (US$m)

Deal count

1 Webber Wentzel 7,488 11



4 Werksmans 866 8

5 Edward nathan Sonnenbergs 6,815 7

6 Bowman gilfillan 1,702 7





11 DLA Cliffe Dekker Hofmeyer 785 5

12 gibson Dunn & Crutcher 735 5

13 CMS 686 4

14 Jones Day 597 4

15 Baker & Mckenzie 200 4Source: mergermarket

TOP 15 LEgAL ADVISERS – MIDDLE EAST & AFRIcA

51

Mid

dle east &

africa

Monthly M&A Insider

LEAgUE TABLES

vALUE

vALUE

YTD 31-Aug-10

house Value (US$m)

Deal count

1 Capitau 453 1

2 Temasek Holdings pte 200 1

3 Israel Infrastructure Fund 125 1

4 Marlin Equity partners 39 1

5 Actis Capital 30 1Source: mergermarket

voLUME

The private equity buyout activity tables by value and volume are based on private equity firms advising the bidder on buyout deals where the dominant geography of the target company is Middle East (including Israel) & African-based. The tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals.

YTD 31-Aug-10

house Value (US$m)

Deal count

1 Capitau 453 1

2 Temasek Holdings pte 200 1

3 Israel Infrastructure Fund 125 1

4 Marlin Equity partners 39 1

5 Actis Capital 30 1Source: mergermarket

TOP 5 PRIVATE EqUITY FIRMS BY MIDDLE EASTERn & AFRIcAn BUYOUTS

vALUEYTD 31-Aug-10

house Value (US$m)

Deal count

1pamodzi Investment Holdings (proprietary) 453 1

2 Francisco partners 230 1

3 Sequoia Capital 230 1

4 Radius ventures 160 1

5 pitango venture Capital 100 2Source: mergermarket

voLUME

The private equity exit activity tables by value and volume are based on private equity firms advising the vendor on exit deals where the dominant geography of the target company is Middle East (including Israel) & African-based. The tables by value and volume have been run from 1 January 2010 to 31 August 2010 and exclude lapsed and withdrawn deals.

YTD 31-Aug-10

house Value (US$m)

Deal count

1 pitango venture Capital 100 2

2 Cedar Fund 89 2

3 Evergreen venture partners 29 2

4pamodzi Investment Holdings (proprietary)

453 1

5= Francisco partners 230 1

5= Sequoia Capital 230 1Source: mergermarket

TOP 5 PRIVATE EqUITY FIRMS BY MIDDLE EAST & AFRIcA ExITS

52

Mid

dle east &

africa

Monthly M&A Insider

TREnD gRApHS

MIDDLE EAST & AFRIcA M&A qUARTERLY TREnD

vALUE voLUME

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

30

60

90

120

150

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

of d

eals

MIDDLE EAST & AFRIcA M&A qUARTERLY MID-MARkET TREnD

vALUE voLUME

0

1,000

2,000

3,000

4,000

5,000

6,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

0

10

20

30

40

50

60

70

80

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

of d

eals


53

Mid

dle east &

africa

Monthly M&A Insider

TREnD gRApHS

MIDDLE EAST & AFRIcA M&A SEcTOR BREAkDOwn YTD 2010

vALUE voLUME

0.5%

5.7% 3.8%

13.3%

8.8%

3.4%

1.2%

16.4%

9.1%

2.7%

34.5%


Financial Services

Business Services

Consumer

Energy, Mining & Utilites

TMT

Leisure

Transportation


Construction

Real Estate

Agriculture

Defence

15.3%

15.3%

8.7%

15.3%

2.2%

0.5%1.6%

5.5%2.7%

4.4%

2.2%

14.8%

11.5%


Financial Services

Business Services

Consumer

Energy, Mining & Utilites

TMT

Leisure

Transportation


Construction

Real Estate

Agriculture

Defence

MIDDLE EAST & AFRIcA M&A qUARTERLY PRIVATE EqUITY TREnD

vALUE voLUME

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (U

S$m

)

Middle East& Africa buyouts

Middle East& Africa exits

0

2

4

6

8

10

12

14

16

18

20

Q310*

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Num

ber

of d

eals

Middle East& Africa buyouts

Middle East& Africa exits

54

Mid

dle east &

africa

Monthly M&A Insider

TREnD gRApHS

MIDDLE EAST & AFRIcA M&A gEOgRAPhIc BREAkDOwn YTD 2010

vALUE voLUME

3.2%

7.1%

0.7% 0.2%0.1%0.1%

0.1%

4.2%0.2%

1.6%

32.8%

3.9%2.8%

4.8%

0.9%

0.6%

5.2%

31.2%

South Africa

Israel

Egypt

United Arab Emirates

Kuwait

Saudi Arabia

Qatar

Nigeria

Oman

Jordan

Namibia

Lebanon

Syrian Arab Republic

Angola

Sierra Leone

Zambia

Libya

Zimbabwe

Uganda

Mozambique

1.8%

30.3%

27.9%

8.5%

5.5%

4.8%

3.6%

3.0%

2.4%2.4%

2.4%

1.8%

1.8%1.2%

1.2%1.2%

South Africa

Israel

Egypt

United Arab Emirates

Kuwait

Saudi Arabia

Qatar

Nigeria

Oman

Jordan

Namibia

Lebanon

Syrian Arab Republic

Angola

Sierra Leone

Congo

MIDDLE EAST & AFRIcA M&A DEAL SIZE BREAkDOwn

vALUE voLUME

0

10

20

30

40

50

60

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> US$501m

US$251m-US$500m

US$101m-US$250m

US$15m-US$100m

US$5m-US$14.9m

Valu

e ($

bn)

0

50

100

150

200

250

H22010*

H12010

H22009

H12009

H22008

H12008

H22007

H12007

H22006

H12006

H22005

H12005

H22004

H12004

> US$501m

US$251m-US$500m

US$101m-US$250m

US$15m-US$100m

US$5m-US$14.9m

Value not disclosed

Num

ber

of d

eals

www.mergermarket.comRemark, part of The Mergermarket group

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t: +44 (0)20 7059 6100f: +44 (0)20 7059 [email protected]

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Disclaimer

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.

Remark, the events and publications arm of The Mergermarket group, offers a range of publishing, research and events services that enable clients to enhance their own profile, and to develop new business opportunities with their target audience.

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.

• H1 2010 refers to the period 31 January 2010 to 31 August 2010.

Documents

A mergermArket report on globAl m&A Activity Monthly M&A ... · to telecommunications giant Bell Canada Enterprises. GLOBAL OVErVIEW head of research – Elias Latsis editor – rory