Transaction. Acquisitions still driving robust transaction activity

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1 No. of transactions Transaction Advisory Services Transactions by Sweden s largest companies Corporate Transaction Trends still driving robust transaction activity, a quarterly publication that aims to identify trends in the level and direction of transactions completed by Sweden s largest companies, reports continuing robust transaction activity driven by acquisitions. Overall, the LTM number of completed transactions (133) increased for the first time since Q2 2012, and is now slightly ahead of the number of transactions completed in calendar year 2012 (129). During Q3 2013, large Swedish companies completed 36 transactions. This is a 44% increase compared to Q but an 8% decrease compared to the relatively strong previous quarter. The number of completed acquisitions (27) in Q was one fewer than in the previous quarter but is still the third highest quarter since Q Divestment activity has remained on broadly the same level since The number of completed divestments (9) in Q decreased by 18% compared to the previous quarter. Rolling last twelve months (LTM) transactions At the same time, the pipeline of announced but not yet completed transactions is considerably stronger at the end of Q compared to the previous quarter. The pipeline includes pending larger acquisitions by Atlas Copco (dwards Group), SKF (Kaydon Corp) and SCA (Vinda). At the start of 2013, we forecast that transaction activity would be at the same level or better than in 2012 and could reach up to 150 completed deals if global economic activity continued to improve. Going into the final quarter of 2013, a full year outturn in the upper half of that range is still possible. However, 2013 is unlikely to reach the 155 transactions completed in Q3 '06 Q3 '07 Q3 '08 Q3 '09 Q3 '10 Q3 '11 Q3 '12 Q3 '13 LTM no. of transactions LTM no. of aquisitions LTM no. of divestments

2 No. of transactions No. of transactions Year on year quarterly acquisitions 27 Q1 Q2 Q3 Q4 FY13 FY12 FY11 FY10 Year on year quarterly divestments 9 Ranked by nterprise Value, Investor s divestment of its 49% stake in Gambro was the largest transaction completed in Q The next largest divestment was the takeover of Höganäs, which was declared unconditional at the end of the quarter. The Höganäs transaction is the first takeover of a large Swedish company since Niscayeh in Q ABB completed five acquisitions during Q3 2013, including the largest acquisition in the quarter of Power One. ricsson was also active and completed four transactions in the quarter. The three largest acquisitions during Q each involved targets located in the US, which continued to be an attractive investment destination accounting for 30% of total completed acquisitions in the quarter. Manufacturing and construction retained its position as the most active industry sector, accounting for 47% of all completed transactions in Q TMT was the next most active sector, both in the quarter and in the LTM period. 2 Q1 Q2 Q3 Q4 FY13 FY12 FY11 FY10 Q largest transactions (ranked by nterprise Value) Date Target Seller Buyer nterprise Target Value ( 100% ) Turnover M M 2013/07 PowerOne ABB /07 Rio Tinto agle Mine Rio Tinto Lundin Mining 232 n.a. 2013/07 Omthera Pharmaceuticals AstraZeneca 195 n.a. 2013/09 Gambro (49%) Investor Baxter International 3,010 1, /09 Höganäs Public offer H Intressenter 1, /09 iderøes Flyveselskap (80%) SAS Torghatten ASA, Fjord1 AS and Nordland Fylkeskommune Sources: Press releases and latest available financial reports. 2

3 Last twelve months (LTM) and 2012 by size Target Turnover Q4'12 Q1'13 Q2'13 Q3'13 LTM 2012 under M M over M Total Target Turnover Q4'12 Q1'13 Q2'13 Q3'13 LTM 2012 under M M over M Total Q and last twelve months (LTM) by industry sector and size Target Turnover Q3'13 LTM Industry sector Band Basic industries under M M over M Manufacturing and construction under M M over M Retail and consumer goods under M M over M Finance and real estate under M M over M Healthcare under M M over M TMT under M M over M Services under M M over M Total under M M over M Total

4 Q by geographic region Americas (excl US) 4% Asia (excl Japan) 4% LTM by geographic region Americas (excl US) 3% Asia (excl Japan) 3% US 30% 7% 18% 37% US 22% 8% 17% 47% 11% 11% 78% 25% 14% 61% 4

5 Transaction Advisory Services Contacts Jesper Almström Head of Transaction Advisory Services, Transaction Support Staffan kström M&A Advisory Staffan Folin M&A Advisory Björn Gustafsson Valuation & Business Modelling Johan Nordström Restructuring Henrik riksson Operational Transaction Services Kristin Ringland Commercial Advisory Services Antoine van Horen Transaction Tax Transaction Advisory Services provides professional advice in connection with acquisitions, divestments, financing, restructuring and other transactions. Our services include M&A advice, restructuring advice (including advice on working capital management), valuations and business modelling, transaction support (including financial due diligence), operational transaction services (including operational due diligence and integration services) and transaction tax services. Y Assurance Tax Transactions Advisory About Y Y is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. e develop outstanding leaders who team to deliver our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. Y refers to the global organisation and / or one or more of the member firms of rnst & Young Global Limited, each of which is a separate legal entity. rnst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. About Y s Transaction Advisory Services How you manage your capital agenda today will define your competitive position tomorrow. e work with clients to create social and economic value by helping them make better, more informed decisions about strategically managing capital and transactions in fastchanging markets. hether you re preserving, optimising, raising or investing capital, Y s Transaction Advisory Services combine a unique set of skills, insight and experience to deliver focused advice. e help you drive competitive advantage and increased returns through improved decisions across all aspects of your capital agenda. For more information about our organisation and our services, please visit Transactions covered in this publication are transactions completed by large Swedish companies, defined to mean (i) companies which are listed on the Stockholm Stock xchange and have a market capitalization over MSK 5,000; and (ii) other Swedish companies with a turnover of more than MSK 10,000. Swedish companies that are controlled by foreign groups have been excluded, unless they are headquartered in Sweden. Only transactions completed or declared unconditional in the period with an estimated deal value over approximately 50 MSK and which have resulted in a change of control or significant change of influence have been included. If large Swedish companies are present on both sides of the same transaction, the transaction is recorded as an acquisition. Public takeovers by third parties and demergers are recorded as divestments. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. rnst & Young AB accepts no responsibility for any loss arising from any action taken or not taken by anyone using the material in this publication. For further enquiries, or to add your name to the mailing list for this publication, please send an to transactions@se.ey.com rnst & Young AB. All Rights Reserved.