Our Insights into M&A Trends Global Dynamics July 2014 supplement

Transcription

1 Our Isights ito M&A Treds Global Dyamics July 2014 supplemet

2 2014: The story so far The global M&A market has stregtheed cosiderably i the first half of the year, drive by icreased boardroom cofidece to ivest through M&A. We are seeig the retur of strategic deals ad trasformatioal M&A, some of which have bee i the pipelie for years, as well as icreased appetite for usolicited moves. The icreased activity spas all of the key regios. As we predicted i our 2013 report, Europea M&A O the road to recovery?, ivestmet is floodig back ito Europe, with US ad Asia ivestors seekig opportuities to purchase Europea brads, patets ad techologies, ad to access Europea supply chais ad cosumers. We are also seeig strog M&A activity i the US ad across. However, whilst boardroom attetio is ow refocused o M&A opportuities, safeguardig corporate reputatio remais a priority ad therefore cautio ad circumspectio remai. As such, we are seeig cotiued focus o extesive ad specialised busiess ad legal due diligece, ad detailed atitrust ad regulatory assessmet aroud deal feasibility ad timig issues. The deal pipelie is strog across all major regios ad i certai key sectors as we move ito the secod half of the year. Whilst this of course bodes well for M&A activity levels for the remaider of 2014 ad beyod, it is perhaps too early to extrapolate a M&A bull market from the curret surge i activity. Dagerous asset bubbles, a chage i the macroecoomic cycle ad cotiued political istability i the Middle East ad other parts of the world could yet impact a loger-term M&A revival. 2 Guy Norma Global Head of Corporate Clifford Chace has bee advisig o over US$ 84.6b of deals i 2014 to date, may of which reflect key global treds. Highlights of deals o which we have advised over the past few moths iclude: Modelez Iteratioal ad DE Master Bleders 1753 creatio of a global coffee powerhouse with aual reveues of more tha US$ 7b a strategic tras-atlatic combiatio i the cosumer sector Vodafoe's acquisitio of Spaish cable operator Grupo Corporativo ONO for 7.2b evidece of M&A opportuities i Souther Europe ad the cotiued stregth of the TMT sector Shaghai-based Sprig Airlies ivestmet i Sprig Airlies Japa, a low-cost carrier etrat to the Japaese domestic airlie market highlightig the expasio of idustries supportig the growig cosumer-base i Asia Royal Dutch Shell's sale of its Australia dowstream assets to a Vitol-Abu Dhabi JV i a deal worth US$ 2.17b a example of cotiuig stregth i the atural resources sector i Australia ad Middle Easter appetite for ivestig i Nippo Steel's purchase of waste icieratio specialist Fisia Babcock for 139m highlightig cotiued strog outboud M&A from Asia ito Europe Perod Ricard's strategic move ito the US wiery market through the purchase of Kewood vieyards i Califoria a example of Europea busiesses seekig to acquire critical mass i this key global market SEGRO's purchase of 472 millio of prime logistics assets i Germay, Polad ad Frace further evidece of gree shoots i Europea real estate M&A Carlyle's US$ 1.93b acquisitio of Tyco's South Korea uit - the largest private equity buyout deal i Korea sice 2008, ad evidece of icreasig global private equity activity Babcock's GBP 1.6b purchase of helicopter services firm Avicis evidecig reewed optimism i the UK M&A market L'Oréal's acquisitio of the Decléor ad Carita brads from Shiseido. Carita is distributed i 56 coutries ad Decléor is distributed i 80 coutries a focus o acquirig quality brads i the cosumer/retail sector America Tower Corporatio's acquisitio of 60 tall towers from Richlad Towers for $600 millio (icludig assumed debt) evidece of cotiued stregth i the US TMT sector Global activity levels The first half of 2014 has witessed the log-awaited uptur i global M&A activity, with deal values returig to levels last see pre-fiacial crisis. However, the jury is still out as to whether the curret deal flurry is short-term or whether we are seeig the first sigs of a sustaiable recovery Global M&A i the first half of 2014 has icreased 30% by value as compared to the previous half-year (US$ 1.5tr up from US$ 1.2tr). This has bee the most active half year period i terms of deal value i 7 years, matchig deal values i H However, the overall picture remais somewhat distorted by eightee mega-deals, which at US$ 476.5b accout for 30% of global deal value Activity levels rose i H across all regios except Middle East/Africa, with Europe seeig the greatest uptick (up 48% o the previous period). The US M&A market cotiues to recover with deals totallig US$ 729.3b i the year to date, assisted by the aoucemet of several mega-deals, icludig AT&T/DirecTV ad Comcast/Time Warer. M&A saw a 23% rise i deal value, boosted by sigificat icreased ivestmet from Europe ad the Middle East, leadig to the strogest half-year for M&A sice before the fiacial crisis Cross-border M&A ow accouts for the highest proportio of total M&A sice records bega i 1998 (US$ 728.5b i 2014 to date, comprisig 46% of total M&A activity). North America has become a key target for cross-regioal activity, with iboud deals totallig US$ 138b, a 62% icrease from the previous half-year. Europe also cotiues to attract icreased iboud ivestmet, with sharp icreases` from North ad Lati America (which rose 115% ad 270% respectively). We are cotiuig to see compaies i Chia ad other high-growth ecoomies focusig o opportuities i Europe ad the US TMT remais the strogest sector i terms of deal value, buoyed by several sigificat trasactios icludig the Comcast/Time Warer ad Facebook/WhatsApp deals. However the hottest sector curretly is Pharma/Healthcare, which has see US$ 258.6b of deals i the first half of the year, ad the sector s share of global deals rose to 16%. Four of the top te aouced global M&A deals by value i the year to date have bee i the Healthcare sector IPO activity globally i the year to date is up 60% compared to the same period last year, with 588 ew issues globally raisig a total of US$ 117.7b. Notably, private equity houses are also usig the capital markets to secure exits, accoutig for 33% of global IPOs (eg AA listig i Lodo). IPO activity i is leadig the way i terms of umber of IPOs, followed closely by the US, whilst Europe is leadig the way i terms of value Data produced by Remark, take from mergermarket.com; IPO data is sourced from EY Global IPO Treds 2014 Q2 3

3 M&A activity (domestic ad iboud) is up across most regios, with Europe seeig the most sigificat jump a 48% rise o the previous half year. Cross-border M&A ow accouts for 46% of total M&A ad iter-regioal M&A for 25% of total M&A, as corporates ad ivestors look further afield to accomplish their growth strategies Regioal Treds Our map shows the value of M&A (domestic ad iboud) for each of the key regios i H1 2014, ad the % chage sice the previous six moth period (H2 2013) North America (ic Caada) US$ 729 billio Europe US$ 453 billio +48% US$ 308 billio Activity is pickig up across all major regios, icludig North America ad Lati America, which are up by approx 27% ad Asia Pacific is up by approx 23%. Europea M&A is up by 48% - a welcome retur to more traditioal levels. The exceptio is Africa/Middle East, where there is a suprisig 27% decrease i M&A which may i part be as a result of istability i the Middle East regio +27% Lati America US$ 65 billio Africa ad Middle East US$ 21 billio -27% +23% Where s the moey beig ivested? The map also shows the value of the two most sigificat flows of cross-border ivestmet ito each of the key geographic regios. The most sigificat cross-border M&A flows cotiue to be betwee North America ad Europe US$ 50,000m+ US$ 12,000m - 50,000m US$ 5,000m - 12,000m US$ 2,000m - 5,000m +27% The source data is produced by Remark, take from mergermarket.com Note: Iteractive maps showig ivestmet flows ito ad out of each regio are available o the Clifford Chace Global M&A Toolkit: 4 5

4 The Healthcare sector saw a sigificat 9% rise i M&A activity i the first half of the year, takig it above Eergy, Miig ad Utilities i terms of deal value. The Cosumer ad Real Estate sectors also saw icreased M&A activity Key treds ad drivers for M&A activity i the risig sectors Cosumer, Retail & Leisure Healthcare Deal value i H (US$b) TMT Healthcare Eergy, Miig ad Utilities Cosumer, Retail ad Leisure Real Estate ad Costructio Idustrials ad Chemicals Fiacial Services Trasportatio There is icreasig crossborder activity i the Cosumer sector, particularly targetig busiesses, as Europea ad US ivestmet flows ito the regio Large M&A deals i the sector i H iclude Aheuser-Busch IBev's purchase of Orietal Brewery ad Hillshire Brads acquisitio of Piacle Foods There are also sigs of strategic trasactios ad brad cosolidatio betwee established players such as the Modelez Iteratioal ad DE Master Bleders 1753 coffee joit veture Real Estate & Costructio Real Estate is returig to the listed markets evideced i particular by the umber of global REIT IPOs to date such as the listig of the Empire State Buildig o NYSE ad the Shaghai Jifeg/Shaghai Greelad deal (a asset swap to eable a Shaghai listig) A sigificat ammout of activity i the Real Estate sector has bee drive by icreased ivestmet by capital rich ivestors, such as sovereig wealth fuds, pesio fuds ad isurace compaies. For example, the acquisitio by Sigapore's GIC of 50% of the Broadgate Estate, the largest sigle-asset trasactio i UK real estate history Healthcare compaies are seekig to focus o profitable busiess segmets. No-core divestmets cotiue across the sector Mega-deals such as Medtroic/Covidie (US$ 49.5b) ad Valeat/Allerga (US$ 45.9b) have boosted deal values i H Iovative deal structures combiig traditioal M&A with asset swaps ad/or joit vetures also facilitated the sector s appetite for M&A, as show by Novartis/GSK (US$ 20b) ad Merck/Bayer (US$ 15b) 3% 9% 4% 2% 1% Chage i market share from H % 3% 0% Oe real estate asset class which has received particular attetio is logistic warehouses. As the o-lie retail eviromet becomes more popular so does the eed for logistic sites throughout Europe which is causig sigificat M&A activity i this area 6 7

5 Clifford Chace Global M&A Toolkit The essetial iteractive resource for ayoe ivolved i M&A trasactios. The Clifford Chace Global M&A Toolkit comprises a growig collectio of web-based trasactio tools ad i-depth aalysis of the most importat market ad regulatory developmets i M&A regimes across the globe. Simple ad effective. Available 24/7. Easy to access. Global M&A Treds: Iteractive ivestmet flow maps Our iteractive maps show curret M&A flows ito ad out of each major ivestmet regio of the globe givig you isights ito the latest treds i cross-regioal M&A. The maps are easy to use, simple ad effective. Available through the Global M&A Toolkit at Global M&A team Key cotacts Global Guy Norma T: E: guy.orma@cliffordchace.com Cetral & Easter Europe Alex Cook T: E: alex.cook@cliffordchace.com Lati America Athoy Oldfield T: / E: athoy.oldfield@cliffordchace.com Africa Specer Bayli T: E: specer.bayli@cliffordchace.com Chia Emma Davies T: E: emma.davies@cliffordchace.com Middle East Mike Taylor T: E: mike.taylor@cliffordchace.com Roger Dey T: E: roger.dey@cliffordchace.com Frace Gilles LeBreto T: E: gilles.lebreto@cliffordchace.com North America David Brito T: E: david.brito@cliffordchace.com Australia Day Simmos T: E: day.simmos@cliffordchace.com Germay Peter Dieers T: E: peter.dieers@cliffordchace.com UK Mark Poulto T: E: mark.poulto@cliffordchace.com Clifford Chace, Upper Bak Street, Lodo, E14 5JJ Clifford Chace LLP is a limited liability partership registered i Eglad & Wales uder umber OC Registered office: 10 Upper Bak Street, Lodo, E14 5JJ. We use the word parter to refer to a member of Clifford Chace LLP, or a employee or cosultat with equivalet stadig ad qualificatios.