2012 North American Deal Flow Expected to be on Par with or Better than in 2011, Say Leading M&A Advisors in 5 th Annual Brunswick Group M&A Survey

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1 Embargoed until Wednesday, March 7 at 6:00am EST 2012 North American Deal Flow Expected to be on Par with or Better than in 2011, Say Leading M&A Advisors in 5 th Annual Brunswick Group M&A Survey - Global M&A Volume Forecasted to be Steady with Strongest Activity in Brazil, China - - Asian Buyers Expected to Drive Inbound U.S. Transactions, Though Significant Regulatory and Political Challenges Exist for U.S.-China Activity - - Dealmakers Predict that PE Firms Will See Higher Taxes on Carried Interest - - Results Announced to Coincide with 2012 Tulane Law School M&A Conference - NEW ORLEANS, March 7, 2012 Leading M&A advisors are generally optimistic about the level of deal activity in 2012, encouraged by improving economic conditions and greater confidence among CEOs and Boards of Directors, the 5 th Annual Brunswick Group M&A Survey finds. Nearly half of the advisors polled predict an increase in deal flow over last year s volume both in North America and globally, while 42 percent expect deal flow to stay the same as Over 100 top M&A bankers and lawyers responded to the 2012 poll about their views on the current deal landscape and trends. For the first time, the annual survey also asked top China-based M&A advisors for their views on deal dynamics in Asia. Of the China experts polled, 57 percent expect more global M&A activity this year than in More (74%) are bullish on the level of domestic transactions in Greater China. Results were released ahead of the 24th Annual Tulane University Law School Corporate Law Institute, an annual gathering of the deal community that draws lawyers, bankers, Delaware judges and other members of the deal community. While the first quarter is slow, the deal community is encouraged by the economy strengthening and the stock market climbing, said Steven Lipin, senior partner, Brunswick Group. Between cash on corporate balance sheets and a rise in CEO/Board confidence, advisors feel like the climate is conducive to deal-making. Among the trends that the Brunswick survey predicts: more cross-border activity, the continuation of mostly cash deals, and more activity in fast-growing countries such as Brazil, China, Canada and Australia. The energy, natural resources and healthcare sectors are expected to be busiest in terms of M&A activity according to those polled. When asked about U.S.-China transactions, advisors noted that completing these means successfully navigating regulatory, political and cross-cultural challenges.

2 There was a clear concern about the thicket of regulatory, CFIUS and political challenges that come from Chinese companies making acquisitions in the U.S., and in a similar vein challenges that arise from acquisitions in China, said Lipin. Both have to walk a tightrope of regulatory, political and PR issues. In North America, economic conditions (70%), more cash on balance sheets (63%) and CEO/Board confidence (61%) are seen as the top three factors that will spur deal activity. The majority of these transactions are expected to be among strategic buyers (41%). For inbound transactions, 78 percent of those polled expect foreign acquirers to come from Asia, an increase from 56 percent last year. Brazil (69%), China (65%) and Canada (46%) rank as the top three most active deal markets outside the U.S. Among the top-rated sectors, mining and natural resources (53%) is seen as being ripe for consolidation compared with past years, while the energy (55%), healthcare (51%) and technology (47%) sectors will continue to be active sectors. M&A advisors in China predict the domestic energy (22%) and consumer goods/retail (22%) sectors will be most active. Continuing an upward trend over the past three years, 63 percent of North American advisors expect to see deals being done with cash as opposed to a mix of cash and stock (35%) or all stock (2%). Half of advisors surveyed believe there will be an increase in hostile activity in Domestic private equity deals are seen as slightly less active than last year (15% in 2012 vs. 22% in 2011). Asked about the impact of the public scrutiny of the private equity industry, survey respondents saw little impact on deal flow 82 percent predict no change while 15 percent say it will cause a decrease in deal flow. But three-quarters believe that greater public scrutiny of the private equity industry will result in higher tax rates on carried interest. Given the uncertainty over Europe s sovereign debt crisis, 51 percent of North American advisors believe that buyers will be wary of pursuing transactions in Europe. In contrast, Chinese M&A advisors expect Asian companies will view the European turmoil as an opportunity. Sixty-one percent say there will be significant activity by Chinese companies in Europe in A desire for outward expansion, opportunities in struggling Western economies and more cash on balance sheets are seen as the greatest drivers of M&A activity for Chinese companies. With regard to cross-border deals, North American and Asian M&A advisors have differing views of the challenges that impede transactions. Seventy percent of China-based advisors say the biggest challenge for overseas buyers acquiring Chinese companies is getting regulatory approval from the Chinese government. Three-quarters also believe that it is easier for U.S. companies to do deals in China than for Chinese companies 2

3 to do deals in the U.S. In contrast, only 18 percent of North American advisors share this view. More North American advisors say that both systems have challenges, citing protectionist tendencies, the U.S. political environment and Chinese regulatory regime as obstacles to completing transactions. The full survey results can be found on the Brunswick Group website at: About Brunswick Group LLC Brunswick Group LLC is a private partnership with nearly 500 employees, including more than 80 partners around the world. The firm has grown organically over 20 years and now has 19 wholly owned offices in 11 countries. The firm's service offer comprises corporate and financial communications, investor relations, internal communications and opinion research. Brunswick was ranked #1 in terms of deal value according to the Mergermarket global league table for M&A communications advisors for Contact: Gemma Hart or Beau Allen Brunswick Group (212)

4 5th Annual M&A Survey

5 For the fifth consecutive year, the Brunswick Group M&A Survey has polled leading North American M&A bankers and lawyers on their views about the current deal landscape and trends. Over 100 top deal advisors responded to the 2012 poll. This year s survey finds: 2012 North American deal flow is expected to be on par or better than Nearly half of top bankers and lawyers predict an increase over last year, while 42 percent expect deal flow to stay the same as last year. Global M&A volume is forecasted to be steady (77 percent predict flow will be steady or will increase this year) with the strongest activity in Brazil and China. Asian buyers are expected to drive inbound U.S. transactions a view that has grown steadily over the past five years. When asked about the impact that public scrutiny of the private equity industry may have, three out of four dealmakers predict that PE firms will see higher taxes on carried interest. The results of the survey are released ahead of the 24th Annual Tulane University Law School Corporate Law Institute, the leading M&A conference in the U.S. that draws lawyers, bankers, Delaware judges, proxy solicitors and other members of the deal community. For further information:

6 ABOUT BRUNSWICK GROUP LLC Brunswick Group LLC is a private partnership with a growing team of nearly 500 employees, including more than 80 partners around the world. The firm has grown organically over 20 years and now has 19 wholly owned offices in 11 countries. These include Abu Dhabi, Beijing, Berlin, Brussels, Dallas/Fort Worth, Dubai, Frankfurt, Hong Kong, Johannesburg, London, Milan, Munich, New York, Paris, San Francisco, Shanghai, Stockholm, Vienna and Washington D.C. The firm s service offer comprises corporate and financial communications, investor relations, internal communications and opinion research. Brunswick was ranked #1 in terms of deal value according to the Mergermarket global league table for M&A communications advisers for 2011.

7 1. COMPARED TO 2011, DO YOU EXPECT THE LEVEL OF NORTH AMERICAN M&A WILL INCREASE, DECREASE OR STAY THE SAME LEVEL IN 2012? Increase 42% 48% Stay the same 10% Decrease

8 2. COMPARED TO 2011, DO YOU EXPECT THE LEVEL OF GLOBAL M&A WILL INCREASE, DECREASE OR STAY THE SAME LEVEL IN 2012? Stay the same Increase 28% 49% 23% Decrease

9 3. WHAT ARE THE KEY FACTORS THAT WILL DRIVE M&A IN 2012? 80% 70% 60% 70% 63% 61% 50% 40% 30% 20% 10% 28% 25% 20% 15% 13% 0% Economic conditions More cash on balance sheets / availability of credit CEO / Board confidence Shareholder activism / pressure from investors Cross-border deals Equity market recovery Emphasis on cost cutting / synergy benefits Opportunities in struggling Western economies NOTE: Percentages do not total 100% due to multiple response options. Respondents were asked to select their top 3 options. Asked to rate the top three drivers of M&A activity in 2012, dealmakers cite economic conditions, cash on balance sheets and CEO or board confidence as key factors.

10 4. WHAT TYPE OF DEALS DO YOU EXPECT TO DRIVE THE M&A MARKET IN 2012? Domestic transactions among strategic buyers 80% Inbound foreign acquirers into the U.S. 52% Outbound U.S. acquirers outside of the U.S. 33% Domestic private equity 29% Sovereign wealth funds 3% 0% 10% 20% 30% 40% 50% 60% 70% 80% NOTE: Percentages do not total 100% due to multiple response options. Respondents were asked to select their top 2 options.

11 5. WHAT REGION DO YOU ANTICIPATE FOREIGN ACQUIRERS COMING FROM IN 2012? Europe 17% Middle East 1% Asia 78% Latin America 4% For the fifth consecutive year, advisors expect that Asian buyers will be most active in the North American deal market.

12 6. OTHER THAN THE U.S., WHAT COUNTRIES WILL BE THE BUSIEST THIS YEAR FOR M&A? Canada 46% Germany 19% Russia 11% UK 29% China 65% Brazil 69% Australia 32% NOTE: Percentages do not total 100% due to multiple response options. Respondents were asked to select their top 3 options.

13 7. WHAT SECTORS DO YOU ANTICIPATE ARE MOST RIPE FOR CONSOLIDATION IN 2012? Energy Mining / natural resources Healthcare Technology Financial services Industrials Consumer goods / retail Telecoms Media Utilities 4% 4% 3% 20% 26% 40% 55% 53% 51% 47% 0% 10% 20% 30% 40% 50% 60% NOTE: Percentages do not total 100% due to multiple response options. Respondents were asked to select their top 3 options. The most active sectors for deal activity, according to the poll, will be energy, mining/natural resources, technology and healthcare.

14 8. DO YOU EXPECT THERE WILL BE AN INCREASE IN HOSTILE ACTIVITY IN 2012? Yes 50% 12% No 38% Same as 2011

15 9. WHAT IMPACT WILL THE PUBLIC SCRUTINY OF THE PRIVATE EQUITY INDUSTRY HAVE ON DEAL FLOW? IT WILL: Increase it 3% Decrease it 15% 82% Have no impact

16 10. WHAT IMPACT WILL THE PUBLIC SCRUTINY OF THE PRIVATE EQUITY INDUSTRY HAVE ON THE TAXATION OF CARRIED INTEREST? 76% It will likely result in higher tax rates 24% It won t have any impact

17 11. DO YOU EXPECT TO SEE MORE DEALS USING: 35% A mix of cash and stock All cash 63% 2% All stock

18 12. WHAT IMPACT DO YOU THINK THE UNCERTAINTY OVER EUROPE S SOVEREIGN DEBT CRISIS WILL HAVE ON M&A? 12% 8% 8% 51% Buyers will be wary to pursue transactions in the E.U. E.U. sellers will look outside the E.U. for buyers E.U. companies will invest / acquire outside of the E.U. 21% No impact Other Half of respondents expect the European sovereign debt crisis will significantly dampen buyers interest in European transactions.

19 13. LOOKING AT THE REGULATORY AND POLITICAL ENVIRONMENTS OF THE U.S. AND CHINA, IS IT EASIER TO DO A DEAL WHERE A U.S. ACQUIRER IS GOING INTO CHINA OR A CHINESE ACQUIRER IS COMING INTO THE U.S.? Both have challenges 18% U.S. acquirer is going into China 38% 44% Chinese acquirer is coming into the U.S. Advisors polled in the study note that successfully completing cross-border transactions means navigating regulatory, political and cross-cultural challenges.

20 A selection of charts from the Brunswick China M&A Survey

21 WHAT REGION DO YOU ANTICIPATE FOREIGN ACQUISITIONS BY CHINESE COMPANIES COMING FROM IN 2012? Europe 61% US 17% Africa 17% Australia 4%

22 IN WHAT SECTOR IN GREATER CHINA DO YOU EXPECT TO SEE THE GREATEST AMOUNT OF CONSOLIDATION IN 2012? Consumer goods / retail Energy 22% 22% Property 17% Manufacturing Healthcare 13% 13% Raw / industrial materials 9% Financial services 4% 0% 5% 10% 15% 20% 25%

23 LOOKING AT THE REGULATORY AND POLITICAL ENVIRONMENTS OF THE U.S. AND CHINA, IS IT EASIER TO DO A DEAL WHERE A U.S.ACQUIRER IS COMING INTO CHINA OR A CHINESE ACQUIRER IS GOING INTO THE U.S.? 25% Chinese acquirer is going into the U.S. 75% U.S. acquirer is going into China

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