February 2018, Issue 71

February 2018, Issue 71 In U.S. and global M&A activity for January 2018, total deal volume by dollar value decreased, while the total number of deals increased. In the U.S., deal volume decreased by 29.3% to $170.57 billion, while the number of deals increased by 42.6% to 884. Globally, deal volume decreased by 31.2% to $324.45 billion, while the number of deals increased by 9.9% to 3,118. The sharp decreases in deal volumes are likely less reflective of any dramatic decline in deal flow, but rather due to the 12-month highs set in December 2017, especially given that January 2018 marked the third-highest global and U.S. deal volumes of the preceding 12-month period. Strategic vs. Sponsor Activity In the U.S., strategic deal volume decreased by 47.0% to $108.33 billion, and the number of deals increased by 34.9% to 653. Globally, strategic deal volume decreased by 38.0% to $241.62 billion and the number of strategic deals increased by 7.0% to 2,714. Figure 1 and Annex Figures 1A 4A. Sponsor-related activity increased across all measures. In the U.S., sponsor-related deal volume increased by 67.6% to $62.24 billion, while the number of deals increased by 69.9% to 231, each of which were 12-month highs. Globally, sponsorrelated deal volume increased by 1.4% to $82.82 billion, while the number of deals increased by 34.2% to 404, a 12-month high. Crossborder Activity 1 U.S. inbound deal volume increased by 79.4% to $39.10 billion, and the number of U.S. inbound deals increased by 11.0% to 121. U.S. deal volume increased by 47.0% to $15.45 billion, and the number of U.S. outbound deals increased by 22.7% to 119. Figure 1 and Annex Figures 5A 7A. Globally, crossborder activity in January 2018 followed similar trends to the overall market, with deal volume decreasing by 25.8% to $88.68 billion, and the number of deals increasing by 6.7% to 685. In U.S. inbound activity, was the leading country of origin for January 2018, with $14.01 billion in deal volume. retained the lead for U.S. inbound activity by dollar value over the last 12 months, with $77.20 billion in volume, and remained the leading country of origin by number of U.S. inbound deals in January (38) and over the last 12 months (410). Japan and Bermuda were the largest targets for U.S. outbound activity in January by deal volume ($6.10 billion and $6.08 billion, respectively). The U.K. was the leader in outbound deal volume over the last 12 months ($29.05 billion). took the lead in the number of U.S. outbound deals in January (25), while the U.K. retained its lead over the last 12 months (259). Figure 3. U.S. Deals by Industry Computers & Electronics was the most active target industry by dollar value in January 2018 ($34.64 billion) and over the last 12 months ($323.74 billion). Computer & Electronics also remained the most active target industry by number of deals in January (264) and over the last 12 months (2,842). Figures 2 and 5. U.S. Public Mergers As for U.S. public merger deal terms in January 2018, average target break fees was 3.4%, marginally below the 12-month average of 3.6%. Average reverse break fees was 4.6%, below the 12-month average of 5.5%. Figures 6 and 7. The use of cash consideration in January 2018 decreased to 60.0%, slightly below its 12-month average of 60.7%. Figure 9. The incidence of tender offers as a percentage of U.S. public mergers was 26.7%, above the 12-month average of 20.5%. Figure 11. Finally, the incidence of hostile offers in January 2018 was 11.1%, slightly above the 12-month average of 10.3%. Figure 12. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1

M&A Activity Figure 1 Figure 2 Most Active U.S. Target Industries 2 January 2018 Global +/- From U.S. +/- From Prior Prior Month Month January 2018 Total Volume (US$B) 324.45 (147.07) 170.57 (70.81) No. of deals 3,118 281 884 264 Avg. value of deals (US$mil) 222.4 (60.5) 555.6 (387.3) Strategic Transactions Volume (US$B) 241.62 (148.24) 108.33 (95.91) No. of deals 2,714 178 653 169 Last 12 Months Avg. value of deals (US$mil) 179.7 (72.0) 423.2 (526.8) Computers & Electronics Healthcare Food & Beverage Utility & Energy Real Estate/Property $34.64 $31.42 $29.91 $24.18 $9.44 $100 $200 $300 $400 Sponsor-Related Transactions Volume (US$B) 82.82 1.17 62.24 25.10 No. of deals 404 103 231 95 Avg. value of deals (US$mil) 726.5 34.6 1,220.4 314.6 Computers & Electronics Healthcare Oil & Gas Real Estate/Property Telecommunications $146.84 $125.26 $123.05 $272.53 $323.74 Crossborder Transactions 1 Volume (US$B) 88.68 (30.84) Inbound 39.10 15.45 No. of deals 685 43 Inbound 121 119 Avg. value of deals (US$mil) 306.9 (26.1) Inbound 575.0 482.8 Inbound 17.30 4.94 Inbound 12 22 Inbound 185.7 259.2 $100 $200 $300 $400 January 2018 Computers & Electronics 264 Professional Services 133 Healthcare 78 Finance 53 Construction/Building 39 0 500 1,000 1,500 2,000 2,500 3,000 Last 12 Months Figures 1-3 were compiled using data from Dealogic, and are for the broader M&A market, including mergers of any value involving public and/or private entities. Figures 4 and 5 were compiled using data from FactSet MergerMetrics, and are limited to mergers involving public U.S. targets announced during the period indicated and valued at $100 million or higher regardless of whether a definitive merger agreement was reached and filed or withdrawn. All data is as of February 12, 2018 unless otherwise specified. Last 12 Months data is for the period from February 2017 to January 2018 inclusive. Data obtained from Dealogic and FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss. Computers & Electronics 2,842 Professional Services Healthcare 1,192 1,006 Finance Oil & Gas 578 385 0 500 1,000 1,500 2,000 2,500 3,000 1 Global crossborder transactions are those where the acquirer and the target have different nationalities. Nationality is based on where a company has either its headquarters or a majority of its operations. U.S. crossborder transactions are those transactions where the acquirer and the target have different nationalities and either the acquirer ( ) or the target ( Inbound ) has a U.S. nationality. 2 Industries categories are determined and named by Dealogic. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 2

M&A Activity (Continued) Figure 3 Top 5 Countries of Origin or Destination for U.S. Crossborder Transactions Inbound U.S. Crossborder Transactions for January 2018 Inbound U.S. Crossborder Transactions for the Last 12 Months $14.01 $77.20 France $12.15 Japan $40.74 Bermuda $3.57 $36.57 Italy $2.80 France $26.81 Germany $2.69 Germany $17.10 $30 $60 $90 $120 $150 $30 $60 $90 $120 $150 38 410 Japan 14 Japan 183 10 177 India 8 China 113 France & Germany³ 7 France 104 0 100 200 300 400 500 0 100 200 300 400 500 U.S. Crossborder Transactions for January 2018 U.S. Crossborder Transactions for the Last 12 Months Japan $6.10 $29.05 Bermuda $6.08 Israel $17.97 Australia $1.26 Germany $15.92.45 $11.00 Brazil.45 Japan $8.79 $30 $60 $90 $120 $150 $30 $60 $90 $120 $150 25 259 Netherlands 22 11 Germany Australia 88 114 239 Germany & India⁴ 6 Netherlands 62 0 100 200 300 400 500 0 100 200 300 400 500 3 Each of France and Germany was the country of origin for seven transactions in January 2018. 4 Each of Germany and India was the country of destination for six transactions in January 2018. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 3

M&A Activity (Continued) Figure 4 Average Value of Announced U.S. Public Mergers (in US$mil) $35,000 $30,000 $25,000 $29,486.8 $26,156.3 $20,000 $15,000 $10,000 $5,000 $6,676.9 $1,426.9 $2,406.4 $1,041.0 $8,128.8 $3,051.1 $3,869.9 $1,586.1 $7,171.8 $2,232.9 $5,297.9 $4,872.3 $1,654.9 $1,778.9 $7,372.0 $8,020.2 $3,560.4 $3,194.3 $9,179.4 $10,376.8 $10,991.0 $4,156.0 Average Value of Five Largest U.S. Public Mergers Average Value of U.S. Public Mergers Figure 5 Five Largest U.S. Public Mergers January 2018 Equity Value (US$B) Dr Pepper Snapple Group, Inc. ~ Keurig Green Mountain, Inc. $20.98 (January 29, 2018) Bioverativ, Inc. ~ Sanofi $11.36 (January 21, 2018) Juno Therapeutics, Inc. ~ Celgene Corporation $9.10 (January 22, 2018) SCANA Corp. ~ Dominion Energy, Inc. $7.66 (January 3, 2018) VICI Properties, Inc. ~ MGM Growth Properties LLC $5.86 (January 16, 2018) $20 $40 $60 $80 $100 $120 $140 Last 12 Months Equity Value (US$B) QUALCOMM, Inc. ~ Broadcom Ltd. $121.39 (November 6, 2017) Aetna, Inc. ~ CVS Health Corp. $67.82 (December 3, 2017) Twenty-First Century Fox, Inc. ~ The Walt Disney Company $54.72 (December 14, 2017) Rockwell Automation, Inc. ~ Emerson Electric Co. $28.91 (October 31, 2017) (Offer withdrawn November 28, 2017) C.R. Bard, Inc. (New Jersey) ~ Becton, Dickinson & Co. $23.11 (April 23, 2017) $20 $40 $60 $80 $100 $120 $140 PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 4

M&A Terms Figure 6 Average Break Fees as % of Equity Value 5 (US$mil) 12% $15,000 10.6% $11,226.9 7.1% $10,000 6% 4.4% 4.7% 5.1% 5.8% 5.3% 5.8% 4.6% 4.6% 5.6% 5.8% 4.6% 3.6% 3.6% 3.3% 3.6% 3.4% 3.4% 3.4% 3.3% 3.4% 3.1% $4,401.7 $5,000 3.4% 0% $2,489.0 $1,184.3 $3,051.1 $1,700.1 $2,349.6 $1,693.8 $1,778.9 $3,904.6 $1,292.4 $1,545.9 Target Break Fee Reverse Break Fee Average Value of U.S. Public Mergers (in US$mil) Figure 7 Average Break Fees as % of Equity Value January 2018 Last 12 Months Figure 8 U.S. Public Merger Go-Shop Provisions January 2018 Target Break Fee for All Mergers 3.4 3.6 % of Mergers with Go-Shops 6.7 6.3 January 2018 Last 12 Months Reverse Break Fee for All Mergers 4.6 5.5 Last 12 Months % of Mergers Involving Financial 7 50.0 13.3 Buyers with Go-Shops % of Mergers Involving Strategic Buyers with Go-Shops 0.0 4.8 Reverse Break Fee for Mergers Involving Financial Buyers 6 6.5 7.0 Avg. Go-Shop Window (in Days) for All 8 25.0 35.5 Mergers with Go-Shops Reverse Break Fee for Mergers Involving Strategic Buyers 4.0 5.0 Avg. Go-Shop Window (in Days) for Mergers Involving Financial Buyers with 25.0 41.3 Go-Shops 9 Figures 6-12 were compiled using data from FactSet MergerMetrics, and are limited to select mergers involving public U.S. targets announced during the period indicated, valued at $100 million or higher and for which a definitive merger agreement was reached and filed (unless otherwise indicated). Data obtained from FactSet MergerMetrics has not been reviewed for accuracy by Paul, Weiss. Avg. Go-Shop Window (in Days) for Mergers Involving Strategic Buyers with N/A 32.1 Go-Shops 10 5 Based on the highest target break fees and reverse break fees payable in a particular deal. 6 Two transactions in January 2018 involving a financial buyer had a reverse break fee. 7 Two transactions in January 2018 involved a financial buyer. 8 One transaction in January 2018 had a go-shop provision. 9 One transaction in January 2018 involving a financial buyer had a go-shop provision. 10 No transactions in January 2018 involving a strategic buyer had a go-shop provision. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 5

M&A Terms (Continued) Return to Summary Figure 9 Form of Consideration as % of U.S. Public Mergers 11 Figure 10 % of Partial and All Stock Deals That Have a Fixed Exchange Ratio January 2018 100.0 20.0% Last 12 Months 88.1 60.0% 13.3% 6.7% Cash Only Stock Only Figure 11 Tender Offers as % of U.S. Public Mergers January 2018 26.7 Last 12 Months 20.5 January 2018 22.7% Cash & Stock Only Choice (Cash Election) Other Figure 12 Hostile/Unsolicited Offers as % of U.S. Public Mergers 12 January 2018 11.1 Last 12 Months 10.3 60.8% 10.8% 5.7% 11 Due to rounding, percentages may not add up to 100%. 12 This data includes both announced transactions for which a definitive merger agreement was reached and filed and those for which a definitive merger agreement was never reached and filed (including withdrawn transactions). Last 12 Months Paul, Weiss is a leading law firm serving the largest publicly and privately held corporations and financial institutions in the United States and throughout the world. Our firm is widely recognized for achieving an unparalleled record of success for our clients, both in their bet-the-company litigations and their most critical strategic transactions. We are keenly aware of the extraordinary challenges and opportunities facing national and global economies and are committed to serving our clients short- and long-term goals. Our Mergers & Acquisitions Practice Our M&A Group is among the most experienced and active in the world. We represent publicly traded and privately held companies, leading private equity firms, financial advisors, and other financial institutions and investors in their most important mergers and acquisitions, joint ventures and other strategic transactions. Our expertise advising corporations and private investors in a broad range of sophisticated transactions enables us to identify new opportunities for our clients to realize value. We have particular experience in guiding clients as they engage in proxy battles, company-altering and market consolidating transactions or capital markets transactions. Recent highlights include advising: CSRA in its $9.6 billion acquisition by General Dynamics; Xerox in its $18 billion combination with Fuji Xerox, a joint venture between Xerox and Fujifilm; Bioverativ in its $11.6 billion acquisition by Sanofi; ADP in its successful proxy contest against Pershing Square; Qualcomm in connection with a $130 billion unsolicited offer from Broadcom; Kate Spade & Company in its $2.4 billion acquisition by Coach; Qualcomm in its approximately $47 billion pending acquisition of NXP Semiconductors; Agrium in its $36 billion merger of equals with Potash Corp. of Saskatchewan; funds affiliated with Apollo Global Management and Protection 1 in their $15 billion acquisition of ADT Corporation and Alere in its $5.3 billion acquisition by Abbott Laboratories. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 6

This publication is not intended to provide legal advice, and no legal or business decisions should be based on its content. Questions concerning issues addressed in this memorandum should be directed to: Matthew W. Abbott Partner New York Office +1-212-373-3402 Email Scott A. Barshay Partner New York Office +1-212-373-3040 Email Angelo Bonvino Partner New York Office +1-212-373-3570 Email Ariel J. Deckelbaum Partner New York Office +1-212-373-3546 Email Jeffrey D. Marell Partner New York Office +1-212-373-3105 Email Counsel Frances F. Mi and associates Ryan D. Blicher, Edy Glozman, Vincent P. Iacono, Paul A. Nolle III, David Okada, Yae Na Woo and Michael N. Wysolmerski contributed to this publication. Our M&A Partners Matthew W. Abbott Adam M. Givertz Xiaoyu Greg Liu Tarun M. Stewart Edward T. Ackerman Neil Goldman Jeffrey D. Marell Steven J. Williams Scott A. Barshay Bruce A. Gutenplan Alvaro Membrillera Ramy J. Wahbeh Angelo Bonvino Justin G. Hamill Judie Ng Shortell Betty Yap Jeanette K. Chan David M. Klein Kelley D. Parker Kaye N. Yoshino Ellen N. Ching David K. Lakhdhir Carl L. Reisner Tong Yu Ariel J. Deckelbaum Stephen P. Lamb Kenneth M. Schneider Taurie M. Zeitzer Ross A. Fieldston John E. Lange Robert B. Schumer Brian P. Finnegan Brian C. Lavin John M. Scott NEW YORK BEIJING HONG KONG LONDON TOKYO TORONTO WASHINGTON, D.C. WILMINGTON PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP PAULWEISS.COM 2018 Paul, Weiss, Rifkind, Wharton & Garrison LLP. In some jurisdictions, this publication may be considered attorney advertising. Past representations are no guarantee of future outcomes. 7

A N N E X M&A Activity 12-Month Trends Figure 1A U.S. Deal Volume (US$B) $400 $300 $255.92 $241.39 $200 $223.56 $100 $119.36 $97.56 $68.89 $90.75 $71.57 $46.21 $26.00 $22.68 $28.61 $94.90 $99.38 $96.33 $60.15 $64.94 $48.88 $46.03 $34.44 $36.18 $137.34 $78.42 $58.92 $204.25 $91.96 $84.95 $81.36 $56.29 $10.59 $28.66 $32.36 $37.14 $170.57 $108.33 $62.24 Strategic Sponsor Total Figure 2A Global Deal Volume (US$B) $600 $500 $471.52 $409.76 $400 $324.45 $300 $279.67 $268.36 $270.34 $271.33 $296.05 $294.52 $295.70 $274.95 $356.05 $389.86 $200 $179.44 $215.75 $208.06 $189.47 $196.82 $200.57 $208.69 $231.69 $213.35 $241.62 $100 $134.27 $45.17 $63.92 $60.30 $80.86 $74.51 $95.47 $85.83 $64.00 $61.61 $53.70 $81.65 $82.82 Strategic Sponsor Total PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP A-8

A N N E X Figure 3A U.S. Number of Deals 1,000 800 887 951 777 905 785 782 883 950 848 722 884 600 400 704 782 624 730 665 635 704 779 651 544 620 484 653 200 183 169 153 175 120 147 179 171 197 178 136 231 0 Strategic Sponsor Total Figure 4A Global Number of Deals 4,000 3,200 2,400 3,090 2,718 3,797 3,408 3,049 2,705 3,511 3,584 3,116 3,267 3,419 3,313 3,049 2,958 3,618 3,233 3,303 2,923 3,031 2,674 2,837 2,536 3,118 2,714 1,600 800 0 372 389 344 395 317 370 355 385 380 357 301 404 Strategic Sponsor Total PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP A-9

A N N E X Figure 5A Inbound U.S. Crossborder Transactions $60 200 $50 $40 $30 $20 $10 161 156 152 143 138 130 133 130 126 126 $36.96 $22.11 $32.58 $11.83 $14.60 $20.81 $15.20 $16.27 $13.29 $49.56 109 121 $21.80 $39.10 150 100 Figure 6A U.S. Crossborder Transactions $100 200 $80 $60 $40 143 135 108 106 146 132 127 138 131 96 97 119 150 100 $20 50 $11.45 $22.23 $6.62 $6.56 $13.77 $26.60 $8.08 $15.47 $8.67 $5.52 $10.51 $15.45 0 Figure 7A Global Crossborder Transactions $250 $200 $150 793 874 699 806 862 870 739 802 731 676 642 685 1,000 $100 500 $50 $72.67 $94.66 $84.33 $83.36 $78.28 $118.60 $66.59 $96.82 $103.35 $84.30 $119.52 $88.68 0 PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP A-10