M&A Insights Q4 2015

Insights, Q4 2015
www.allenovery.com/mainsights
M&A Insights | Q4 2015
Allen & Overy LLP 2015
Contents
4
6
8
18
28
Executive summary
4 Executive summary
5 Global M&A in numbers
In focus
6 Hostile M&A
a notable feature of 2015
Regional insights
9 U.S.
10 Western Europe
11 CEE and CIS
12 Middle East and North Africa
13 Sub-Saharan Africa
14 India
15 Latin America
16 Asia Pacific
Sector insights
19 Consumer

20 Energy and Infrastructure
21 Financial services
22 Life sciences
23 Mining
24 Private equity
25 Telecoms, media and technology
A global snapshot
28 Top 20 global outbound acquirers
and inbound target markets
30 Top target markets for the
worlds largest acquiring countries
Executive summary:
Investors push deals to record levels
Investors have continued to hold their nerve amid signs of growing economic and
political uncertainty, with big-ticket M&A deals pushing transactions to record levels.
2015 highlights include:
Record-breaking
year for global M&A
Growing boardroom
confidence
With the deal-making environment remaining strong,

transactions in 2015 have risen to record levels and we
end the year ahead of the previous M&A high of 2007.
Ready availability of debt finance, record levels of

corporate cash, supportive shareholders, and, perhaps,
a determination not to be left behind, has given
boardrooms the confidence to pursue significant strategic
transactions across a growing number of sectors.
Cross-border
activity on the rise
PE returns to
the buyout market
With globalisation continuing to be a major driver of

M&A, cross-border deals have accounted for around
a third of all total deals this year a trend that we
think will persist in 2016.
After several years focussing mainly on securing exits,

PE funds are now once more returning to the buyout
market and contemplating increasingly complex deals,
backed by record levels of funding.
Mega-deals to the fore
Tax still a driver
Big-ticket transformational M&A deals have been a

dominant theme. 2015 ended with both the USD130bn
merger of The Dow Chemical Company and E. I. du
Pont de Nemours, as well as the proposed USD160bn
merger of Pfizer and Allergan, the largest single
transaction of 2015 and the biggest pharma deal ever.
Despite growing opposition from across the political

spectrum, U.S. companies are still looking to do
tax-driven deals including inversions with the
aim of investing overseas earnings rather than
repatriate them and face a high tax bill.
Powerful U.S. performance
Chinas private companies seek

outbound opportunities
The U.S. market continues to power ahead in an

extraordinary way, providing the rocket fuel for
growth in other key regions.
Have the life sciences

reached a peak?
With some USD980bn worth of deals done in the life
sciences sector in the last two years, the question
is: will investors now take a pause for breath while a
range of massive deals are digested? The jury is out.
As the deployment of Chinese capital across the world

increases, privately-owned companies are increasingly
looking for outbound opportunities and are proving
more fleet of foot than big State-owned Enterprises.
Continued growth in 2016?

Big ticket M&A looks set to continue. We also
expect to see the ripple effect of those mega deals
lead to an increase in mid-size M&A as businesses
reshape their portfolios and dispose of non-core
assets. PE will be a major buyer as these
divestments come onto the market.
Global M&A in numbers 2015

Top 5 sectors by value (USD)
Increase in megadeals
USD5bn +
735bn
599bn
TMT
Life sciences
96
deals Q1-Q4 2014
131
vs
deals Q1-Q4 2015
Activity by deal value (USD)

5bn +
2%
536bn
3-5bn 1%
Energy
491bn
407bn
Consumer
Financial
Services
1-3bn
4%
500m-1bn
5%
0-500m
88%
Deal volumes by region
33%
28%
3%
13%
1%
3%
Over
25%
1%
Between
10% and
25%
3%
Less
than
10%
14%
Region
% of deals
by region
Western Europe
33%
U.S.
28%
Asia Pacific
14%
Greater China
13%
CEE and CIS
3%
India
3%
Latin America
3%
MENA
1%
Sub-Saharan
Africa
1%
Other
1%
Note: These figures represent the total number of deals announced between 1 January 2015 and 11 December 2015.
Hostile M&A
a notable feature of 2015
The return of big-ticket M&A has brought with it a
notable number of high-profile hostile and semi-hostile
public M&A deals.
But just how common are they and in which countries
are they occurring? How are they being structured?
What factors are influencing deal outcomes?
And finally, how do they play out?
his year, there have been around

56 hostile/semi-hostile deals globally1.
This is similar to last year, though the
overall proportion of these types of
deals to recommended deals remains low globally.
That said, hostiles and semi-hostiles are a notable
fixture of some markets.
One standout market is the U.S. where hostile bids
remain a common tactic, despite them rarely being
successful. A typical outcome in the U.S. is that
as a result of putting a target in play, the target
will end up being acquired by a white knight.
Given the significant role that activist investors
have been playing in driving corporate policy,
including proposals to dismantle traditional and
common defences such as shareholder rights
plans, we expect levels of hostile bid activity to
remain significant in this market.
Australia and the UK have also seen notable
numbers of hostile/semi-hostile deals in recent
years. In the UK, in particular, bear hug proposals
(ie where a potential bidder announces a possible
offer for a target conditional on the target boards
recommendation but without the targets backing)
have been more common and have involved
potential bidders appealing to target shareholders
to put pressure on their boards to engage.
Big international players have been eager to

elicit co-operation and ultimately secure
recommendations where there may be significant
antitrust issues and where, therefore, co-operation
from targets is either desirable or necessary. The UK
put up or shut up rules and the prohibition of deal
protection arrangements in favour of bidders have
given targets considerable leverage in negotiations,
so even where they have ended up recommending
a deal, in some cases they have been able to extract
substantial break fees (or so-called reverse break
fees) and other deal protections as a price for their
recommendations. For example, in AB InBev/
SABMiller, AB InBev has agreed to pay a USD3bn
reverse break fee in certain circumstances.
In contrast, France, Germany, Singapore and
Hong Kong have seen low levels of hostile bid
activity in recent years and one important
influencing factor for this has been structural
issues. Companies are often closely held in
France, Singapore and Hong Kong, which
makes it difficult to execute hostile offers
successfully. While in Germany, it can be
difficult for successful hostile bidders to obtain
management control because of restrictive rules
on the appointment and removal of directors.
the competing bids by Dollar General and

Dollar Tree for Family Dollar (2014). Pershing
Squares active participation in Valeants campaign
to take over Allergan (2014) went a step further
with Pershing Square pairing up with Valeant
to make the bid for Allergan.
Reflecting the uptick in cross-border M&A,

foreign bidders have featured in around 40%
of hostile and semi-hostile deals this year2.
While in the hostile/semi-hostile space this
might be expected to prompt protectionist
tendencies by individual countries, in practice
the overall proportion of cross-border M&A
deals that are blocked or hampered as a
result of protectionism is relatively small.
More recently, some of the bigger hostile/semihostile deals have been structured as securities
exchange offers, bringing a different bid defence
dynamic into play. The rules and use of profit
forecasts and other financial statements by parties
to support their position vary quite considerably
between markets. These rules sometimes apply to
forecasts/cost savings statements that the target
believes it can achieve if it remains independent.
In addition, one approach that has featured in
some bids in the UK and U.S. markets has been
for targets to state publicly the price level at which
they might entertain an offer.
On a related note, shareholders have been
increasingly vocal about what they expect targets
to do in response to an offer and have been more
willing to make their views known at an early stage.
In the U.S., activists have played a significant role in
shaping the responses of target boards, seen in
Activists and proxy advisers are having an important

impact on bid outcomes in some markets and are
challenging traditional views about which markets
offer the most protection to targets. For example,
targets in France and the U.S. are quite often
unable to take up the full rights or default
protections available to them (eg the ability to
put in place poison pills) because of pro-shareholder
rights campaigns by proxy advisers and activists.
As a result, for example, most French companies
have opted out of the rule which gives long-term
shareholders automatic double voting rights.
While in many markets targets enjoy flexibility
ahead of an offer (eg Germany, Hong Kong,
Singapore and the U.S.), in most markets the
freedom of action when a bid is underway is
more limited. The Netherlands is an exception,
where targets enjoy considerable flexibility not
only ahead of a hostile bid (86% of the biggest
companies on Euronext Amsterdam have some
form of defensive measure in place3) but also when
one is already in progress. Protective preference
shares featured as a key part of Mylans defence
in the bid by Teva earlier this year and as part of
KPNs defence of Amrica Mvils bid in 2012.
Although a significant number of hostile or
semi-hostile deals have failed in recent years,
with strong drivers in place for public M&A in
the short- to medium-term, we expect these
deals to remain a fixture in certain key markets.
If you would like a detailed briefing on our
analysis of international trends in hostile
public M&A, please speak to your usual
A&O contact.
1 Source: Dealogic M&A Analytics data available as at 14 December 2015.
2 Ibid.
3 As at 14 December 2015.
Regional insights, Q4 2015

Regional insights
No other region has performed as strongly as the U.S. in a record-breaking year for
transactions, but that performance has had a knock-on effect in Western Europe and Asia.
Deals may not be as huge, but big-ticket strategic M&A still dominates these markets too.
U.S.
Big deals predominate

The 2015 global M&A boom that has lifted global
transaction values above their previous 2007 high has
been underpinned by continued strong growth in activity
in the U.S. market.
And with 2015 drawing to a close with both the USD130bn
merger of The Dow Chemical Company and E. I. du Pont
de Nemours, as well as the proposed USD160bn merger
of Pfizer and Allergan, the largest single transaction of
2015 and the biggest pharma deal ever the signs are
we will see more of the same in 2016.
Similarly, in the cable TV industry, threatened by the

growing tendency of customers to cut the cord and opt
for streamed, on-demand content, the desire to build
scale and compelling programming has never been
greater a significant factor behind the proposed
USD55bn merger of Time Warner Cable and
Charter Communications.
Elsewhere and across sectors, companies have gone on
the offensive, seizing the moment to seal transformational
deals that reinforce their market position and offer the
chance to control costs and deliver extra value to
shareholders. Having taken his eponymous company
private, Michael Dell and his partners at Silver Lake
agreed to buy EMC for approximately USD67bn, driven
in large part by the hope that the combination in private
hands of hardware and software will create a formula for
success in a rapidly evolving technology sector.
An overriding theme of the year has been the

predominance of big strategic deals in the U.S. market,
a trend that includes notable transactions in the life
sciences and TMT sectors but also reflects strategic
consolidation in other industries, including food,
drinks and beverages, retail and energy.
Activists continue to play an important role as a catalyst

for M&A. Carl Icahn has argued that American
International Group should be split three ways, while
JANA Partners is pressuring Qualcomm to split into two.
The boardroom confidence to do these mega-deals

has been supported by strong economic fundamentals,
low interest rates, ready availability of debt financing and
strong corporate cash balances. Countervailing trends
such as the effects of a slowing Chinese economy and
significant geopolitical risks have not so far caused
dealmakers to lose their nerve.
The boardroom confidence

to do these mega-deals
has been supported
by strong economic
fundamentals.
A consistent theme for these deals has been securing

cost synergies, greater efficiencies and the benefits of
economies of scale. But they separate out into both
offensive and defensive strategies.
In industries challenged by disruptive forces, one of
the principal motivations for transformational deals
has been defensive. Most companies serving the
energy and resources sector face the challenge of
coping with sharply lower oil and other commodity
prices and are seeking ways to reduce costs including
through operational synergies one of the reasons
cited by management for pursuing the USD33bn
takeover of pipeline operator Williams by Energy
Transfer in the third quarter.
The Pfizer/Allergan transaction demonstrates that tax

inversion deals remain achievable, despite growing political
opposition and efforts by the authorities to close
loopholes, which are likely to increase now. But for U.S.
companies that earn a significant proportion of their profits
overseas and are reluctant to repatriate those earnings
only to face a hefty tax bill, the search for mergers that
allow them to achieve these tax gains will continue a while
longer. The question is can they find merger of equals
candidates outside the U.S. that allow them to meet
tighter requirements for inversion transactions.
10
Despite high profile deals such as Carlyles acquisition of

Veritas from Symantec, less PE fund activity in the U.S. is
focused on new buyouts a contrast to other markets,
like Europe, where funds are once more seeking
opportunities to deploy their arsenal of dry powder.
Having said that, some of the years larger deals have
been driven in part by funds, not least the giant Heinz/
Kraft merger and the USD66bn enterprise IT tie-up
between Dell and EMC.
The U.S. market enters 2016 on a very strong note
that for the moment, at least, shows no signs of flagging.
Commodity deals may be hampered by further declines
in commodity prices that could cause a mismatch
of buyer and seller expectations, tech deals may be
frustrated by overvaluation on the equity markets,
and the progress PE funds make will be dependent
on the effect of the rise of the interest rates. But overall,
the drive for cost synergies and economies of scale,
plus activist pressure, appear set to keep transactions
moving ahead.
Western Europe
Will growth peak?

The impetus provided by the powerful U.S. M&A market
has certainly had a knock-on effect in Western Europe
with transactions growing strongly throughout the year,
dominated by big strategic deals.
In Germany the growth was particularly strong in the first
half of 2015, but reached something of a plateau in the
last six months. Big-ticket deals here were matched by
growing activity in the mid- and small-cap markets,
where strong pipelines have built up. PE funds remained
active during the year, although they continued to be
reluctant to take on confident, well-financed corporates
with the firepower to price in synergies.
Hostile M&A, rarely a feature of the German market,
also became more apparent as the transactions
market grew, as we saw with Potash Corps ultimately
unsuccessful USD8.8bn bid for K+S. Vonovia also
intervened in a long-running real estate battle,
bidding EUR10bn for its smaller rival, Deutsche Wohnen
and forcing it eventually to drop its own EUR4.6bn
bid for LEG.
Here, as elsewhere in the region, the main motivating
factors behind higher activity have been the availability
of debt and a surplus of corporate cash needing to be
invested, as well as a realisation by boards that M&A
offers the fastest way to grow in a relatively low-growth
environment. Unlike in the UK and the Netherlands,
German investors showed growing nervousness about
the capital markets as the year wore on, however.
By contrast the successful IPO of Dutch bank ABN Amro

was widely seen as a mark of growing confidence in the
wider economy. There had been some doubt about
whether this transaction would go ahead successfully,
but the first offering of shares raised EUR3.3bn as the
Dutch government began recouping money invested in
rescuing the bank during the financial crisis. More widely,
weve seen more IPO activity here than for a number
of years.
Standout big-ticket M&A deals during the year included
the proposed GBP47bn Shell/BG transaction and the
giant USD120bn brewing merger between AB InBev
and SABMiller, alongside transformational cross-border
deals such as the strategic tie-up between the main
bottlers of Coca-Cola in Europe.
There has been a sharp uptick in activity by inbound
investors, notably from the U.S. and from privately
owned Chinese companies prepared to bid aggressively
for sought after assets. Their interest is across sectors
but is particularly focused on distressed assets that can
be bought relatively cheaply. A weaker euro has affected
valuations, but other factors are at play here for Chinese
companies a desire to diversify into new markets
and the search for brands and technologies that can
be exploited at home.
There has been a sharp

uptick in activity by inbound
investors, notably from the
U.S. and from privately
owned Chinese companies
prepared to bid aggressively
for sought after assets.
And as the giant USD160bn Pfizer/Allergan deal proved,
U.S. companies particularly those with strong
overseas earnings are still looking for inventive ways to
do tax inversions despite growing political disapproval at
home, with Ireland and the UK seen as key jurisdictions
in which to redomicile.
TMT was one of the most active sectors in the Italian
market during 2015 and the announcement of the
acquisition by billionaire Xavier Niel of a EUR1.7bn stake
in Telecom Italia S.p.A., Italys largest phone company,
confirmed this trend. We expect further developments in
2016, including examination of the merger between
Hutchison Whampoas 3 Italia and Vimpelcoms Wind,
and Telecom Italias asset sale strategy to reduce a debt
load of some EUR27bn.
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The main motivating factors behind higher activity

have been the
availability
of debt and a surplus of corporate cash

needing to be invested.
The fourth quarter of 2015 has followed the general
trend of the previous three, with Italian M&A dominated
by investments in medium-sized companies, especially
in retail, food and consumer goods, including clothing.
There have been several significant energy deals
approval for the integration of Enel Green Power into
Enel, for instance, and Fondo Strategico Italianos
agreement to acquire a 12.5% interest in Saipem
S.p.A. from Eni. Real estate has also been busier.
Following the part privatisation of Enel and Poste
Italianes IPO, we expect state sell-offs will continue
in 2016. Ferrovie dello Stato has officially started its
40% privatisation process and Enavs 49% stake
will probably be listed in the first half of the year.
By and large, it seems investors seem to have any
macro-economic fears under control although the
upcoming UK referendum on EU membership could
prove increasingly disruptive if a vote for Brexit looks likely.
More immediately, emergency measures to counter the
terror threat could have a bigger impact on confidence.
Against that background the outlook for 2016 looks
somewhat mixed. Boardroom confidence to do deals
seems largely undiminished, cash and financing remain
readily available and the economic environment remains
good for transactions. However, with so many big
transactions completed in 2015, we could see some
investors take time out to digest those deals. In Germany
there is also a chance that diminished confidence in the
capital markets could lead to a growing wariness among
M&A investors.
But with globalisation still a main driving factor behind M&A
activity, we are confident that the outlook for significant
cross-border transactions will remain positive in 2016.
CEE and CIS
New signs of life?

In early 2015, the political instability generated by the
Ukraine crisis had an impact well beyond Russias
borders, depressing investor enthusiasm and dampening
M&A activity across the CEE region as well. But as 2015
progressed, that changed, with a number of markets in
Central and Southern Eastern Europe showing new
signs of life.
We expect that decoupling to continue in 2016,
with activity in Russia continuing at a relatively low ebb,
but with the CEE region experiencing faster growth amid
increasingly strong economic fundamentals in some key
economies. We saw transaction activity across C&SEE
in 2015 being dominated by the TMT sector, with other
transactions in traditional sectors of energy and financial
services still playing a big part, though less so than in
previous years. Consumer/retail and healthcare are
also strong alongside a resurgent real estate sector.
We would expect these trends to continue.
Nowhere is that more true than in the Czech Republic,
currently enjoying strong GDP growth and low
unemployment and seeing a resurgence of significant
M&A activity in key sectors. Standout deals in recent
months have included the EUR1.25bn acquisition of
Czech tyre maker CGS by Swedish industrial
conglomerate Trelleborg and Rockway Capitals
EUR200m acquisition of the Czech Republics second
biggest e-commerce operator, Mall, and the price
comparison service, Heureka.
12
Events in Hungary continue to be dominated by the

governments strategic ambitions, including in particular
the renationalisation of key assets, notably in the energy
and utilities sectors. There has also been a slew of
acquistions in the financial institutions sector, as well as
the exertion of increasing influence over the media sector
including, indirectly, media M&A. Its stance on energy
and utilities is unlikely to change much in 2016 it
remains convinced that it needs to exercise greater
control over these key assets.
But we could see some sort of shift where banking is
concerned. Some believe the governments plan to
work alongside the European Bank of Reconstruction
and Development to buy stakes in Erste Bank Hungary
could mark a turning point and that 2016 could see it
once again opening the door to private investment in the
sector, rolling back some of its acquisitions (a process
which has to some extent already started). Otherwise, we
see a lot of activity being considered through an increasing
number of joint ventures and private equity starting to look
at Hungary again, after a hiatus.
Elsewhere in the region the trend for governments to sell
assets to raise much needed funding continues although
the process is not always smooth, as we have seen with
the failed sales of both Telekom Slovenia and Telekom
Srbija. PE funds are once again circling the market, many
looking for new investment opportunities outside
well-mined economies such as Poland. Sales of
non-performing loan portfolios are also a feature with
processes already started in Slovenia and expected
soon to go ahead in Serbia and Croatia.
Sanctions, poor economic growth, depressed oil
prices and political interference continues to depress
activity in Russia, although its fair to say that there is
sufficient stability in this new environment to encourage
some investors to seek out opportunities.
A number of markets
in Central and Southern
Eastern Europe are
showing new signs of life.
With access to Western financing effectively blocked
off by sanctions, Russia is increasingly looking to other
regions for funding, not least China, India and the Middle
East. Some outbound investment continues as weve
seen with Rosnefts continued investment in the German
refining sector, alongside its existing joint venture with BP
there. Inbound European and U.S. investment is subject
to significant delay and even cancellation, however.
Privatisation remains on the cards, but we do not expect

to see much progress on this in the near-term particularly
at a time when assets are likely to be considerably
undervalued. Any such moves in 2016 are likely to
be one-off transactions, rather than part of a wider
programme of state sell-offs.
Middle East
and North Africa
Consolidation continues
The final quarter of 2015 opened with a drop in deal
volume while values inched higher, albeit down against
the same period in 2014. The majority of deals were
smaller in scale, with the trend of consolidation and
strategic transactions seen in earlier quarters continuing,
through acquisitions of minority stakes and increases in
existing shareholdings.
Economic growth in the

region, together with positive
demographic trends and
proximity to expanding
markets in Africa, are all
likely to be instrumental in
continuing to attract
international investors.
Global market volatility and continuing regional political
turmoil inevitably have had an effect on investors, but they
are for the most part holding their nerve. Cash and liquidity
levels in the region, particularly in the Gulf Corporation
Community (GCC), remain high, largely as a result of years
of high oil prices. On the whole, governments in the GCC
have sufficient reserves to remain committed to key
projects. GCC-based corporates appear to be eyeing the
wider MENA region for opportunities not only to increase
returns and get a foothold in less developed markets
within MENA, but also to reduce their reliance on domestic
markets. The regions sovereign wealth funds are also
engaging in deals which are more strategic, investing
money with the aim of providing income for future
generations as part of a general diversification strategy.
There is improving confidence amongst market
participants, both globally and regionally. There is a
feeling that those regional economies dependent on the
hydrocarbon industry are weathering the storm and that a
13
good pipeline is developing, particularly in the UAE. There

are also signs in the market that valuation expectations are
becoming more reasonable, which, when coupled with the
availability of cash and financing, should help create an
environment where more deals are done.
Economic growth in the region, together with positive
demographic trends and proximity to expanding markets
in Africa, are all likely to be instrumental in continuing
to attract international investors, particularly in the
face of fewer opportunities in the U.S. and in Europe.
Saudi Arabia, the UAE and Egypt were among the
most active countries during Q4, with Egypt continuing
to emerge as an attractive destination for overseas
investment. Whilst regulatory complexities in some
parts of the region can act as a deterrent for investors,
Egypt has recently introduced policies friendly to
business. It is currently enjoying increased political
stability and as a net oil importer is believed to be
benefitting from the continuing lower oil prices.
Elsewhere in the region, the opening of the Saudi
Stock Exchange to foreign investors may also lead
to an increase in cross-border activity.
International PE investors interest in the region continued
in Q4. In one of the stand-out deals of the quarter,
U.S.-based PE houses Warburg Pincus and
General Atlantic announced a deal to acquire 49%
of Network International (NI) from a consortium led
by the Abraaj Group. NI is the largest payment processor
in the region. It is believed to be the first investment by
General Atlantic in the region, whilst Warburg Pincus has
already shown its interest in the region with its acquisition
of a majority stake in Dubai-based Mercator last year.
In one of several deals in the healthcare sector during
the quarter, UAE-based Aster DM Healthcare increased
its 40% holding in Saudi Arabia-based Sanad Hospital
to 97%, for a consideration of USD245m. The healthcare
sector has led Saudi M&A activity this year, a reflection
of the increased demand for services in this sector
that local population growth is creating. Activity in
the telecoms sector is expected to continue and,
in another Saudi-related deal, Saudi Telecom announced
its intention to make an offer to increase its 26%
shareholding in Kuwaiti mobile operator Viva to 100%.
The deal would be worth approximately USD1.1bn and is
subject to consent from the Kuwait Capital Markets
Authority. Viva is Kuwaits second largest telecoms
operator and was listed on the Kuwait Stock Exchange in
December 2014.
With the ease of doing business in many countries
in the region increasing and a good flow of deals in
the pipeline, the outlook is positive and, despite the
challenges, there are certainly opportunities to be had.
Sub-Saharan Africa
Preparing for future growth

Dealmaking activity in the region has been relatively
muted throughout 2015, but as the year draws to a close
there are signs of increased activity in key markets and
sectors. With increased levels of capital being built up to
invest across the continent, 2016 should be a livelier
period for transactions.
A disappointing performance in 2015 is, however,
understandable. Investment into Africa has traditionally
been primarily focused on the resources sector and
so the fall in oil and other commodity prices and a
slackening of demand from key markets, notably China,
has hit Africa particularly hard.
In certain markets the global decline in commodity
prices has been exacerbated by local difficulties.
South Africa, for instance, remains a tricky market
for resources investment, thanks to government
interference, labour problems and regular power
outages, all of which continue to be problematic
for the mining and energy sectors.
Other traditionally strong sectors are faring better,
however, notably telecoms where we continue to
see a good stream of both infrastructure deals and
the sort of consolidation between operators that
has become such a feature in European markets.
Investment in power and

transport infrastructure
remains a pressing need
across the region and a
potential key focus for
inbound investment.
This year weve seen Swedens Millicom become
the second largest operator in Tanzania, having acquired
an 85% stake in Zantel from the UAE telecom operator,
Etisalat. PE Fund Helios has also acquired a 70% stake
in Telkom Kenya from Orange for an undisclosed sum.
Further deals are on the cards in the year ahead.
Investment in power and transport infrastructure
remains a pressing need across the region and
a potential key focus for inbound investment.
14
Such investment can act as a real spur to economic

growth but requires governments to create the right
legal and commercial frameworks for projects to
proceed. In South Africa we expect the government
to clarify its approach to inward investment in a number
of crucial areas, not least foreign ownership of land,
which should, hopefully, boost investor confidence.
Investment in less traditional areas consumer goods,
retail and financial services is also full of potential,
as economies grow and the middle-class expands.
A number of PE Houses have established specialist
Africa funds to pursue opportunities, including Carlyle,
KKR, Blackstone, Helios and Dubai-based Abraaj.
The appetite to invest is certainly there but a scarcity
of good assets remains an obstacle, albeit probably
a relatively short-term one.
Investors within the region are also looking for
opportunities across the continent and overseas.
South African investment house, Brait, for instance,
completed two important UK deals during the year,
acquiring fashion retailer, New Look, and a controlling
interest in Virgin Active, the health and leisure business.
A further deal involving Brait was its sale, together with
the Titan Group, of 92.34% of Pepkor, to Steinhoff
International Holdings.
We continue to see capital flowing more freely within
the region. Nigerias ambitious industrial conglomerate,
Dangote Group, has announced plans to expand its
operations, particularly cement making, into a number
of African countries.
As the year ended we also saw South Africas Sanlam
spend USD375m to acquire a 30% stake in Moroccos
Saham Finances as part of an effort to find new North
and West African markets for its insurance products
to offset slower growth at home.
With key African economies forecast to see some
of the highest growth in GDP in the coming years,
we continue to believe that the current dip in transactions
activity will be short-lived, with activity beginning to
grow again, both in terms of M&A deals and
IPO activity, starting in 2016.
INDIA
Growth slowly builds

High expectations that the 2014 election of a majority
government, led by Narendra Modi, would lead to a
period of rapid economic reform and a return to strong
growth were, perhaps, always a little overblown and the
months since have proved that to be the case.
The government continues to make progress with its
reform agenda, but it has proved harder to push through
measures than many had expected and that has
translated into some investor uncertainty and fairly

sluggish growth in the M&A market.
2015 saw the volume of M&A deals climb to 442,
with energy and natural resources, life sciences,
IT and IT enabled services being the busiest sectors
for transactions. With deal values at USD37.1bn this is
a robust performance compared with many other
emerging markets.
Activity by PE firms, however, has been much stronger
this year with funds deploying capital across a wide
range of sectors. Indeed there were an estimated
462 PE deals in 2015 worth some USD13.6bn,
a 40% increase in value on the same period last year.
PE deals done so far in 2015 have included some of a
very good size, including Carlyles USD500m investment
in Magna Energy, the upstream oil and gas company,
and DST Globals USD400m investment in Olacabs,
the online cab and car rental group owned by
Mumbai-based ANI Technologies.
We expect the overall

position to improve
in 2016.
We expect the overall position to improve in 2016,
with PE continuing to make a strong showing and
corporate transactions picking up too.
But progress is likely to be relatively slow and much
will depend on the governments success in making
further progress with important reforms to attract
foreign investment.
That effort has not been helped by recent regional
elections in Bihar, Indias third most populous state,
which saw Mr Modis BJP party suffer an unexpected
and fairly convincing defeat. While some believe that has
taken some of the momentum out of the reform agenda,
there is little sign of the government changing course and
the expectation remains that crucial new legislation will
still make it through Parliament.
One measure is particularly important the introduction
of a national goods and services tax to replace a
complex system of regional taxes. A bill to introduce
the tax is pending.
The governments Make In India campaign smoothing
the way for foreign manufacturers to invest in ventures
in India should also have an important and beneficial
impact on direct investment and feed through to higher
levels of transactions. Mr Modis commitment to making
a success of this campaign has been underpinned by
an almost non-stop round of foreign missions to attract
investment and open new trading routes during his first
18 months in power.
15
Economic and political issues
conspired
to dampen investor
confidence in the region.
Latin America
Awaiting
a turnaround
2015 was a difficult year for transactions across Latin
America, as a range of economic and political issues
conspired to dampen investor confidence in the region.
Despite the Presidential elections later in 2015 and
Ms Dilmas re-election, Brazil found itself wrestling
with a growing political crisis as the year unfolded,
compounded by sharply declining GDP growth,
increasing inflation, growing unemployment,
slow progress on much needed economic reforms
and a Petrobras corruption crackdown (the so-called
Car Wash scandal). Investors continue to look for
political certainty.
Activity in Argentina also slowed ahead of elections
there, although with the new Macri government
which is clearly determined to turn round economic
performance in place we expect to see activity
pick up now. Peru too has elections in 2016, and activity
has been quieter while investors anticipate the outcome.
Add to all this a number of external factors not least the
downturn in commodity prices, reduced demand from
China for natural resources and the effect of the rise
in U.S. interest rates and its not hard to see why
investors have been increasingly nervous about
buying assets in the region.
Nevertheless weve seen some significant transactions.

Some of these have involved local players buying out
foreign investors, with the most significant deal being
the USD5.2bn acquisition of HSBCs Brazilian banking
operations by Banco Bradesco. There has also been
a good spread of domestic deals, including the
USD710m sale by Camargo Correa of Alpargatas,
the public company that includes Havaianas, the iconic
Brazilian shoemaker famous for its fashion flip-flops,
among its interest. The buyer is J&F, the Brazilian
conglomerate that also controls JBS, the worlds
biggest beef producer.
Investors continue to
look for political certainty.
Despite devaluation of the real and lower asset prices,
Brazil is still not seeing the expected upsurge in inbound
investment, although we did see Coty buy the Brazilian
cosmetic division of Hypermarcas for USD1bn and
Chinas HNA invest USD450m in a 23.7% stake in
the airline Azul. The tobacco giant, BAT, also spent
USD2.45bn to buy out the shares it did not already
own in Souza Cruz to carry out its plans to delist the
company and take it private.
Mexico benefiting from faster progress on economic
reforms, notably in the power and energy sector,
and its close ties with the U.S. economy has been
more successful in attracting investment across a
16
number of sectors, including oil and gas, telecoms

and manufacturing. U.S. investment is, for obvious
reasons, in the lead here, but we are beginning to
see growing interest from Western Europe,
especially Spain and Portugal.
Thats true too in Peru, Colombia and Chile, if on a
smaller scale. While these countries are no longer
benefiting from the rapid growth in GDP of recent
years, forecast economic growth remains resilient
and in a range of 2% to 3%. With that growth
founded on a pretty stable base, it should bode
well for increased activity in the year ahead.
While interest from Chinese and other Asian investors
in doing commodity deals in the region is likely to be
much lower while commodity prices remain at a global
low, we do expect to see more transactions from
this source in other sectors, notably from Chinese,
Japanese and South Korean companies.
Chinese and South Korean investors have been seeking
out opportunities in the region for some time, but so far
we have not seen interest translate into many completed
deals. That could well change in the months ahead.
Asia Pacific
(including
Greater China)
Growth continues
despite challenges
The values of transactions in the region may not be quite
of the magnitude of some of the massive deals seen in
other markets, notably the U.S., but significant big-ticket
deals continue to be a theme here too and transaction
volumes have continued to rise in 2015, a trend we
expect to continue next year.
Across the region Japanese, Chinese and other Asian
investors continue to dominate the deal landscape.
With Japans economy once more teetering on the edge
of recession, Japanese companies and trading houses
are continuing to look for opportunities in more vibrant
economies, both within the region and further afield,
and are a visible force in cross-border activity.
Increasing amounts of Chinese capital are being deployed
outside Chinas borders, but there is a perceptible shift in
the balance of that investment. While the big state-owned
enterprises (SOE) continue to be distracted by and
preoccupied with the governments ongoing anti-corruption
crackdown, this is hampering decision-making.
By contrast, private Chinese investors are proving

increasingly fleet of foot and acquiring even if the targets
they are focusing on are smaller in terms of value.
Thats an important change at a time when there is more
money in the global economy generally and competition
for assets across the world is growing. It would not be
surprising to see these private companies continuing
to play an increasingly active role in the ongoing wave
of outbound investment from China.
As the Chinese economy continues to rebalance,
one significant driver will continue to be Chinese
companies seeking out brands and technologies that can
be developed afresh and exploited at home. The planned
sale of Osram, the lighting division spun off by Siemens
two years ago, is said to have attracted several potential
bidders, the majority of which are reputed to be Chinese.
In a number of sectors, the effort to build scale for Chinese
manufacturers is now being superseded by the challenge
to modernise and increase productivity and innovation
to address over-capacity and high costs in China.
China remains a challenging market for inbound
investors, and all the more so since the government has
strengthened its antitrust regime, taken a much tougher
line on corruption and imposed new controls on foreign
ownership in key sectors such as IT. But the opportunities
in this market make it one that overseas investors
can scarcely ignore and we expect to see continued
investment, with a growing accent on teaming up with
local partners who can help them navigate a complex
and often opaque market.
South East Asia remains relatively quiet in terms of
completed transactions, with key markets such as
Indonesia, Malaysia and even Singapore remaining
fairly inactive. But a number of major transactions are
going ahead as we saw with the recent USD2.3bn
acquisition of power assets in five countries by China
General Nuclear, bought from the struggling Malaysian
government investment fund, 1MDB. Behind the scenes
too there is growing activity from corporate buyers and
PE funds are once again scouting for deals, particularly
U.S. dollar denominated ones, who see an opportunity
to acquire assets relatively cheaply at a time when
local currencies have declined in value.
Australia continues to experience strong levels of activity.
Newly appointed Prime Minister, Malcolm Turnbull,
continues to impress the Australian business community
in the early stages of his leadership. With the Australian
dollar having weakened considerably since the start of the
year, the climate for foreign investment in Australia remains
very positive, and the outlook for 2016 equally so.
17
The opportunities in this market make it one

that overseas investors can
scarcely
ignore and we expect to see

continued investment.
Japanese companies
and trading houses are
continuing to look for
opportunities in more
vibrant economies,
both within the region
and further afield, and
are a visible force in
cross-border activity.
The largest Australian IPO of the year completed
successfully in November, with Link Group joining the
official list of the ASX with a market capitalisation of
approximately AUD2.5bn. The IPO raised approximately
AUD950m and was oversubscribed many times over.
All four bidders in the auction for the privatisation of
the New South Wales electricity assets received foreign
investment approval. A consortium led by Hastings Funds
Management, dominated by Canadas Caisse de dpt

et placement du Qubec and sovereign wealth funds
from Abu Dhabi and Kuwait, was appointed the
successful bidder with a reported bid price of
approximately AUD10.3bn.
Interest from Middle Eastern sovereign wealth funds
and Canadian pension funds is being seen more widely
across the region. While their main investment targets
are infrastructure and real estate, interest is spreading
to a wider number of sectors and we expect to see
further activity from them in 2016. Competition from
these funds is also forcing traditional PE operators to
emulate their investment strategies, taking a longer-term
asset management rather than asset churn
approach to transactions.
The overall outlook for 2016 looks positive, particularly as
we see further growth in outbound investment from China.
While Chinas growth is slowing and last summers wild
stock market fluctuations continue to have an impact
on sentiment domestically, the amount of money
being generated by the Chinese economy remains
mind-boggling, and increasingly that money is
being deployed overseas with active government
encouragement. That should mean that the growth
in transactions we have witnessed in 2015 will be
sustained next year.
18
Sector insights, Q4 2015

19
Sector insights
As the year unfolded, transformational deals spread across all sectors and we even
saw a resurgence in financial services. There are signs too that PE funds are once
again on the front foot.
Consumer
Consolidation set to continue

2015 has involved consumer groups making bold moves
towards the expansion of their global footprint and product
coverage, completing deals that may have been considered
too risky even only a year or two ago, whether from a
commercial, financial or antitrust perspective.
This has been seen across multiple market segments
including: food, with the giant USD100bn merger of
Heinz and Kraft; brewing, with the AB InBev/SABMiller
USD120bn, largely debt-funded, move to create a truly
global beer group; non-alcoholic beverages, with the
alliance forged between Coca-Colas European bottlers;
and pharmacy, as Walgreens/Boots Alliance extended
their venture by bidding USD17.2bn for Rite Aid.
The AB InBev/SABMiller deal involving more than
USD70bn of debt financing is a good example
of the new mood of confidence in boardrooms,
where macro-economic conditions are encouraging
executives to complete transformational deals.
The attractiveness of the transaction overrides
any concerns around regulatory scrutiny and,
where possible, such concerns are proactively
addressed for instance, through the proposed sale
of SABMillers majority stake in its North American
MillerCoors joint venture to its partner, Molson Coors.
This continues a trend started last year, most notably
in the tobacco industry with the three-way Reynolds/
Lorillard/Imperial Tobacco transaction.
It is not exclusively about expansion and consolidation,
however. The tie-up between the Dutch and Belgian
supermarket groups, Ahold and Delhaize, also
exemplifies the movement in grocery retail towards
focused localisation, rather than broad-brush
globalisation, as retailers struggle to balance the
local needs of their customers with the demands
of a global business to ensure purchasing power
and cost management through volume. Similarly,
Tescos disposal of its Korean business is principally
driven by the groups need to mend its finances,
but there is also a strong desire to focus more
on its domestic business.
We expect to see the tide

of transformational deals
continue to rise in 2016.
The USD28bn Ahold/Delhaize deal is, in large part,
about pooling significant resources to tackle local
competition in an important overseas market,
namely the East Coast of the U.S. (the new group
will have over 2,000 stores in the U.S.), resulting in
a combined business with much greater scale. The hope
is likely to be that greater scale will allow local customer
needs and global business demands to be balanced
successfully. A number of incoming retailers have
struggled to crack the U.S. market, so progress here will
be watched very closely by other players in the sector.
We expect to see the tide of transformational deals
continue to rise in 2016, with a determination to get
deals off the ground that have not been lacking funds
or appetite but might have been dependent on
completion of the larger consolidative deals and the
resulting availability of attractive targets which do not
fit within that bigger picture business plan. This has
certainly been the case in emerging markets such
as sub-Saharan Africa and particularly pertinent
global world.
If macro-economic tailwinds strengthen, conditions may
also be ripe for an increase in the volume of deals.
We could well see the coming of age of a number of
consumer businesses that launched in the aftermath of
the financial crisis and are now growing rapidly. As they
look to build on or benefit from that growth, we could
see a number attempting to raise new finance and partial
exit through IPOs or sales to strategic or private equity
purchasers. Thats certainly a growing trend already in
the FinTech sector, not least with the rise of peer-to-peer
lending, but we expect it to manifest itself more widely,
particularly in online retailing and related payment
systems and the consumer world as a whole will
feel the ramifications.
20
This may provide an opportunity for those

investors that are able to take a
longer-term
view on the oil price.
Energy and
Infrastructure
Uncertainty returns
After a long period of slower activity, 2015 saw the
return of strategic mega-deals to the oil and gas sector,
as major players looked for ways to consolidate their
market positions and take advantage of a downturn
in oil prices.
Shells proposed GBP47bn strategic takeover of BG
and ENOCs USD6bn acquisition of Dragon Oil are
both cases in point. The oilfield services sector has also
seen a spike in activity during the year, notably with
Halliburtons proposed USD35bn merger with Baker
Hughes and Schlumbergers USD12.7bn takeover of
the oil toolmaker Cameron.
In the second half of the year investors have, however,
become noticeably more cautious. The summer
gyrations in Chinese stock prices, the continuing fall in
commodity prices and the now generally accepted view
that oil prices are unlikely to recover for some time, have
all fed this sense of unease.
Notwithstanding this scenario, the market is expecting
the majors to seek to dispose of assets with significant
capex requirements. This may provide an opportunity for
those investors that are able to take a longer-term view
on the oil price, such as the NOCs, to acquire assets
that, in normal markets, would not be available to them.
The impact of lower oil prices has also been felt among
the smaller players in the sector, with companies either
unable to continue funding developments on their own
account or to attract alternative bank financing to see
projects through. Similarly, in the oil services sector, the
reduction in capex budgets and focus on cost reductions
within E&P companies is beginning to have an impact on
a number of the service sector participants who are now
having to look at restructuring options.

To date, this has not led to the expected pick-up in
transaction activity. It seems that investors looking to
snap up either individual assets or whole businesses
are holding fire while the market remains so volatile
and the outlook on the oil price is so hard to predict.
Given current concerns over the levels of commercial
oil stocks and the possible risk of another significant drop
in oil prices, investors may well sit on the sidelines far
longer than had originally been predicted.
2015 saw the return of

strategic mega-deals to
the oil and gas sector.
M&A activity in Russia continues to be curtailed by EU
and U.S. sanctions imposed in the wake of the Ukraine
situation, a factor that has seen Russian companies look
for alternative sources of investment, notably from China
and India. Some transactions are still going ahead in
Europe, however, as we saw with Rosnefts decision to
extend its investments in the German refining sector in
addition to its existing joint venture with BP.
By contrast, the U.S. continues to be a powerful engine
for new deals, on the back of the shale boom. We are
seeing increased domestic activity in the refining and
chemicals sector as producers redirect investment from
emerging markets back onshore to take advantage of
cheap and plentiful shale gas.
That trend will last only so long. If the market becomes
saturated, we could well see investment flowing
outbound again into European and Asian markets.
21
Other shale-related infrastructure deals notably pipelines

are to the fore too in the U.S., as we saw with the
USD33bn acquisition of Williams by rival pipeline giant
Energy Transfer Equity. And we expect to see other
opportunities arise here, which should attract more
mainstream infrastructure investors.
Thats a trend in some other markets too. The UKs
National Grid has, for instance, announced plans to sell
a majority stake in its gas transportation business in
2016. The deal is likely to attract interest from sovereign
wealth funds, pension funds and dedicated infrastructure
investors and is consistent with continued trading of
electricity and gas transmission and distribution assets
across Europe.
Such opportunities are becoming highly competitive,
as the infrastructure market more widely continues to
struggle with a now familiar problem an excess of
capital chasing a scarcity of assets, compounded by
the hunt for predictable and risk-free yield.
Financial services
Fortunes turn
2015 saw a sudden and somewhat surprising return
of transactions activity in the financial services sector
the first time we have seen a spike in FS deals since
the financial crisis.
Much of that activity has been driven by significant,
big-ticket consolidation deals in the insurance sector
and by a good level of activity in asset management.
But banking M&A continues to be driven mostly by
the regulatory agenda set since the crisis, with banks
continuing to slim down portfolios, dispose of
risk-weighted assets, and focus on their core
operations to meet tough new capital requirements.
Banks have several ways to complete this work and not
all of it involves M&A. Citi, for example, has disposed of
poorly performing or risky assets but it has reduced its
exposure in some markets, such as Russia, in other
ways, reducing headcount or closing down operations,
for example.
We did see some significant disposals during the year,
not least HSBCs USD5.2bn sale of its Brazilian banking
operations to Banco Bradesco. Its ongoing efforts to find
a buyer for its Turkish business, and the Portuguese
governments struggle to find a buyer for Novo Banco,
both clearly illustrate the ongoing difficulties of selling
major European banking assets.
By contrast, the U.S. has seen a significant spike
in banking transactions among mid-tier banks.
Indeed, there were 29 such transactions in the
years busiest quarter, Q3, with all but two being
domestic rather than cross-border deals.
2015 saw a sudden

and somewhat surprising
return of transactions
activity in the financial
services sector the first
time we have seen a
spike in FS deals since
the financial crisis.
One noticeable trend in banking is the continuing
refocusing of bank operations, particularly in global
investment banking where many of the big European
players are retrenching, leaving the big U.S. banks
such as Citi, JP Morgan, Bank of America,
Goldmans and Morgan Stanley in an increasingly
dominant position in the global market.
Separately, banks continue to sell whole loan portfolios,
really significant multibillion deals that are increasingly
attracting the interest of PE funds.
UKAR, the UK state-owned holding company,
sold shares and assets in Northern Rock and related
disposals from UKAR are expected to continue in the
next few years. GE also disposed of several portfolios
of UK loan assets to various funds. Elsewhere in Europe
we are seeing continued activity in Spain and from the
middle of next year further loan portfolio sales are
expected to begin in Greece.
This is also part of the continued effort to sort out legacy
issues from the financial crisis, as banks clear their books
of unwanted and/or poorly performing assets, such as
consumer loans, credit card portfolios and mortgages.
Banks are unlikely to buy these assets from each
other as they would have to hold capital against them
PE funds have no such capital requirements to meet.
The dominant trend in the insurance market is for a
two-way split, with large general insurers on one side,
and niche players on the other. That inevitably means the
mid-sized operators are becoming increasingly squeezed
and we expect them to remain takeover targets for their
larger rivals, with plenty more scope for consolidation of
this kind.
Japanese insurers and trading houses have been a

dominant force in this activity, said to account for
around a third of all activity in a year that has been busier
than any other period since 2006. Mitsui Sumitomos
GBP3.5bn acquisition of Lloyds insurer, Amlin,
was a standout deal in this regard and one that could
spark further bids for independent Lloyds insurers.
22
Meanwhile, reform of the U.S. healthcare system

following the so-called Obamacare Act is driving
consolidation on an even grander scale, with several
mega-mergers during the year, including the giant
USD48.4bn Anthem/Cigna merger.
We see considerable scope for further consolidation in
insurance and expect asset management deals to
continue also. While banking transactions and more
general restructuring will continue to be driven by the
new, post-crisis regulatory environment for some years
to come, we expect pure banking M&A more strategic
and adventurous in nature to continue to return the
further we get from the height of the financial crisis.
Life sciences
Time to draw breath?

The extraordinary M&A boom in the life sciences sector
continued right to the end of 2015, with Pfizer choosing
November to launch its giant USD160bn bid for Allergan
in what promises to be not only the largest ever deal in
pharmaceuticals, but also the biggest M&A deal of 2015
and the largest tax inversion on record.
Even before the move was announced, the life sciences
sector had already established itself as the powerhouse
of the M&A market and the main foundation stone of
now record levels of transactions in 2015. With the
Pfizer/Allergan deal taken in, the sector has seen
an astonishing USD630bn worth of deals in the
last 24 months.
Another growing area

of activity in 2015 has
been in the digital health
space, with pharma
companies starting to
buy in technology and
talent to help them
deliver all the promises
of digital medicine.
The generics market has been at the centre of this
activity and Allergan is a prime example of merger
fever with the current entity being the product of a string
of mergers, starting with the Actavis takeover of Watson.

Teva, on the other hand, bought out Allergans generics
business earlier this year in a USD40.5bn deal.
Ahead of that, Teva had abandoned its pursuit of
Mylan, which itself was tilting for Perrigo a battle
finally lost in the autumn when its offer was rejected
by Perrigo shareholders.
The bigger question for

next year is whether the
life sciences M&A boom
will continue.
There are two forces at play in M&A in the generics
market generic plus generic mergers are all about
economies of scale, while innovator and generic
mergers may achieve different results, likely linked
to diversification of portfolio and risk.
The Pfizer/Allergan deal comes only nine months after
Pfizer acquired biosimilar maker, Hospira, for USD16bn
and a little over a year after it was forced to abandon its
much bigger bid for the UKs AstraZeneca in the face of
objections from the target company, shareholders and
UK politicians.
The latest deal is controversially driven by the tax
efficiencies Pfizer will realise by moving its HQ out of
the U.S. and adopting Allergans Dublin domicile,
reducing its effective tax rate from 35% to 18%.
It comes despite efforts by the U.S. authorities to close
so-called tax inversion loopholes and has only been
possible because Pfizer has found a merger equal with
the right proportion of U.S. and overseas shareholders to
meet current restrictions. With political pressure building
on companies seeking to redomicile out of the U.S., it is
likely further action will be taken on tax inversion deals.
But the deal has industrial logic too, providing Pfizer
with a cushion from the peaks and troughs of creating
innovative drugs with all the inherent risks of R&D
and perils of the patent cliff. Now the move raises the
question of whether Pfizer, having bulked up its generics,
innovation and consumer interests is moving towards
the widely expected eventual break-up of the company
into three self-standing businesses.
The deal fits a pattern of activity in the market in recent
years with big pharma companies consolidating to cut
costs, to protect themselves from the patent cliff and find
new ways to create shareholder value. But not all players
are following the same path. GSK and Novartis have
both cast doubt on whether mega-mergers really create
value, preferring instead to pursue targeted so-called
precision M&A.
23
Mining-focused private equity funds and new
corporates
backed by funds, remain prepared to do deals.

The recent dramatic fall in share prices for the major
resources groups illustrates that position clearly.
Glencore has suffered more than most, its shares losing
a third of their value in September amid fears that the
slump in commodity prices may have further to run
and will prove to be prolonged. But its rivals have
fared only marginally better, with the market values
of Anglo American, BHP Billiton and Rio Tinto also
all suffering steep declines.
Meanwhile, failed deals in the market (for example

Mylan and Perrigo) show just how important it is to
demonstrate real shareholder value from proposed
transactions shareholders are not always as tractable
as boards might hope.
Another growing area of activity in 2015 has been in the
digital health space, with pharma companies starting to
buy in technology and talent to help them deliver all the
promises of digital medicine. That has led to a spate of
cross-sector transactions, and we expect this to be a
continuing trend in 2016.
The industry is feeling the effects of a glut of new

capacity brought on stream in the boom years when
commodity prices were rocketing ahead and when
the global market was being bolstered by seemingly
unending demand, notably from a fast expanding
Chinese economy.
The bigger question for next year is whether the life

sciences M&A boom will continue. Some commentators
confidently predict it will. But it would not be surprising to
see the industry take a pause for breath, not least while
recent deals are absorbed and bedded in, as pipelines
are restocked and, perhaps, mothballed projects are
brought back on stream in important areas like
antibiotic development.
All thats changed now. Demand from China has fallen

steeply as growth slows. Copper and platinum are at
a 10 year low, iron ore continues to fall, and other bulk
commodities are following a similar track. Although some
capacity has been taken out of the market, the supply
and demand situation remains badly out of balance and
will probably require further cuts.
Overall volumes of deals could remain healthy,

but it would not be surprising to see values decline
significantly from their current phenomenal heights.
Mining
Outlook remains gloomy

With commodity prices continuing to fall, demand
not least from China also on a downward trend and
with a global market increasingly dogged by oversupply,
the mining sector has ended an already very gloomy year
by deteriorating still further.
What little M&A activity we have seen has involved

moves to raise cash to shore up balance sheets
Glencore, for instance, has made a number of disposals.
Elsewhere BHP Billiton has taken action to sort out its
sprawling commodities interests, spinning off certain
interests from South32 to add greater focus.
The question for players at all levels of the sector,
however, is how long they can limp on before we see
a spate of distressed assets coming on to the market.
Banks are giving the industry some breathing space.
They seem loath to withdraw their backing from projects,
clearly recognising that, with the market in its present
parlous state, its better to hang on in the hope that
24
commodity prices will recover. The deals that are

being done tend to include structures where the
current owners may be able to protect themselves
against the risk of selling at the bottom of the cycle.
We have seen a number of distressed deals in recent
months but they still remain relatively few and far
between. Those that have occurred are focused at
the junior end (where companies lack the resources
to wait for an uptick in prices).
Other players looking to raise finance are managing to
make some headway. After months of seeing its share
price plummet, Lonmin, for instance, successfully got its
emergency USD400m rights issue away in November.
The commodities slump has hit Africa particularly hard,
and in some cases that has been compounded by
local factors. South Africa continues to be an uncertain
market, thanks to government intervention, continued
labour problems and frequent power disruptions, all of
which have hit the sector hard.
In the Asia Pacific region the sentiment is in line with
the global position. Mining companies have remained
focused on reducing both capital and operating costs,
conserving cash and resisting doing deals.
Mining companies have

remained focused on
reducing both capital
and operating costs,
conserving cash and
resisting doing deals.
Mining-focused private equity funds and new corporates
backed by funds, remain prepared to do deals, but at
values based on current commodity prices. To date there
have only been a limited number of deals where the gap
between the mining companies and the funds view of
value has been bridged. However, there are signs of a
slight increase in activity, such as the recently announced
acquisition by EMR Capital from Hong Kong listed
G-Resources of a 95% stake in the Martabe gold
and silver mine in Indonesia for USD1.05bn.
Deals are also being structured with deferred or
contingent payments, clawback rights and similar
features to provide the vendor with some potential for
future returns as a sweetener to get the deal done at
the current values.
Overall, however, there is little sign of a let-up in the
months ahead and we expect conditions in the
industry to remain depressed well into 2016.
Private equity
Swing year
While levels of activity by PE funds are still not at the
level seen in the frenzied years before the financial crisis,
2015 was undoubtedly a swing year for PE investment,
with funds once again going confidently on the front foot
to complete new acquisitions having focused largely on
exits in recent years.
Despite huge amounts of firepower to deploy and
ready access to debt financing, funds remained in a
pretty defensive mood in the wake of the crisis and
right up to this year. They were reluctant to compete
with well-financed strategic buyers, often prepared
to pay a premium to secure cherished synergies.
Auctions remained something of a no-go area for
funds, as a result.
That began to change in early 2015 and there has been
a progressive uptick in primary buyout activity as the year
has progressed, which not only indicates growing
confidence but also mounting pressure to deploy the
record levels of dry powder that funds have accumulated
in the relatively quiet years.
Some sectors have been particularly buoyant in recent
months, not least retail and consumer where weve
seen a raft of deals including R&R Ice Cream and PAI
Partners proposed joint venture with Nestl to combine
their global ice cream businesses, and Exponents
proposed GBP400m acquisition of Photobox Group,
the digital personalised gifts and products business.
Significant disposals continue too in this sector, not least
the GBP550m sale by Exponent and Intermediate
Capital Group of Quorn Foods, the international maker
of meat alternatives, to Monde Nissin of the Philippines.
And weve seen a good spread of secondary deals
between funds, not least two deals by PAI Partners
the acquisition of A/S Adventure from Lion Capital
and the specialist outdoor sports retailer, Snow and
Rock Group, from LGV Capital.
Business services also remains a busy area for
transactions, including the acquisition by OMERS
Capital and AIMCo of Environmental Resources
Management, the international sustainability
consultancy, from Charterhouse.
This shift in activity towards a better spread of both
acquisitions and exits is mirrored in many north European
markets, with activity in France picking up particularly at
the top end of the mid-market, and with Germany and
the Benelux countries busy too. Italy and Spain are also
getting more active, although activity is focused on
smaller deals, but Scandinavia remains relatively quiet.
25
Some sectors have been particularly
buoyant
in recent months, not least retail and consumer.
The big funds are

once again partaking
in auctions, and its no
longer uncommon to
see potential buyers
seeing the whole
process through.
We expect this to continue into 2016. After a year
of heightened activity, its hard to see any particular
economic issue that could halt it in its tracks,
although geopolitical events may cause disruption
and the summers volatility in Chinese stock prices
did cause a brief, delayed slowdown in PE activity
in the Autumn.
The big funds are once again partaking in auctions,
and its no longer uncommon to see potential buyers
seeing the whole process through. Even if ultimately
unsuccessful, it shows that funds are once again
prepared to make that investment to explore
new opportunities.
As confidence grows, deals are likely to become
more ambitious and, probably, more complex.
Its becoming increasingly common, for instance,
to see a PE Fund joining forces with a strategic buyer
to pursue a buyout, with the fund able to bring more
innovative financing to support the strategic buyer in
securing much prized synergies.
Telecoms, media
and technology
The regulatory challenge

No other sector, apart from life sciences, has driven
the M&A boom of the last 18 months like TMT, and
continued activity is on the cards as both regulation
and innovation drive players to re-examine their
business models and look for new avenues to growth.
With merger authorities having cleared a number
of fixed-to-mobile convergence deals relatively
swiftly compared with mobile-to-mobile consolidation
deals, M&A dealmakers may focus efforts on
convergence deals.
Underlying the continued M&A activity in the telecoms
sector, and indeed M&A activity in the broader media
market, is a shift to platform-agnostic strategies based
on a quadplay offering. These models increase
customer stickiness for the operator, but also
respond to consumer demand for anytime/anywhere
access to content.
And theres a knock-on effect the value of content
providers is rising as operators seek access to the kind
of valuable content that will allow them to attract and
hang on to customers. BTs investment in sports rights
and Netflixs investment in programming are part of this
trend, and we are likely to see more content providers
consolidating and being bought by operators.
Further, more profound regulatory change is on the way in
Europe thanks to the Commissions Digital Single Market
initiative. Although this may not have an impact on the
M&A market in the coming year, it promises to do so in the
26
Chinas push for increased cybersecurity has

meant that its imposition of
indigenous
cyber-reliable requirements has

created an additional complex element.
longer term by potentially redefining such issues as access
to copyrighted content across borders which could disrupt
the way rights are sold on a national basis. The power of
big individual platforms, such as Google and Amazon, to
concentrate the delivery of services could also be challenged.
Another driver of activity in the tech sector is the
growing trend towards cross-sector acquisitions,
with, for instance, financial institutions and pharma
companies buying tech companies to enter the FinTech
and digital health sectors. We are already seeing activity
in these areas as established players look at acquiring,
collaborating with or investing in innovative digital
companies to inject technology and skills into
their businesses. FinTech has already seen plenty
of activity in 2015, and 2016 looks to be even
busier particularly in the booming payments
and peer-to-peer lending segments.
Chinas impact on the technology landscape continues
to grow including with increased complexity and nuance.
Chinas push for increased cybersecurity has meant that
its imposition of indigenous, cyber-reliable requirements
has created an additional complex element that is coupled
with Beijings increased role on global merger control
clearance as well as the very nascent beginnings of a
Chinese-like CFIUS regime. Cross-border joint venture
arrangements of different shapes and sizes are expected
to grow. The HP/Tsinghua deal was one form of market
leading response, Microsoft and IBMs willingness to share
some form of source code was a recent development,
Nokias announced China joint venture with Huaxin and

Chinese clearance of its merger with Alcatel-Lucent was
another, and Western Digitals invitation to take on a
Chinese investor was yet another. On the internet space,
the Chinese internet behemoths are expected to
continue to diversify their portfolio of businesses
even as they continue to expand internationally.
In the year ahead, we expect to see a growing number
of outbound content or technology-based deals by
Chinese companies eager to exploit opportunities
both internationally and domestically.
Thats a continuation of another significant trend
in 2015 where Chinas growing influence in the
technology M&A market became increasingly evident,
through outbound acquisitions, as an increasingly
powerful presence in antitrust regulation and as a
direct result of government policy to ensure Chinese
companies maintain control of strategic IT joint
ventures with inbound investors, as the HP/Tsinghua
deal demonstrated this year.
27
A global snapshot
28
A global snapshot
Top 20 global outbound acquirers and inbound target markets
Netherlands
152 175
Belgium
279 248
Canada
UK
516 549
Ireland (Republic)
U.S.
1231 816
105 74
326
France
Spain
68
Switzerland
137
Key
Number of
outbound acquisitions
Number of inbound
acquisitions
Note: these figures represent the total

number of deals announced between
1 January 2015 and 11 December 2015.
73 87
Brazil
200
170
166 75
29
69 82
52
108
161
116
Norway
Denmark
Sweden
285 339
89
190
Germany
Top 20 Global Outbound Acquirers, FY 2015
Top 20 Global Inbound Target Markets, FY 2015
Rank
Country
Rank
Country
U.S.
UK
Volume
of deals
Value of
deals USDm
Volume
of deals
Value of
deals USDm
1,231
416,057
516
129,484
U.S.
816
409,659
UK
549
France
326
44,254
357,507
Germany
339
China
312
44,105
84,231
China
266
Japan
37,123
296
84,141
Canada
248
19,935
Germany
285
23,453
India
232
21,862
Canada
279
146,177
France
200
52,401
Hong Kong
245
53,197
Italy
190
42,417
Switzerland
166
42,036
Australia
183
46,015
10
Sweden
161
9,775
10
Netherlands
175
28,902
11
Netherlands
152
151,655
11
Spain
170
27,365
12
Singapore
126
11,008
12
Brazil
137
16,411
13
Australia
115
21,333
13
Sweden
116
20,122
14
Ireland (Republic)
105
50,373
14
Denmark
108
8,023
15
Italy
89
12,719
15
Hong Kong
107
31,334
16
Belgium
73
128,198
16
Belgium
87
17,577
17
Norway
69
4,155
17
Norway
82
7,860
18
Spain
68
19,852
18
Switzerland
75
12,812
19
India
63
4,869
19
Ireland (Republic)
74
235,862
20
Denmark
52
5,457
20
Singapore
71
14,077
Italy
312 266
63
296
Japan
China
232
245
India
126
71
115 183
107
Hong Kong
Australia
Singapore
30
A global snapshot
Top target markets for the worlds largest acquiring countries
U.S. the worlds largest acquiring country
UK
Value of deals (USDm)
UK
Canada
India
Germany
France
60,755
13,087
12,482
18,275
12,952
Australia
Brazil
Netherlands
Italy
Spain
United
United
Kingdom
Kingdom
9,142
5,140
17,061
10,230
11,733
161
Canada
Canada
U.S.
Germany
Netherlands
France
Australia
229
90
88
India
India
Germany
Germany
Netherlands
Netherlands
France
France
57
51
47
43
43
37
France
France
Australia
Australia
Brazil
Brazil
Netherlands
Netherlands
Italy
Italy
Spain
Spain
USA
USA
Germany
Germany
Australia
Australia
Ireland
Ireland
(Republic)
(Republic)
India
India
Italy
Italy
Spain
Spain
Canada
Canada
0.000000
0.000000
3.285714
3.285714
6.571429
6.571429
9.857143
13.142857
9.857143
13.142857
16.428571
16.428571
19.714286
19.714286
23.000000
23.000000
26.285714
26.285714
29.571429
29.571429
32.857143
32.857143
36.142857
36.142857
39.428571
39.428571
42.714286
42.714286
46.000000
46.000000
49.285714
49.285714
52.571429
52.571429
55.857143
55.857143
59.142857
59.142857
62.428571
62.428571
65.714286
65.714286
69.000000
69.000000
72.285714
72.285714
75.571429
75.571429
78.857143
78.857143
82.142857
82.142857
85.428571
85.428571
88.714286
88.714286
92.000000
92.000000
95.285714
95.285714
98.571429
101.857143
98.571429
101.857143
105.142857
105.142857
108.428571
108.428571
111.714286
111.714286
115.000000
115.000000
118.285714
118.285714
121.571429
121.571429
124.857143
124.857143
128.142857
128.142857
131.428571
131.428571
134.714286
134.714286
138.000000
138.000000
141.285714
141.285714
144.571429
144.571429
147.857143
147.857143
151.142857
151.142857
154.428571
154.428571
157.714286
157.714286
161.000000
161.000000
164.285714
164.285714
167.571429
167.571429
170.857143
170.857143
174.142857
174.142857
177.428571
177.428571
180.714286
180.714286
184.000000
184.000000
187.285714
187.285714
190.571429
190.571429
193.857143
193.857143
197.142857
197.142857
200.428571
200.428571
203.714286
203.714286
207.000000
207.000000
210.285714
210.285714
213.571429
213.571429
216.857143
216.857143
220.142857
220.142857
223.428571
223.428571
226.714286
226.714286
230.000000
230.000000
U.S.
UK
Germany
Italy
Belgium
Germany
Germany
Italy
Italy
Belgium
Belgium
Spain
Spain
Netherlands
Netherlands
Brazil
Brazil
Canada
Canada
Switzerland
Switzerland
24
22
22
12
9
7
7
36,420
1,670
938
2,396
531
130
37
28
25
24
23
20
20
19
19
China
USA
USA
Ireland (Rep)
India
Italy
Spain
Canada
0.000000
0.000000
3.285714
3.285714
6.571429
6.571429
9.857143
13.142857
9.857143
13.142857
16.428571
16.428571
19.714286
19.714286
23.000000
23.000000
26.285714
26.285714
29.571429
29.571429
32.857143
32.857143
36.142857
36.142857
39.428571
39.428571
42.714286
42.714286
46.000000
46.000000
49.285714
49.285714
52.571429
52.571429
55.857143
55.857143
59.142857
59.142857
62.428571
62.428571
65.714286
65.714286
69.000000
69.000000
72.285714
72.285714
75.571429
75.571429
78.857143
78.857143
82.142857
82.142857
85.428571
85.428571
88.714286
88.714286
92.000000
92.000000
95.285714
95.285714
98.571429
101.857143
98.571429
101.857143
105.142857
105.142857
108.428571
108.428571
111.714286
111.714286
115.000000
115.000000
118.285714
118.285714
121.571429
121.571429
124.857143
124.857143
128.142857
128.142857
131.428571
131.428571
134.714286
134.714286
138.000000
138.000000
141.285714
141.285714
144.571429
144.571429
147.857143
147.857143
151.142857
151.142857
154.428571
154.428571
157.714286
157.714286
161.000000
161.000000
164.285714
164.285714
167.571429
167.571429
170.857143
170.857143
174.142857
174.142857
177.428571
177.428571
180.714286
180.714286
184.000000
184.000000
187.285714
187.285714
190.571429
190.571429
193.857143
193.857143
197.142857
197.142857
200.428571
200.428571
203.714286
203.714286
207.000000
207.000000
210.285714
210.285714
213.571429
213.571429
216.857143
216.857143
220.142857
220.142857
223.428571
223.428571
226.714286
226.714286
230.000000
230.000000
France
United
United
Kingdom
Kingdom
42,789
7,756
3,752
6,043
1,108
23,677
2,636
587
2,072
2,405
35
35

Spain
Netherlands
Brazil
Canada
Switzerland
2,110
1,221
126
22
6
Hong Kong
U.S.
Australia
South Korea
Singapore
52
Australia
Australia
South
South
Korea
Korea
Singapore
Singapore
United
United
Kingdom
Kingdom
0.000000
0.000000
3.285714
3.285714
6.571429
6.571429
9.857143
13.142857
9.857143
13.142857
16.428571
16.428571
19.714286
19.714286
23.000000
23.000000
26.285714
26.285714
29.571429
29.571429
32.857143
32.857143
36.142857
36.142857
39.428571
39.428571
42.714286
42.714286
46.000000
46.000000
49.285714
49.285714
52.571429
52.571429
55.857143
55.857143
59.142857
59.142857
62.428571
62.428571
65.714286
65.714286
69.000000
69.000000
72.285714
72.285714
75.571429
75.571429
78.857143
78.857143
82.142857
82.142857
85.428571
85.428571
88.714286
88.714286
92.000000
92.000000
95.285714
95.285714
98.571429
101.857143
98.571429
101.857143
105.142857
105.142857
108.428571
108.428571
111.714286
111.714286
115.000000
115.000000
118.285714
118.285714
121.571429
121.571429
124.857143
124.857143
128.142857
128.142857
131.428571
131.428571
134.714286
134.714286
138.000000
138.000000
141.285714
141.285714
144.571429
144.571429
147.857143
147.857143
151.142857
151.142857
154.428571
154.428571
157.714286
157.714286
161.000000
161.000000
164.285714
164.285714
167.571429
167.571429
170.857143
170.857143
174.142857
174.142857
177.428571
177.428571
180.714286
180.714286
184.000000
184.000000
187.285714
187.285714
190.571429
190.571429
193.857143
193.857143
197.142857
197.142857
200.428571
200.428571
203.714286
203.714286
207.000000
207.000000
210.285714
210.285714
213.571429
213.571429
216.857143
216.857143
220.142857
220.142857
223.428571
223.428571
226.714286
226.714286
230.000000
230.000000
*These figures represent the total number of deals announced

between 1 January 2015 and 11 December 2015.
Germany
Germany
Canada
Canada
India
India
Taiwan
Taiwan
UK
Germany
Canada
India
Taiwan
1,906
359
498
1,384
1,003
64
57
Hong
Hong
Kong
Kong
USA
USA
13,204
17,414
4,722
1,385
2,539
23
20
16
12
10
9
8
8
0.000000
0.000000
3.285714
3.285714
6.571429
6.571429
9.857143
13.142857
9.857143
13.142857
16.428571
16.428571
19.714286
19.714286
23.000000
23.000000
26.285714
26.285714
29.571429
29.571429
32.857143
32.857143
36.142857
36.142857
39.428571
39.428571
42.714286
42.714286
46.000000
46.000000
49.285714
49.285714
52.571429
52.571429
55.857143
55.857143
59.142857
59.142857
62.428571
62.428571
65.714286
65.714286
69.000000
69.000000
72.285714
72.285714
75.571429
75.571429
78.857143
78.857143
82.142857
82.142857
85.428571
85.428571
88.714286
88.714286
92.000000
92.000000
95.285714
95.285714
98.571429
101.857143
98.571429
101.857143
105.142857
105.142857
108.428571
108.428571
111.714286
111.714286
115.000000
115.000000
118.285714
118.285714
121.571429
121.571429
124.857143
124.857143
128.142857
128.142857
131.428571
131.428571
134.714286
134.714286
138.000000
138.000000
141.285714
141.285714
144.571429
144.571429
147.857143
147.857143
151.142857
151.142857
154.428571
154.428571
157.714286
157.714286
161.000000
161.000000
164.285714
164.285714
167.571429
167.571429
170.857143
170.857143
174.142857
174.142857
177.428571
177.428571
180.714286
180.714286
184.000000
184.000000
187.285714
187.285714
190.571429
190.571429
193.857143
193.857143
197.142857
197.142857
200.428571
200.428571
203.714286
203.714286
207.000000
207.000000
210.285714
210.285714
213.571429
213.571429
216.857143
216.857143
220.142857
220.142857
223.428571
223.428571
226.714286
226.714286
230.000000
230.000000
31
Japan
Germany
U.S.
India
UK
Australia
Germany
USA
USA
India
India
United
United
Kingdom
Kingdom
Australia
Australia
Germany
Germany
Singapore
Singapore
Brazil
Brazil
Canada
Canada
Vietnam
Vietnam
South
South
Korea
Korea
24
21
15
15
13
12
11
10
9
30,465
1,064
11,537
8,867
1,905
Singapore
Brazil
Canada
Vietnam
South Korea
2,607
1,203
169
266
2,185
U.S.
UK
Italy
Netherlands
Spain
64
USA
USA
United
Kingdom
United
Kingdom
Italy
Italy
Netherlands
Netherlands
Spain
Spain
France
France
Austria
Austria
Switzerland
Switzerland
Sweden
Sweden
Belgium
Belgium
0.000000
3.285714
0.000000
6.571429
3.285714
9.857143
6.571429
13.142857
9.857143
16.428571
13.142857
19.714286
16.428571
23.000000
19.714286
26.285714
23.000000
29.571429
26.285714
32.857143
29.571429
36.142857
32.857143
39.428571
36.142857
42.714286
39.428571
46.000000
42.714286
49.285714
46.000000
52.571429
49.285714
55.857143
52.571429
59.142857
55.857143
62.428571
59.142857
65.714286
62.428571
69.000000
65.714286
72.285714
69.000000
75.571429
72.285714
78.857143
75.571429
82.142857
78.857143
85.428571
82.142857
88.714286
85.428571
92.000000
88.714286
95.285714
92.000000
98.571429
95.285714
101.857143
98.571429
105.142857
101.857143
108.428571
105.142857
111.714286
108.428571
115.000000
111.714286
118.285714
115.000000
121.571429
118.285714
124.857143
121.571429
128.142857
124.857143
131.428571
128.142857
134.714286
131.428571
138.000000
134.714286
141.285714
138.000000
144.571429
141.285714
147.857143
144.571429
151.142857
147.857143
154.428571
151.142857
157.714286
154.428571
161.000000
157.714286
164.285714
161.000000
167.571429
164.285714
170.857143
167.571429
174.142857
170.857143
177.428571
174.142857
180.714286
177.428571
184.000000
180.714286
187.285714
184.000000
190.571429
187.285714
193.857143
190.571429
197.142857
193.857143
200.428571
197.142857
203.714286
200.428571
207.000000
203.714286
210.285714
207.000000
213.571429
210.285714
216.857143
213.571429
220.142857
216.857143
223.428571
220.142857
226.714286
223.428571
230.000000
226.714286
230.000000
USA
USA
India
India
Germany
Germany
Australia
Australia
France
France
Sweden
Sweden
Spain
Spain
Portugal
Portugal
Netherlands
Netherlands
10
8
6
4
3
3
3
3
France
Sweden
Spain
Portugal
Netherlands
1,349
7,108
114
74
14
China
U.S.
UK
Singapore
Australia
175
29
China
China
USA
USA
United
Kingdom
United
Kingdom
Singapore
Singapore
Australia
Australia
South
South
Korea
Korea
Canada
Canada
India
India
Germany
Germany
Japan
Japan
0.000000
3.285714
0.000000
6.571429
3.285714
9.857143
6.571429
13.142857
9.857143
16.428571
13.142857
19.714286
16.428571
23.000000
19.714286
26.285714
23.000000
29.571429
26.285714
32.857143
29.571429
36.142857
32.857143
39.428571
36.142857
42.714286
39.428571
46.000000
42.714286
49.285714
46.000000
52.571429
49.285714
55.857143
52.571429
59.142857
55.857143
62.428571
59.142857
65.714286
62.428571
69.000000
65.714286
72.285714
69.000000
75.571429
72.285714
78.857143
75.571429
82.142857
78.857143
85.428571
82.142857
88.714286
85.428571
92.000000
88.714286
95.285714
92.000000
98.571429
95.285714
101.857143
98.571429
105.142857
101.857143
108.428571
105.142857
111.714286
108.428571
115.000000
111.714286
118.285714
115.000000
121.571429
118.285714
124.857143
121.571429
128.142857
124.857143
131.428571
128.142857
134.714286
131.428571
138.000000
134.714286
141.285714
138.000000
144.571429
141.285714
147.857143
144.571429
151.142857
147.857143
154.428571
151.142857
157.714286
154.428571
161.000000
157.714286
164.285714
161.000000
167.571429
164.285714
170.857143
167.571429
174.142857
170.857143
177.428571
174.142857
180.714286
177.428571
184.000000
180.714286
187.285714
184.000000
190.571429
187.285714
193.857143
190.571429
197.142857
193.857143
200.428571
197.142857
203.714286
200.428571
207.000000
203.714286
210.285714
207.000000
213.571429
210.285714
216.857143
213.571429
220.142857
216.857143
223.428571
220.142857
226.714286
223.428571
230.000000
226.714286
230.000000
USA
USA
United
United
Kingdom
Kingdom
Italy
Italy
France
France
Netherlands
Netherlands
Spain
Spain
Canada
Canada
Brazil
Brazil
Austria
Austria
28
23
14
13
12
8
8
5
5
4
South Korea
Canada
India
Germany
Japan
548
2,123
450
156
50
144
16
13
10
7
7
6
6
6
4
Sweden
Germany
Germany
23,154
1,565
20,196
955
629
0.000000
3.285714
0.000000
6.571429
3.285714
9.857143
6.571429
13.142857
9.857143
16.428571
13.142857
19.714286
16.428571
23.000000
19.714286
26.285714
23.000000
29.571429
26.285714
32.857143
29.571429
36.142857
32.857143
39.428571
36.142857
42.714286
39.428571
46.000000
42.714286
49.285714
46.000000
52.571429
49.285714
55.857143
52.571429
59.142857
55.857143
62.428571
59.142857
65.714286
62.428571
69.000000
65.714286
72.285714
69.000000
75.571429
72.285714
78.857143
75.571429
82.142857
78.857143
85.428571
82.142857
88.714286
85.428571
92.000000
88.714286
95.285714
92.000000
98.571429
95.285714
101.857143
98.571429
105.142857
101.857143
108.428571
105.142857
111.714286
108.428571
115.000000
111.714286
118.285714
115.000000
121.571429
118.285714
124.857143
121.571429
128.142857
124.857143
131.428571
128.142857
134.714286
131.428571
138.000000
134.714286
141.285714
138.000000
144.571429
141.285714
147.857143
144.571429
151.142857
147.857143
154.428571
151.142857
157.714286
154.428571
161.000000
157.714286
164.285714
161.000000
167.571429
164.285714
170.857143
167.571429
174.142857
170.857143
177.428571
174.142857
180.714286
177.428571
184.000000
180.714286
187.285714
184.000000
190.571429
187.285714
193.857143
190.571429
197.142857
193.857143
200.428571
197.142857
203.714286
200.428571
207.000000
203.714286
210.285714
207.000000
213.571429
210.285714
216.857143
213.571429
220.142857
216.857143
223.428571
220.142857
226.714286
223.428571
230.000000
226.714286
230.000000
Switzerland
Germany
U.S.
UK
Italy
France
14
1,243
719
390
95
0.000000
3.285714
0.000000
6.571429
3.285714
9.857143
6.571429
13.142857
9.857143
16.428571
13.142857
19.714286
16.428571
23.000000
19.714286
26.285714
23.000000
29.571429
26.285714
32.857143
29.571429
36.142857
32.857143
39.428571
36.142857
42.714286
39.428571
46.000000
42.714286
49.285714
46.000000
52.571429
49.285714
55.857143
52.571429
59.142857
55.857143
62.428571
59.142857
65.714286
62.428571
69.000000
65.714286
72.285714
69.000000
75.571429
72.285714
78.857143
75.571429
82.142857
78.857143
85.428571
82.142857
88.714286
85.428571
92.000000
88.714286
95.285714
92.000000
98.571429
95.285714
101.857143
98.571429
105.142857
101.857143
108.428571
105.142857
111.714286
108.428571
115.000000
111.714286
118.285714
115.000000
121.571429
118.285714
124.857143
121.571429
128.142857
124.857143
131.428571
128.142857
134.714286
131.428571
138.000000
134.714286
141.285714
138.000000
144.571429
141.285714
147.857143
144.571429
151.142857
147.857143
154.428571
151.142857
157.714286
154.428571
161.000000
157.714286
164.285714
161.000000
167.571429
164.285714
170.857143
167.571429
174.142857
170.857143
177.428571
174.142857
180.714286
177.428571
184.000000
180.714286
187.285714
184.000000
190.571429
187.285714
193.857143
190.571429
197.142857
193.857143
200.428571
197.142857
203.714286
200.428571
207.000000
203.714286
210.285714
207.000000
213.571429
210.285714
216.857143
213.571429
220.142857
216.857143
223.428571
220.142857
226.714286
223.428571
230.000000
226.714286
230.000000
Hong Kong
82,467
23,511
838
7,925
18,185
France
Austria
Switzerland
Sweden
Belgium
41
31
25
19
18
18
17
14
10
8
Canada
U.S.
UK
India
Germany
Australia
United
United
Kingdom
Kingdom
7,020
561
7,588
700
1,085
377
30,031
3,334
3,896
645

Netherlands
Spain
Canada
Brazil
Austria
1,417
215
252
220
Norway
Finland
U.S.
Denmark
Germany
Norway
Norway
Finland
Finland
USA
USA
Denmark
Denmark
Germany
Germany
Netherlands
Netherlands
United
Kingdom
United
Kingdom
0.000000
3.285714
0.000000
6.571429
3.285714
9.857143
6.571429
13.142857
9.857143
16.428571
13.142857
19.714286
16.428571
23.000000
19.714286
26.285714
23.000000
29.571429
26.285714
32.857143
29.571429
36.142857
32.857143
39.428571
36.142857
42.714286
39.428571
46.000000
42.714286
49.285714
46.000000
52.571429
49.285714
55.857143
52.571429
59.142857
55.857143
62.428571
59.142857
65.714286
62.428571
69.000000
65.714286
72.285714
69.000000
75.571429
72.285714
78.857143
75.571429
82.142857
78.857143
85.428571
82.142857
88.714286
85.428571
92.000000
88.714286
95.285714
92.000000
98.571429
95.285714
101.857143
98.571429
105.142857
101.857143
108.428571
105.142857
111.714286
108.428571
115.000000
111.714286
118.285714
115.000000
121.571429
118.285714
124.857143
121.571429
128.142857
124.857143
131.428571
128.142857
134.714286
131.428571
138.000000
134.714286
141.285714
138.000000
144.571429
141.285714
147.857143
144.571429
151.142857
147.857143
154.428571
151.142857
157.714286
154.428571
161.000000
157.714286
164.285714
161.000000
167.571429
164.285714
170.857143
167.571429
174.142857
170.857143
177.428571
174.142857
180.714286
177.428571
184.000000
180.714286
187.285714
184.000000
190.571429
187.285714
193.857143
190.571429
197.142857
193.857143
200.428571
197.142857
203.714286
200.428571
207.000000
203.714286
210.285714
207.000000
213.571429
210.285714
216.857143
213.571429
220.142857
216.857143
223.428571
220.142857
226.714286
223.428571
230.000000
226.714286
230.000000
China
China
Australia
Australia
Poland
Poland
3
3
3
19
18
16
11
10
10
893
300
1,585
4,100
642
Netherlands
UK
China
Australia
Poland
509
142
29
0.000000
3.285714
0.000000
6.571429
3.285714
9.857143
6.571429
13.142857
9.857143
16.428571
13.142857
19.714286
16.428571
23.000000
19.714286
26.285714
23.000000
29.571429
26.285714
32.857143
29.571429
36.142857
32.857143
39.428571
36.142857
42.714286
39.428571
46.000000
42.714286
49.285714
46.000000
52.571429
49.285714
55.857143
52.571429
59.142857
55.857143
62.428571
59.142857
65.714286
62.428571
69.000000
65.714286
72.285714
69.000000
75.571429
72.285714
78.857143
75.571429
82.142857
78.857143
85.428571
82.142857
88.714286
85.428571
92.000000
88.714286
95.285714
92.000000
98.571429
95.285714
101.857143
98.571429
105.142857
101.857143
108.428571
105.142857
111.714286
108.428571
115.000000
111.714286
118.285714
115.000000
121.571429
118.285714
124.857143
121.571429
128.142857
124.857143
131.428571
128.142857
134.714286
131.428571
138.000000
134.714286
141.285714
138.000000
144.571429
141.285714
147.857143
144.571429
151.142857
147.857143
154.428571
151.142857
157.714286
154.428571
161.000000
157.714286
164.285714
161.000000
167.571429
164.285714
170.857143
167.571429
174.142857
170.857143
177.428571
174.142857
180.714286
177.428571
184.000000
180.714286
187.285714
184.000000
190.571429
187.285714
193.857143
190.571429
197.142857
193.857143
200.428571
197.142857
203.714286
200.428571
207.000000
203.714286
210.285714
207.000000
213.571429
210.285714
216.857143
213.571429
220.142857
216.857143
223.428571
220.142857
226.714286
223.428571
230.000000
226.714286
230.000000
About the research

The underlying data for this research comes from The Mergermarket Group.
The data contained in this publication spans 1 January 2015 and 11 December 2015 inclusive.
GLOBAL PRESENCE
Allen & Overy is an international legal practice with approximately 5,000 people, including some 527 partners, working in 44 offices worldwide.
Allen & Overy LLP or an affiliated undertaking has an office in each of:
Abu Dhabi
Amsterdam
Antwerp
Bangkok
Barcelona
Beijing
Belfast
Bratislava
Brussels
Bucharest (associated office)

Budapest
Casablanca
Doha
Dubai
Dsseldorf
Frankfurt
Hamburg
Hanoi
Ho Chi Minh City

Hong Kong
Istanbul
Jakarta (associated office)
Johannesburg
London
Luxembourg
Madrid
Milan
Moscow
Munich
New York
Paris
Perth
Prague
Riyadh (cooperation office)
Rome
So Paulo
Seoul
Shanghai
Singapore
Sydney
Tokyo
Warsaw
Washington, D.C.
Yangon
Allen & Overy means Allen & Overy LLP and/or its affiliated undertakings. The term partner is used to refer to a member of Allen & Overy LLP or an employee
or consultant with equivalent standing and qualifications or an individual with equivalent status in one of Allen & Overy LLPs affiliated undertakings.
Allen & Overy LLP 2015 | CS1511_CDD-43738_ADD-56740_UK_V2
www.allenovery.com

M&amp;A Insights Q4 2015

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Insights, Q4 2015

M&A Insights | Q4 2015

Allen & Overy LLP 2015

M&A Insights | Q4 2015

With the deal-making environment remaining strong,

Ready availability of debt finance, record levels of

With globalisation continuing to be a major driver of

After several years focussing mainly on securing exits,

Mega-deals to the fore

Tax still a driver

Big-ticket transformational M&A deals have been a

Despite growing opposition from across the political

Powerful U.S. performance

Chinas private companies seek

The U.S. market continues to power ahead in an

Have the life sciences

Allen & Overy LLP 2015

As the deployment of Chinese capital across the world

Continued growth in 2016?

Global M&A in numbers 2015

deals Q1-Q4 2015

Activity by deal value (USD)

Deal volumes by region

CEE and CIS

M&A Insights | Q4 2015

his year, there have been around

Allen & Overy LLP 2015

Big international players have been eager to

the competing bids by Dollar General and

Reflecting the uptick in cross-border M&A,

Activists and proxy advisers are having an important

M&A Insights | Q4 2015

Regional insights, Q4 2015

Big deals predominate

Similarly, in the cable TV industry, threatened by the

An overriding theme of the year has been the

Activists continue to play an important role as a catalyst

The boardroom confidence to do these mega-deals

The boardroom confidence

A consistent theme for these deals has been securing

The Pfizer/Allergan transaction demonstrates that tax

M&A Insights | Q4 2015

Despite high profile deals such as Carlyles acquisition of

Will growth peak?

Allen & Overy LLP 2015

By contrast the successful IPO of Dutch bank ABN Amro

There has been a sharp

The main motivating factors behind higher activity

of debt and a surplus of corporate cash

CEE and CIS

New signs of life?

M&A Insights | Q4 2015

Events in Hungary continue to be dominated by the

Allen & Overy LLP 2015

Privatisation remains on the cards, but we do not expect

Economic growth in the

good pipeline is developing, particularly in the UAE. There

Preparing for future growth

Investment in power and

M&A Insights | Q4 2015

Such investment can act as a real spur to economic

Growth slowly builds

Allen & Overy LLP 2015

translated into some investor uncertainty and fairly

M&A Insights Q4 2015

M&A Insights Q4 2015