Deal Drivers EMEA H1 2010

DEALDRIVERS EMEAThe comprehensive review of mergers and acquisitions in the EMEA region.

Published by:

In association with:

2010

Half-year

edition

02

Contents

About mergermArket

DEAl DrIvErs – EuRopE

mergermarket is an unparalleled mergers and acquisitions intelligence tool. In any market, the life blood of advisers is deal flow. mergermarket is unique in the provision of origination intelligence to the investment banking, legal, private equity, acquisition finance, public relations and corporate markets.

With an unrivalled network of journalists and analysts covering M&A in Europe and North America, mergermarket generates proprietary intelligence and delivers it,

together with daily aggregated content, on its mergermarket.com platform and by real-time email alerts to its subscribers.

This wealth of intelligence, together with a series of deal databases, individual and house league tables, profiles and editorial, has proven time and time again that this product can and does provide real revenues for mergermarket’s clients. This is apparent when you see that mergermarket is used by over 400 of the world’s foremost advisory firms to assist in their origination process.

mergermarket is not interested in news, by then the opportunity has usually passed. mergermarket focuses on revenue-generating intelligence and proves daily that it is one of the most useful and powerful tools for the M&A market.

Foreword 03

HeatChart 04

AllSectors 06

FinancialServices 14

Industrials&Chemicals 18

Energy,Mining&Utilities 22

Consumer 26

Telecoms,Media&Technology 30

Transportation 34

Pharma,Medical&Biotech 38

Construction 42

MiddleEast&NorthAfrica 46

Countryoutlook 50

MerrillDataSitecontacts 60

HayGroupM&Acontacts 64

03

Welcome to the half-year 2010 edition of EMEA Deal Drivers, brought to you by mergermarket in association with Merrill DataSite and Hay Group. This Deal Drivers publication provides readers with a broad and detailed review of the major trends and activity in European M&A.

During the first half of 2010, European M&A activity increased by 25.3% compared to the same period in the preceding year and totalled €182.70bn. This compares favourably with the Us where M&A activity was down by 14.4% in comparison to the first half of 2009, with a total of €251.00bn worth of deals announced. Meanwhile, the Asia-Pacific region is going from strength to strength with almost €119.70bn worth of deals coming to market, an increase of close to 10% when compared to the same timeframe in 2009.

Europe’s share of global M&A for H1 2010 has increased to 27.5% from the 23.7% in H1 2009, clearly illustrating the central role that European dealmaking plays to overall deal flow.

However, despite all this positive news, the European market is still in flux, and talk is no longer about ‘returning to a pre-crisis market place’. Instead, M&A practitioners from the advisory and the corporate community alike are adjusting to the new economic environment and accepting that the status-quo has fundamentally altered. Particularly in relation to private equity, experts are talking about a return to basics with a greater

emphasis on improving the operations of a business, rather than an approach based largely on financial engineering.

While there are signs that the economy is in recovery mode, persistent market uncertainty and a continued lack of long-term visibility remain significant challenges. They are affecting corporates the world over and we are seeing only the strongest and bravest of players engaging in M&A.

As firms set forth to seize new opportunities and avoid potential pitfalls in the recovering market, Merrill Datasite offers the secure market-leading virtual data room (vDr) solution that streamlines the due diligence process, providing improved information management, as well as cost-cutting and time-saving capabilities in a deal market where such attributes are paramount. If you would like any information about how Merrill Datasite can assist you in executing your business M&A strategy, please visit our website at www.datasite.com.

As always, Merrill Datasite is delighted to present the half-year 2010 edition of EMEA Deal Drivers, the comprehensive review of M&A transaction activity and trends across Europe. We hope that you continue to find it useful.

paul Hartzell Senior Vice president, DataSite merrill Corporation Ltd, London

“ Meanwhile, Europe’s share of global M&A for H1 2010 has increased to 27.5% from the 23.7% in H1 2009, clearly illustrating the central role that European dealmaking plays to overall deal flow.”Paul Hartzell,Senior Vice PresidentMerrill DataSite

DEAl DrIvErs –EuRopE

Foreword

04


European M&A in the first half of 2010 increased by just over 25.0% in year-on-year comparison and totalled €182.70bn. After months, years in fact, of depressed M&A levels in the EMEA region, it looks as if things are looking up.

However, while there continue to be indicators suggesting economic recovery and a wider sense of stability returning, there are still contradictory messages pertaining to the opposite, and so the biggest challenge for M&A practitioners – both on the advisory and corporate side – is to read the many signs correctly.

In the last edition of Deal Drivers EMEA, we referred to experts predicting a flurry of deals in the Consumer sector as both smaller and medium-sized players come under pressure from the two blockbuster deals in the space – Kraft’s acquisition of UK chocolate maker, Cadbury, and Heineken’s purchase of Femsa. These experts had explained that medium-sized players would feel pressure to expand both their geographic footprint and product, in order to compete with these consumer behemoths, while smaller players could find themselves pushed out of the market altogether.

looking at the data now, six months on, it certainly appears as if the experts were right. The sector saw high levels of deal flow in the first half of the year, and a number of large deals involving Consumer companies. One example was Phillips-van Heusen’s €2.20bn acquisition of Tommy Hilfiger from private equity owner Apax – a great example of how private equity funds are making use of the valuation recovery to exit portfolio businesses. High levels of future activity are still being predicted in the Consumer sector, with the CEE region (excluding russia), the UK & Ireland, along with the Germanic region and Italy expected to see the highest number of deals come to market.

The Heat Chart further predicts that in the months to come, the UK will again become a hotbed of dealmaking – albeit for somewhat different reasons than during the heydays leading up to the financial crisis. M&A practitioners in the region have argued over recent months that, while the worst is certainly over, the number of business in the country that are in distress, and under increasing pressure to take dramatic action, is steadily increasing. They explained that while banks have largely propped up these businesses throughout the crisis, particularly in the mid-market, banks themselves are now under pressure and are being forced to act; this would lead to a new wave of distress-driven M&A activity.

looking at the Heath Chart, this certainly seems to be the case. mergermarket intelligence is predicting high levels of deal flow across the majority of sectors in the UK & Ireland, predominantly focusing in the ‘Old Economy’ areas such as the Industrials & Chemicals and Consumer spaces. similarly, the still highly fragmented and consolidation-active Business services space is expected to witness brisk deal flow.

Other sectors and geographies that are predicted to see high levels of activity in the months to come are the Industrials & Chemicals space and the TMT sector; these are predicted to be hot across much of the EMEA region. Given the attention the space is receiving on the global stage, it can also come as no surprise that companies engaged in Energy, Mining & Utilities will also be active. Finally, the EMEA region, which is already witnessing an influx of cash-rich Asian buyers, could see a substantial increase in dealmaking originating from further afield than had previously been considered typical.

by Catherine Ford, Remark

HeAt CHArtEMEAHEATCHArT–INTEllIGENCE

“ The Heat Chart further predicts that in the months to come, the UK will again become a hotbed of dealmaking – albeit for somewhat different reasons than during the heydays leading up to the financial crisis.”


CEE (excl.

Russia)

uK & Ireland

Germanic Benelux Italy Nordic Russia SEE France Iberia Middle East & North Africa

ToTAL

Industrials&Chemicals 136 65 104 177 59 51 37 36 30 29 41 765

Telecoms,Media&Technology(TMT)

141 93 88 178 25 49 20 20 47 36 42 739

Consumer 132 66 70 37 75 54 50 39 41 34 22 620

Energy,Mining&Utilities 98 125 51 25 42 27 56 41 13 21 46 545

FinancialServices 58 97 49 23 39 9 27 15 18 7 80 422

BusinessServices 35 82 29 11 14 25 9 3 18 19 8 253

leisure 35 53 27 4 23 12 9 23 18 24 14 242

Pharma,Medical&Biotech 20 37 56 22 15 48 3 4 19 10 6 240

Transportation 43 8 17 16 11 13 21 27 5 9 24 194

Construction 31 17 8 4 11 12 11 14 7 22 17 154

realEstate 28 21 18 11 8 5 11 13 4 7 24 150

Agriculture 16 3 2 1 5 3 1 1 10 42

Defence 2 12 1 1 1 1 2 20

Government 5 1 1 1 1 4 13

Other 1 2 5 5 13

ToTAL 781 681 520 509 324 312 258 243 223 218 343 4,412

Hot807060

The Intelligence Heat Chart is based on ‘Companies for sale’ tracked by mergermarket in Europe between 01/01/2010 and 30/06/2010. Opportunities are captured according to the dominant geography and sector of the potential target company.

warm504030

Cold20100

05

HeAt CHArtEMEAHEATCHArT–INTEllIGENCE

Note: mergermarket’s Heat Chart of predicted deal flow is based on the intelligence collected in our database relating to companies rumoured to be up for sale, or officially up for sale in the EMEA region. It is therefore is indicative of areas that are likely to be active in the months to come. The intelligence comes from a range of sources, including press reports, company statements and our own team of journalist gathering proprietary intelligence from M&A practitioners across the region. The data does not differentiate between small and large transactions nor between deals that could happen in the short or long-term.

ALL seCtors

At the end of 2009, we wrote about tender green shoots appearing on the M&A horizon, giving M&A practitioners across the EMEA region hope for the months to come. It appears our predictions were right – European M&A increased by over 25.0% in year-on-year comparison during the first half of 2010 when compared to the same period last year, with deals worth an aggregated €182.70bn coming to market.

However, while deal flow in the second quarter of the year was up by over 70.0% compared with that in the previous year (1,003 deals valued at €92.90bn), it was still one of the worst on mergermarket record – a clear indication that the market still has a lot of recovering to do before dealmakers can once again relax in the knowledge that deal flow is not likely to come crashing down around them. “Financiers, shareholders and regulators are scrutinising deals more rigorously than ever before. Dealmakers must become more vigilant during due diligence and take extra care to understand the impact of the merger/acquisition on the intangible capital of both sides of a deal,” said Deborah Allday, EMEA M&A Director, Hay Group.

Meanwhile, putting Europe’s share of global M&A into context, the region accounted for 27.5% of total global deal flow in the first half of 2010, compared to 23.7% in H1 2009. Global M&A totalled €665.30bn in H1 2010, up 8.7% from H1 2009, with deal count increasing by 15.9% to 5,147 announced deals.

so, where has this deal activity taking place? What are the hot sectors? Which countries have become the hotbeds of M&A activity? And most importantly, what has been driving deals? “The need for rapid growth appears still to be driving increased deal activity, with buyers focused on gaining access to new markets and customers. We have seen more cross-border deals as Asian investors have taken the opportunity to acquire devalued assets and gain a foothold in European markets,” said Deborah Allday from Hay Group.

Over the course of the financial crisis, the Financial services industry frequently topped the list of most active sectors, but it must be kept in mind that those deals were, in the majority of cases, driven by

a need to bail-out banks on the verge of collapse; as opposed to strategically motivated acquisition plays from peers.

With a degree of normality returning to the market, sector focus and deal rationale are shifting, pushing other sectors into the foreground. In terms of deal volume, the Industrials & Chemicals sector is at the vanguard of dealmaking, accounting for 20.8% of all EMEA deals. M&A transactions in this space were largely driven by corporates, who have used the period of economic downturn to redefine their strategy, and now that valuations have recovered to a satisfactory level, they are exiting non-core operations. Also accounting for a number of deals in the space are private equity funds, which acquired non-core industrial assets during the heyday of the asset class and are now looking, and finding, exit opportunities.

The second busiest sector in terms of volume was the Consumer sector, where deals were spurred on by fall-out from the large acquisitions earlier in the year – Kraft’s buy of Cadbury and Heineken’s purchase of Femsa. Both deals were expected to predicate further deal flow in the space, as smaller players grapple to ensure their own survival against the backdrop of these industry shifting deals. Indeed, one of the reporting period’s largest deals, Phillips-van Heusen’s €2.20bn acquisition of Tommy Hilfiger from private equity owner Apax, fell into the Consumer category. This deal is a great example of how private equity funds are making use of the valuation recovery to exit portfolio businesses.

In terms of value, the ever-domineering Energy, Mining & Utilities space again accounted for the lion’s share of deals, while the Industrial & Chemicals and Financial services sectors played a fairly significant role in dealmaking in the EMEA region.

looking at where M&A activity is taking place geographically, the UK & Ireland stood out after accounting for the bulk of the region’s deal flow, both in terms of value and volume. The region accounted for over 25.0% of deal flow in terms of value and just under 24.0% in terms of volume. “Those seeking to acquire assets in the UK or Ireland should not underestimate the risks. Undoubtedly,

companies facing a distress sale will already be grappling with a decrease in employee morale and motivation. senior employees or those with key skills may take the opportunity to move to competitors, thus reducing the overall value of the human capital. And customer service may have begun to suffer. All of these issues should be assessed when valuing the human capital asset base,” said Allday. There are expectations that the UK & Ireland will continue to see high levels of distressed driven deal flow as banks cut their losses, exercise their right to call in outstanding loans and force weaker players to repay their debts.

Given its role as Europe’s industrial heartland, it is not surprising that the Germanic region features highly on the rundown of most active geographies, closely behind the UK & Ireland. Given the weight that the Industrial space carries there, deals have been again led by cash-rich corporates and newly invigorated private equity players.

looking at the run down of the largest deals in the region during the reporting period, the near absence of private equity players illustrates the flight of this asset class into the mid-market. It will be interesting to observe whether the relaxing of the credit market’s will trigger a comeback of the mega-deals, or, as some commentators are predicting, that they are truly a thing of the past.

Credit suisse was the most active financial adviser in terms of value over the first half of the year, advising on 57 deals with a total value of €67.54bn. By volume, rothschild retain top spot, working on 72 deals worth €33.11bn. For legal advisers, sullivan & Cromwell topped in terms of value after working on 15 deals worth €65.36bn; Allen and Overy came in at number one by volume after advising on a total of 84 deals with a combined value of €44.39bn.

rothschild top the league tables for financial advisers by value and volume in the mid-market, working on 26 deals with a cumulative value of €2.91bn. linklaters are ahead in the legal advisers table by value at €3.71bn in 28 deals; DlA Piper knock them in to second place by volume, leading on 32 transactions worth €1.85bn.

DEAl DrIvErs – EUrOPE –ALL SECToRS

AllSECTOrS06

07

DEAl DrIvErs –EUrOPE – ALL SECToRS

ALL seCtorsTOP20ANNOUNCEDDEAlSFOrHAlF-YEArENDING30JUNE2010–EUrOPEANAllSECTOrS

Announced date

Status Bidder company Target company Sector Vendor company Deal value (€m)

1-Mar-10 l Prudential Plc American International Assurance Company limited

Financial services American International Group Inc

26,178

4-Jan-10 P Novartis AG Alcon Inc (52.00% stake) Pharma, Medical & Biotech Nestle sA 18,247

30-Jun-10 P KazakhGold Group limited OJsC Polyus Gold Energy, Mining & Utilities 8,367

30-Mar-10 P AXA sA AXA Asia Pacific Holdings (Asian businesses) Financial services AXA Asia Pacific Holdings limited

6,445

9-Mar-10 P sanofi-Aventis sA/Merck & Co Inc Jv

Intervet/schering-Plough Animal Health; and Merial limited

Pharma, Medical & Biotech Merck & Co Inc; and sanofi-Aventis sA

6,065

28-Apr-10 P PPl Corporation E.ON Us llC Energy, Mining & Utilities E.ON AG 5,767

11-Jan-10 C Heineken Nv FEMsA Cerveza sA de Cv Consumer Fomento Economico Mexicano sAB de Cv

5,300

11-Mar-10 P BP Plc Devon Energy Corporation (Assets in the deepwater Gulf of Mexico, Brazil and Azerbaijan)

Energy, Mining & Utilities Devon Energy Corporation 5,116

28-Feb-10 C Merck KGaA Millipore Corporation Pharma, Medical & Biotech 4,960

5-Jan-10 C Mikhail Gutseriyev (Private Investor)

NK russneft OAO Energy, Mining & Utilities En+ Group ltd 4,595

14-Jun-10 C Aerellia Investments limited; Becounioco Holdings limited; and Kaliha Finance limited

JsC Uralkali (53.20% stake) Industrials & Chemicals Madura Holding limited 4,254

18-Mar-10 P Teva Pharmaceutical Industries ltd

ratiopharm GmbH Pharma, Medical & Biotech 4,200

12-May-10 C sAP AG sybase Inc Business services 4,044

28-May-10 P royal Dutch shell Plc East resources Inc Energy, Mining & Utilities Kohlberg Kravis roberts & Co

3,802

2-May-10 P Norsk Hydro AsA Alumina do Norte do Brasil sA (57.00% stake); Aluminio Brasileiro sA (51.00% stake); Companhia de Alumina do Para (61.00% stake); and Paragominas bauxite mine (60.00% stake)

Industrials & Chemicals vale sA 3,685

8-Apr-10 P British Airways Plc Iberia lineas Aereas de Espana sA Transportation 3,598

24-Jun-10 P resolution limited AXA sA (UK life and pensions businesses) Financial services AXA sA 3,330

20-Jan-10 C Alstom sA; and schneider Electric sA

Areva T&D sA Industrials & Chemicals ArEvA sA 3,180

7-Jun-10 P Grifols sA Talecris Biotherapeutics Inc Pharma, Medical & Biotech Cerberus Capital Management lP

3,129

15-Feb-10 l Yara International AsA Terra Industries Inc Industrials & Chemicals 3,092

C= Completed; P= Pending; l= lapsed

DEAl DrIvErs – EUrOPE – ALL SECToRS

08

VoLuME

VoLuME

2007 2008 2009 H12010200620052004

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

362.4

58.0

51.155.1

6.8

553.0

77.7

69.3

711.2

78.2

75.1

866.8

91.6

74.1 128.918.8

525.4

61.157.4 29.6

33.9

231.0

58.8 62.2 67.1 50.7 27.8

18.7

13.58.9 9.3 10.3 7.6 4.6 2.5

value(€bn

)

>€501m €251m-€500m €101m-€250m

€15m-€100m €5m-€14m

2007 2008 2009 H12010200620052004

volume

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

164346

747

1,192

2,058

217432

1,423

983

2,203

216481

1,566

1,022

2,550

258

1,634

466

1,119

2,801

1,123

266314

54

177383

1,255

835

2,647

213

679

525

2,048

115

83

194

247

316

354

206

107

85

>€501m €251m-€500m €101m-€250m

valuenotdisclosed€15m-€100m €5m-€14m

QUArTErlY M&A ACTIvITY – All sECTOrs

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Quarter ended

Valu

e (€

m)

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

Quarter ended

ALL seCtorsEUrOPEANM&ASPlITBYDEAlSIzE

Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Europe.

VALuE

VALuE

Moving average trend line


9

0

50

100

150

200

250

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Quarterended

volume

NorthAmericanbidderacquiringEuropeantarget

TotalNorthAmerican/Europeandeals

EuropeanbidderacquiringNorthAmericantarget

VoLuME

TrANsATlANTIC DEAls

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q 04

Q204

Q104

Valu

e (€

m) Volum

e

Quarter ended

0

40

80

120

160

200

240

Value (€m) Volume




0

20,000

40,000

60,000

80,000

100,000

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Quarterended

value (€m)




0

20,000

40,000

60,000

80,000

100,000

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Quarterended

value (€m)

ALL seCtorsEUrOPEANBUYOUTS EUrOPEANEXITS

Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Europe.

Based on dominant location of target and bidder and excludes all buyouts.

VALuE

0

20,000

40,000

60,000

80,000

100,000

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m) Volum

e

Quarter ended

0

50

100

150

200

250

300

350

400

Value (€m) Volume

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q 04

Q204

Q104

Valu

e (€

m) Volum

e

Quarter ended

0

40

80

120

160

200

240

Value (€m) Volume


10

ALL seCtorsMIXOFDEAlSBYGEOGrAPHICrEGION

MIX OF DEAls BY INDUsTrY sECTOr

VALuE

VALuE

VoLuME

VoLuME

Based on announced deals, excluding those that lapsed or were withdrawn. Geographic region is determined with reference to the dominant location of the target.

25.4%

19.4%

11.2%2.8%

7.3%

4.9%

7.6%

18.8%

2.6%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic

Central & Eastern Europe

Other

25.4%

19.4%

11.2%2.8%

7.3%

4.9%

7.6%

18.8%

2.6%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

23.8%

15.3%

11.9%5.2%

7.0%

7.2%

14.2%

12.9%

2.4%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

14.1%

0.6%0.3%

10.9%

5.9%

9.1%

19.7%

10.9%

1.6%

5.5%

15.8%

1.7% 3.9%

Industrials & Chemicals

Financial Services

Business Services

Consumer

Energy, Mining & Utilities

TMT

Leisure

Transportation

Pharma, Medical & Biotech

Construction

Real Estate

Defence

Agriculture

14.1%

0.6%0.3%

10.9%

5.9%

9.1%

19.7%

10.9%

1.6%

5.5%

15.8%

1.7% 3.9%


Financial Services

Business Services

Consumer


TMT

Leisure

Transportation


Construction

Real Estate

Defence

Agriculture

20.8%

9.0%

11.3%

15.7%

7.9%

13.2%

3.9%

3.3%

7.0%

4.7%

1.8% 0.5%1.0%

Industrials & Chemicals & Engineering

Financial Services

Business Services

Consumer

Energy, Mining, Oil & Gas

TMT

Leisure

Transportation

Life Sciences & Healthcare

Construction

Real Estate

Defence

Agriculture

Based on announced deals, excluding those that lapsed or were withdrawn, where the dominant location of the target is in Europe. Industry sector is based on the dominant industry of the target.


11

ALL seCtorsFINANCIAlADvISErS

lEGAlADvISErS

Top 20 – RANKED By VALuE Top 20 – RANKED By VoLuME


H1 2009

H1 2010

Company name Value (€m)

Number of deals

3 1 Credit suisse 67,534 57

1 2 Goldman sachs 61,501 40

2 3 Citigroup 51,202 25

4 4 Morgan stanley 41,156 54

8 5 JPMorgan 41,044 40

7 6 Deutsche Bank 40,287 40

11 7 rothschild 33,111 72

5 8 lazard 31,641 50

17 9 Barclays Capital 25,170 21

6 10 Bank of America Merrill lynch 24,034 20

10 11 Greenhill & Co 20,781 8

9 12 UBs Investment Bank 19,981 33

23 13 HsBC Bank 18,332 18

25 14 Nomura Holdings 13,490 19

18 15 BNP Paribas 11,970 21

31 16 Credit Agricole CIB 9,992 13

72 17 sG 9,332 9

85 18 BMO Capital Markets 9,318 3

26 19 Blackstone Group Holdings 8,765 4

16 20 royal Bank of scotland Group 7,563 11

H1 2009

H1 2010


Number of deals

3 1 sullivan & Cromwell 65,364 15

7 2 Cravath swaine & Moore 55,173 10

20 3 simpson Thacher & Bartlett 47,513 20

25 4 Cleary Gottlieb steen & Hamilton 46,042 28

16 5 Allen & Overy 44,385 84

4 6 skadden Arps slate Meagher & Flom 43,119 23

58 7 Weil Gotshal & Manges 40,486 31

11 8 Herbert smith/Gleiss lutz/stibbe 40,428 38

18 9 slaughter and May 40,395 24

2 10 linklaters 37,499 81

94 11 Debevoise & Plimpton 36,611 5

1 12 Freshfields Bruckhaus Deringer 34,407 59

37 13 Norton rose 33,661 24

8 14 Davis Polk & Wardwell 30,940 8

23 15 Blake, Cassels & Graydon 29,234 12

13 16 Wachtell, lipton, rosen & Katz 26,732 6

38 17 Dewey & leBoeuf 21,465 30

9 18 Homburger 21,282 8

5 19 latham & Watkins 20,136 36

6 20 Clifford Chance 16,505 51

H1 2009

H1 2010


Number of deals


3 2 KPMG 5,575 71

6 3 PricewaterhouseCoopers 4,887 62



5 6 Deloitte 4,133 54

2 7 lazard 31,641 50


7 9 JPMorgan 41,044 40



11 12 Ernst & Young 1,171 30

18 13 DC Advisory Partners 4,117 29

12 14 Citigroup 51,202 25

21 15 Global M&A 80 23


15 17 BNP Paribas 11,970 21



20 20 HsBC Bank 18,332 18

H1 2009

H1 2010


Number of deals

3 1 Allen & Overy 44,385 84


6 3 DlA Piper 4,112 76

5 4 CMs 4,262 60



10 7 Jones Day 8,395 40

11 8 Hogan lovells 8,785 39


30 10 sJ Berwin 5,066 38


40 12 Mannheimer swartling 4,371 33


18 14 Dewey & leBoeuf 21,465 30

9 15 White & Case 6,303 30


20 17 vinge 2,733 28

7 18 Baker & McKenzie 9,030 27

15 19 Eversheds 332 26

14 20 loyens & loeff 11,502 25

The financial adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010, excluding lapsed and withdrawn deals. The tables are pan-European and cover all sectors.

The legal adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010 and include lapsed and withdrawn deals. The tables are pan-European and cover all sectors.


ALL seCtorsFINANCIAlADvISErS–MID-MArkET(€10M<DEAlS<€250M)

lEGAlADvISErS



H1 2009

H1 2010


Number of deals


1 2 lazard 2,472 21






9 8 Deloitte 1,285 21

10 9 KPMG 1,250 23


84 11 UniCredit Group 1,053 12

2 12 JPMorgan 1,036 6

25 13 Jefferies & Company 992 12

8 14 Goldman sachs 960 6

26 15 Nomura Holdings 872 7

13 16 BNP Paribas 809 8

- 17 leonardo & Co 757 4

42 18 HsBC Bank 755 6

136 19 Hawkpoint 693 7

22 20 sEB Enskilda 655 7

H1 2009

H1 2010


Number of deals


11 2 DlA Piper 1,845 32


6 4 Jones Day 1,719 16

3 5 Allen & Overy 1,641 22





7 10 CMs 1,094 19

26 11 sJ Berwin 1,071 14

27 12 Hogan lovells 999 18

5 13 Herbert smith/Gleiss lutz/stibbe 921 13

25 14 Kirkland & Ellis 889 7

10 15 latham & Watkins 880 11

113 16 simpson Thacher & Bartlett 818 6

76 17 Hammonds 797 7

85 18 Cederquist 722 7

20 19 Baker & McKenzie 700 7

274 20 De Pardieu Brocas Maffei 698 7

H1 2009

H1 2010


Number of deals


7 2 KPMG 1,250 23

1 3 lazard 2,472 21


5 5 Deloitte 1,285 21





43 10 UniCredit Group 1,053 12


8 12 Ernst & Young 586 10



22 15 M&A International 176 8

24 16 Nomura Holdings 872 7



19 19 Grant Thornton Corporate Finance 571 7

2 20 JPMorgan 1,036 6

H1 2009

H1 2010


Number of deals

4 1 DlA Piper 1,845 32


3 3 Allen & Overy 1,641 22


7 5 CMs 1,094 19


6 7 Jones Day 1,719 16


28 9 sJ Berwin 1,071 14



241 12 Travers smith 642 13


73 14 Olswang 529 12



11 17 Wiersholm 659 10


30 19 Chiomenti studio legale 590 9

61 20 Arthur Cox 587 9

The financial adviser mid-market eague tables by value and volume have been run from 01/01/2010 to the 30/06/2010, excluding lapsed and withdrawn deals. The tables are pan-European and cover all sectors.

The legal adviser mid-market league tables by value and volume have been run from 01/01/2010 to the 30/06/2010 and include lapsed and withdrawn deals.The tables are pan-European and cover all sectors.

12

ALL seCtorsPrADvISErS

PrADvISErS–MID-MArkET(€10M<DEAlS<€250M)



H1 2009

H1 2010


Number of deals

1 1 Brunswick Group 57,272 60

4 2 FD 38,510 65

3 3 Kekst and Company 19,565 17

5 4 Maitland (AMO) 14,966 34

2 5 Finsbury Group 14,084 27

86 6 Joele Frank Wilkinson Brimmer Katcher 12,062 6

26 7 sard verbinnen & Co 8,389 7

10 8 Hering schuppener Consulting (AMO) 7,807 13

6 9 Estudio de Comunicacion 7,503 6

- 10 Hinton & Associates 6,445 1

13 11 M:Communications 6,243 13

15 12 Citigate 5,758 40

7 13 Barabino & Partners 5,688 12

23 14 Tulchan Communications 4,642 15

- 15 Temple Bar Advisory 4,314 4

130 16 rw konzept 4,200 4

29 17 Euro rsCG C&O (AMO) 3,630 3

8 18 Abernathy MacGregor Group (AMO) 3,422 10

33 19 Image sept 3,192 5

11 20 Hill & Knowlton 3,148 6

H1 2009

H1 2010


Number of deals

2 1 FD 2,378 26

7 2 Citigate 2,144 20


3 4 Maitland (AMO) 1,924 16


4 6 M:Communications 922 5

11 7 Tulchan Communications 697 7

53 8 Pelham Bell Pottinger 628 9

29 9 Estudio de Comunicacion 458 2

22 10 Barabino & Partners 382 5

27 11 Kekst and Company 329 3

14 12 Community Group 321 4

38 13 Cubitt Jacobs & Prosek Communications 310 3

8 14 Abernathy MacGregor Group (AMO) 271 2

60 15 College Hill 266 5

59 16 Hudson sandler 264 2

10 17 Image sept 255 4

17 18 Merlin Pr 255 3

18 19= Hill & Knowlton 250 1

- 19= sPJ (AMO) 250 1

H1 2009

H1 2010


Number of deals

1 1 FD 38,510 65


5 3 Citigate 5,758 40

4 4 Maitland (AMO) 14,966 34


15 6 Kekst and Company 19,565 17

17 7 Tulchan Communications 4,642 15

10 8 Hering schuppener Consulting (AMO) 7,807 13

8 9 M:Communications 6,243 13

6 10 Barabino & Partners 5,688 12

24 11 College Hill 1,911 12


7 13 Abernathy MacGregor Group (AMO) 3,422 10

31 14 Publicis Consultants 2,250 10

29 15 Hogarth Partnership 404 10

9 16 Buchanan Communications 98 8

20 17 sard verbinnen & Co 8,389 7

37 18 Hudson sandler 2,834 7

34 19 Merlin Pr 1,986 7

18 20 Ad Hoc Communication 590 7

H1 2009

H1 2010


Number of deals

2 1 FD 2,378 26


5 3 Citigate 2,144 20

3 4 Maitland (AMO) 1,924 16



10 7 Tulchan Communications 697 7

6 8 M:Communications 922 5

7 9 Barabino & Partners 382 5

37 10 College Hill 266 5

16 11 Community Group 321 4

8 12 Image sept 255 4

13 13 Ad Hoc Communication 231 4

33 14 Publicis Consultants 147 4

20 15 Hogarth Partnership 82 4

11 16 Buchanan Communications 77 4

43 17 Kekst and Company 329 3

21 18 Cubitt Jacobs & Prosek Communications 310 3

27 19 Merlin Pr 255 3

74 20 Powerscourt 245 3

The Pr adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010 and exclude lapsed and withdrawn deals.The tables are pan-European and cover all sectors.

The Pr adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010 and exclude lapsed and withdrawn deals.The tables are pan-European and cover all sectors.


13

DEAl DrIvErs – EUrOPE –FINANCIAL SERVICES

A number of factors in the Financial Services sector are likely to help determine its M&A landscape moving forward, with continuing distressed sales still prevalent. Another aspect that will come to the forefront is the strength of Asian players moving to buy European assets. All of this follows what has already been an eventful year in the sector.

Ongoing non-core disposals by banks throughout Europe, as they pay back their respective states following a series of bailout loans, will continue to largely dominate the financial M&A landscape. A long list of banks including Allied Irish Bank, Bank of Ireland, ING, KBC Group, lloyds Banking Group and the royal Bank of scotland are in the middle of such disposals which need to be completed by 2013. some deals have already been completed this year, such as lloyds’ partial sale of Bank of scotland Integrated Finance to Cavendish square Partners for £480m and rBs offloading both of its Kazakhstan and Indian divisions to HsBC.

However, there is still a large number of deals under these particular circumstances which are expected to be closed before the year’s out. These include the likes rBs’ multi-billion pound sale of Worldpay card service business and its William & Glyn branches, which are expected to be finalised before the year-end.

KBC is another that has forged ahead with a raft of planned disposals, some of which are likely to come to fruition in the not too distant future. Having already sold a combined total of around €2.00bn worth of assets this year through the sales of its KBl European Private Bankers, its Ireland and UK KBC Asset Management businesses alongside KBC Financial Products, it still hopes to dispose of further assets this year. These could include its london stock broking business Peel Hunt, and its Belgian retail banking and insurance operations Centea and Fidea, which are expected to commence in Q4.

Meanwhile, Europe could prove to be a busy hunting ground for Asian companies looking to cherry pick bargains due to the distressed state of many of their European counterparts.

A recent example of an Asian company zoning in on a European counterpart is that of listed Japan-based insurance company, NKsJ Holdings, which acquired a 93.36% of Turkey-based non-life insurance company Fiba sigorta Anonim sirketi for €253m. Fiba had interest from European bidders, but none were able to match NKsJ’s price. The clout many Asian players have above their rivals is likely to spur similar deals as we move forward.

The same could be said for the likes of Australian and Canadian firms, which also shielded themselves sensibly away from the financial crisis.

One of the headline-grabbing ‘deal-that-never-was’ stories saw Prudential fail in its €26.20bn approach for AIA. This could generate a break-up of either, or both, insurance giants, leading predatory peers to scour around for parts of the respective firms.

The UK’s proposed re-addressing and reshaping of its financial hub through the introduction of the Independent Banking Commission could be another factor that leads to a further wave of sales. The commission will look into the possibility of separating institutional banks from their retail banks and if this model is decided upon, it is likely to spur further and greater disposals among the banking community.

With the likes of the spanish banking giant, santander on the lookout for more acquisitions, and with a bid already in for rBs’ retail assets, the door could be opened for further buys as well as the likely opening up of the market for a host of new entrants.

linklaters are ahead in the legal advisers table by volume from 16 deals; slaughter and May are ahead by value having advised on €29.92bn. On the financial advising front, JPMorgan are top by value on €10.40bn and KPMG are ahead by volume on 15 deals.

by paul Francis-Grey

FinAnCiAL serviCes

FINANCIAlSErIvCES

“ The UK’s proposed re-addressing and reshaping of its financial hub through the introduction of the Independent Banking Commission could be another factor that leads to a further wave of sales.”

14

FinAnCiAL serviCesTOP15ANNOUNCEDDEAlSFOrHAlF-YEArENDING30JUNE2010-EUrOPEANFINANCIAlSErvICESSECTOr


Announced date

Status Bidder company Target company Vendor company Deal value (€m)

1-Mar-10 l Prudential Plc American International Assurance Company limited

American International Group Inc 26,178

30-Mar-10 P AXA sA AXA Asia Pacific Holdings (Asian businesses) AXA Asia Pacific Holdings limited 6,445

24-Jun-10 P resolution limited AXA sA (UK life and pensions businesses) AXA sA 3,330

9-Jun-10 P Banco santander sA Grupo Financiero santander serfin sA de Cv (24.90% stake)

Bank of America Corporation 2,089

17-Feb-10 C International Petroleum Investment Company Barclays Plc (5.20% stake) 1,428

17-May-10 P Man Group Plc GlG Partners Inc 1,373

21-May-10 P The Hinduja Group KBl European Private Bankers sA KBC Group Nv 1,350

16-Feb-10 C JPMorgan Chase & Co rBs sempra Commodities llP (European and Asian operations)

rBs sempra Commodities llP (subsidiary of royal Bank of scotland Group Plc)

1,235

27-Apr-10 C National Pension reserve Fund Bank of Ireland Plc (20.77% stake) 1,036

25-Jun-10 P Banco de sabadell sA Banco Guipuzcoano 807

18-Feb-10 C Credit Agricole sA Cassa di risparmio della spezia spA (80.00% stake); and Intesa sanpaolo spA (96 branches)

Intesa sanpaolo spA 740

4-Feb-10 C China Investment Corporation Apax Partners llP (2.30% stake) 697

20-Apr-10 P Marginalen AB Citibank International Plc (swedish operations)

Citibank International Plc 640

20-May-10 C CvC Capital Partners; Cinven limited; and Oak Hill Capital Partners lP

Avolon Aerospace limited (undisclosed stake) 601

10-Feb-10 C Affiliated Managers Group Inc Pantheon ventures limited russell Investments 564


15

MIX OF DEAls BY GEOGrAPHIC rEGION

QUArTErlY TrENDs

VALuE

VALuE

VoLuME

VoLuME


FinAnCiAL serviCes

56.3%

2.8%0.3%

8.4%

9.4%

11.5%

8.0%

1.6% 1.6%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

56.3%

2.8%0.3%

8.4%

9.4%

11.5%

8.0%

1.6% 1.6%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

31.1%

9.6%

6.8%7.3%

10.7%

5.6%

13.0%

11.9%

4.0%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other


0

25

50

75

100

125

150

175

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

Quarter ended

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

Quarter ended



16

FinAnCiAL serviCesFINANCIAlADvISErS

lEGAlADvISErS



H1 2009

H1 2010


Number of deals

11 1 JPMorgan 10,401 6



36 4 Macquarie Group 6,445 3




- 8 rBC Capital Markets 3,330 1


88 10 santander Global Banking and Markets 2,089 1

6 11 lazard 1,985 6

4 12 Citigroup 1,984 6


- 14= Moelis & Company 1,373 1

9 14= Perella Weinberg Partners 1,373 1

53 16= KBC securities 1,350 1

- 16= spencer House Partners 1,350 1

- 18 Banca IMI/Intesa sanpaolo 1,277 3

92 19= Tegris 1,069 1

- 19= violy & Company 1,069 1

H1 2009

H1 2010


Number of deals


65 2 Norton rose 29,570 9






- 8= Cravath swaine & Moore 26,178 1

119 8= Debevoise & Plimpton 26,178 1

27 10 Davis Polk & Wardwell 23,031 2

10 11 Mallesons stephen Jaques 6,459 4

42 12 Freehills 6,459 3

45 13 Allens Arthur robinson 6,445 1



24 16 Allen & Overy 3,055 14


- 18 Concord & Partners law Offices 2,411 1

122 19 Arthur Cox 1,780 8

- 20 Garrigues 1,712 6

H1 2009

H1 2010


Number of deals

4 1 KPMG 931 15



2 4 JPMorgan 10,401 6


8 6 lazard 1,985 6


1 8 UBs Investment Bank 101 6


20 10 DC Advisory Partners 663 5

13 11 rothschild 202 5


17 13 lexicon Partners 271 4



- 16 Macquarie Group 6,445 3

- 17 Banca IMI/Intesa sanpaolo 1,277 3

16 18 HsBC Bank 337 3

12 19 PricewaterhouseCoopers 233 3

32 20 Deloitte 204 3

H1 2009

H1 2010


Number of deals


2 2 Allen & Overy 3,055 14


20 4 Norton rose 29,570 9

122 5 Arthur Cox 1,780 8


16 7 Dewey & leBoeuf 1,520 7


- 9 Garrigues 1,712 6






23 15 Mallesons stephen Jaques 6,459 4

- 16 Cuatrecasas, Goncalves Pereira 712 4

28 17 KPMG Abogados 633 4

92 18 Mannheimer swartling 417 4

19 19 Ashurst - 4

45 20 Freehills 6,459 3

The financial adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010, excluding lapsed and withdrawn deals. The tables are pan-European and cover the Financial services sector.

The legal adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010 and include lapsed and withdrawn deals.The tables are pan-European and cover the Financial services sector.


17

Deal flow in the European Industrials space picked up in the first half of the year, which saw an increase in both the value and volume of collated deals. practitioners have argued that consolidators were able to take advantage of lower prices by picking up distressed and undervalued companies. Additionally, the sector has seen a great deal of non-core assets coming to market from corporates intent on focussing on their core competencies.

The number of deals with a European Industrials target increased to 410 transactions announced in the first six months of 2010, from 378 in the same period last year Total value, however, jumped from just under €6.00bn in the first half of 2009 to €25.80bn in 2010 as the likes of French Areva’s substation and grid network builder Areva T&D, iconic swedish car brand volvo Car Corporation, and the UK’s producer of uninterrupted power components, Chloride, fell to foreign and domestic predators with an eye for a bargain.

More specifically, Industrials deals in the first half were a combination of slimming down of non-core disposals, deals done under pressure and revisited deals.

The €3.81bn sale in January of Areva’s electricity transmission and distribution business to French power group schneider Electric, for example, was in many ways typical of continued attempts to offload non-core Industrial assets which characterised the latter part of 2009. The transaction came about because state-owned Areva’s plans to focus on core nuclear reactor and mining activities led to political and financial pressure to find at least some of the estimated €5.00bn needed to pay for this transition.

st. louis-Missouri-based Emerson’s €1.27bn acquisition of UK-based power supply systems maker Chloride was the third attempt following two offers in 2008. The move was, in part, made possible by the fall in sterling against the Us Dollar, making a UK takeover more affordable for Emerson.

The final sale of the iconic swedish car brand volvo Cars Corporation also came after several attempts, but Ford Motor Company’s attempt to mitigate its financial difficulties by offloading volvo Cars, along with other luxury PAG brands, had not been a happy one. Having acquired volvo Cars for €5.64bn in 1999, Ford sold the company to Chinese auto group Zhejiang Geely for €1.34bn in March.

Elsewhere in the Automotive sector, another cross shareholding deal with renault-Nissan and Daimler’s decision to take corresponding 3.0% stakes in each other against a cooperation agreement, showed that the European and Japanese car and truck manufacturing industry is inching ever-closer after a similar deal between suzuki and volkswagen earlier in the year.

As the Industrials sector begins the second half of 2010, there are signs that the trend of reintroducing the deals of yesteryear is likely to accelerate. Despite failing to sell several similar assets in 2009, industrial group ThyssenKrupp has returned to its non-core disposal list with the sale of its steel and aluminium forming division, ThyssenKrupp Umformtechnik. similarly, in the increasingly active chemicals niche, fertiliser giant K+s is confident enough that its Compo brand will reach a reasonable valuation after placing it for sale; meanwhile Belgian chemical group solvay is still sporting a €3.00bn war chest from the sale of its pharmaceuticals division to Abbot, with German flavourings company symrise an oft-mentioned potential target.

The outlook may still be mixed. One European steel banker recently pointed out that while small deals are still possible, an ever-changing price outlook for the raw materials on which so many industrials are based makes it difficult to predict future M&A activity in the metal industry. A chemicals banker also argued that, while the Compo sale and that of latex-maker

Polymerlatex will certainly keep the market alive in the summer months, a Euro weakened by the continent’s sovereign debt crisis could yet make solvay and more traditional buyers such as Arkema and lanxess more cautious about deals.

For Industrials M&A, the second half of 2010 will be a testing time.

In the sector, JP Morgan is ranked in first place for financial advisers by value with seven deals worth €9.89bn; rothschild are top by volume on 16 deals. In terms of legal advisers, Freshfields Bruckhaus Deringer beat linklaters to the highest spot for both volume and value, advising on 16 deals worth €13.07bn.

by Thomas Williams and Johannes Koch

DEAl DrIvErs – EUrOPE –INDuSTRIALS & CHEMICALS

industriALs & CHemiCALs

INDUSTrIAlS&CHEMICAlS

“ The number of deals with a European Industrials or Automotive target stayed relatively flat with around 250 transactions closed in the first six months; as against 276 in the same period of 2009.”

18

industriALs & CHemiCALsTOP15ANNOUNCEDDEAlSFOrHAlF-YEArENDING30JUNE2010–EUrOPEANINDUSTrIAlS&CHEMICAlSSECTOr


Announced date


14-Jun-10 C Aerellia Investments limited; Becounioco Holdings limited; and Kaliha Finance limited

JsC Uralkali (53.20% stake) Madura Holding limited 4,254

2-May-10 P Norsk Hydro AsA Alumina do Norte do Brasil sA (57.00% stake); Aluminio Brasileiro sA (51.00% stake); Companhia de Alumina do Para (61.00% stake); and Paragominas bauxite mine (60.00% stake)

vale sA 3,685

20-Jan-10 C Alstom sA; and schneider Electric sA Areva T&D sA ArEvA sA 3,180

15-Feb-10 l Yara International AsA Terra Industries Inc 3,092

23-Jun-10 P BAsF sE Cognis GmbH Gs Capital Partners; Permira; and sv life sciences

2,408

28-Mar-10 P Zhejiang Geely Holding Group Company limited

volvo Cars Corporation Ford Motor Company 1,342

19-Jan-10 C vinci sA Cegelec sA Qatari Diar real Estate Investment Company 1,292

18-Jan-10 C Tyco International ltd Brink's Home security Holdings Inc 1,277

29-Jun-10 P Emerson Electric Company Chloride Group Plc 1,270

7-Apr-10 C Nissan Motor Co ltd; and renault sA Daimler AG (3.10% stake) 1,168

19-May-10 P Honeywell International Inc sperian Protection sA Essilor International sA 1,112

8-Jun-10 l ABB ltd Chloride Group Plc 1,083

20-Jun-10 P Corn Products International Inc National starch & Chemical Company Akzo Nobel Nv 1,049

17-May-10 P ABB ltd ABB ltd (India) (22.89% stake) 772

8-Jan-10 C Investment group led by Alexander Katunin; and vnesheconombank

Industrial Union of Donbass Corporation (50.01% stake)

694


19

industriALs & CHemiCALsMIX OF DEAls BY GEOGrAPHIC rEGION

QUArTErlY TrENDs

VALuE

VALuE

VoLuME

VoLuME


11.5%

18.9%

30.9%

2.9%2.1%

1.5%

8.8%

23.3%

0.2%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

11.5%

18.9%

30.9%

2.9%2.1%

1.5%

8.8%

23.3%

0.2%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

15.1%

22.7%

15.4%7.1%

3.7%

6.6%

15.4%

13.2%

1.0%

UK & Ireland

Germany

France

Italy

Iberia

Benelux

Nordic


Other

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

Quarter ended

0

50

100

150

200

250

300

350

400

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q1 06

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

Quarter ended




20

industriALs & CHemiCALsFINANCIAlADvISErS

lEGAlADvISErS



H1 2009

H1 2010


No. of deals

8 1 JPMorgan 9,886 7


7 3 lazard 7,846 10




23 7 BNP Paribas 5,254 4

- 8 Credit Agricole CIB 4,405 3

93 9 HsBC Bank 4,251 3



111 12 sG 3,111 4

25 13 KPMG 2,190 15

- 14 Investec 1,354 2

- 15 Hawkpoint 1,292 1

5 16 Greenhill & Co 1,270 1


- 18 Mizuho Financial Group 1,168 2

- 19= Philippe villin Conseil 954 1

- 19= ricol et lasteyrie et Associes 954 1

H1 2009

H1 2010


No. of deals




130 4 Wikborg rein & Co 6,791 4

- 5 Thommessen 6,777 2

17 6 Allen & Overy 5,497 14

- 7 Davis Polk & Wardwell 5,267 4

55 8 Bredin Prat 4,099 5

2 9 shearman & sterling 3,868 4

219 10 selmer 3,711 4

- 11 veirano Advogados 3,685 1


- 13 Darrois villey Maillot Brochier 3,576 3

32 14 Gide loyrette Nouel 3,291 3

20 15 Davies Ward Phillips & vineberg 3,092 1




54 19 Wiersholm 1,828 4


H1 2009

H1 2010


No. of deals


4 2 KPMG 2,190 15


17 4 lincoln International 232 12

9 5 lazard 7,846 10


3 7 Deloitte 36 10

22 8 JPMorgan 9,886 7

8 9 Global M&A 32 7





- 14 Metzler Corporate Finance 17 5


28 16 Citigroup 7,574 4

11 17 BNP Paribas 5,254 4

111 18 sG 3,111 4



H1 2009

H1 2010


No. of deals



7 3 Allen & Overy 5,497 14

8 4 Jones Day 436 12


2 6 CMs 89 11


9 8 DlA Piper 62 10



71 11 sJ Berwin 899 8

36 12 Noerr 13 8



34 15 Cuatrecasas, Goncalves Pereira 430 7



- 18 Gianni, Origoni, Grippo & Partners 1,183 6

51 19 Pinsent Masons 330 6

62 20 roschier 112 6

The financial adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010, excluding lapsed and withdrawn deals. The tablesare pan-European and are based on the following sectors: Automotive; Chemicals & Materials; Industrials- electronics; automation and products and services; and Manufacturing- other.

The legal adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010 and include lapsed and withdrawn deals. The tables are pan-European and are based on the following sectors: Automotive; Chemicals & Materials; Industrials- electronics, automation and products and services; and Manufacturing- other.

21


All of the Energy deals in H1 2010 came in the shadow of Bp’s Gulf of Mexico oil spill, with the event having consequences for the company, the whole industry and also oil prices. News flow on the situation is being published daily and is likely to continue beyond the end of this year. At the time of publication, the latest development is the uS$30.00bn disposal plan, which is to be rolled out over the next 18 months (announced 27 July).

Ironically, it was BP that made the biggest oil & gas deal in the past half year, buying deep water assets in the Gulf of Mexico, Brazil and Azerbaijan from Devon Energy Corporation for €5.12bn.

In the North sea, despite numerous opportunities on the market, only a few transactions were completed in the first half of 2010. The recovery of oil prices, which is easing pressure on sellers, and overall price expectations, were named by a North sea executive as the main reasons for the lack of deals. some of the assets that were on the market but have not been sold include €775m of Italian state oil company ENI’s assets, properties owned by royal Dutch shell, Noble Energy of the Us and French utility GDF suez.

The two main transactions in the oil and gas sector during the first half were scottish and southern Energy’s €238m purchase of the assets of Hess, the Us-listed energy group, and Dana Petroleum’s €328m acquisition of suncor’s assets. Dana, which is the second biggest independent in the North sea after Premier Oil, is itself now a takeover target by the Korea National Oil Corporation (KNOC).

If the deal actually happens, it would be the largest concluded by Asian investors in this part of the world. The Korean giant has been known in the industry to seek production capacity through M&A and was also rumoured to be eying privately held Kosmas Energy’s stake in the Jubilee Field in Ghana, a significant new African discovery. Chinese buyers are also widely known investors in Africa, although most of their deals are done on a government-to-government basis, rather than as straight forward M&A.

The sector has not seen much distressed M&A so far this year but there are expectations of mergers from larger companies seeking to

strengthen their balance sheets. Earlier this year, Acergy, the Norwegian-listed energy company, merged with subsea 7, its Norwegian-listed counterpart, and more deals could follow on the Norwegian side of the North sea, especially between highly leveraged entities.

The equity markets, despite Petrobras’ appetite for a mega rights issue of Us$25.00bn, do not seem to have fully rebounded. Although a few major IPOs are in the pipeline, the timeframe is as yet unknown.

On the mining side, new listings dominated the first half of the year. russian mining conglomerate rusal floated in Hong Kong. Although the listing was supposed to set a trend for future russian IPOs, the disappointing trading of rusal and the entities roughing up at the hand of the Hong Kong listing authorities put a large question over whether many others will follow. Petropavlovsk, the russian mining company, is one of the companies that has declared its intention to list on the Asian exchange.

The recent rebound in precious metal prices is also bringing more hope for deals in this space. In the wake of the debt crisis and with currencies which are still weak, gold has been one of the most bullishly rising commodities. The market believes that the hunt for immediate production capacity could drive more miners to seek assets that are already in production or about to go into production. Crew Gold Corporation, the Canada-listed, Africa-focused gold miner, attracted interest from Endeavour Financials, an investment house, and severstal, the russian metals and mining company. Both of them increased their stake in the listed entity. similarly, the West Africa-focused Cluff Gold, with its UK listing, is reported to have attracted the attention of a predator keen on its producing assets and strong exploration portfolio. However, it is understood the deal failed over pricing issues.

The spin off of Canadian miner Barrick Gold’s African operations and its listing in london was also one of the key deals of the first half of the year. Barrick sold a 25.00% stake in the business through the exchange, although, according to market rumours, this move was a matter of internal restructuring and separation

of the African management. still, the listing was the biggest one of this half of the year in london.

“It is a stand-out transaction and it demonstrates investor appetite for African assets on the london market. Given continued tightness in the credit markets, I think we could see more spin-offs from the big mining companies,” lee Downham, Partner, and the Head of Mining & Metals at Ernst &Young, said.

some of the companies that have already hinted about spinning off further assets include Anglo American, vedanta resources, severstal and Gleencore.

On the power generation, transmission and distribution side, mid-market deals were dominant. A lot of the transactions were balance sheet exercises and the offloading of the non-core assets. A clear interest by both sector players and financial investors in wind energy can also be noted over the past six months.

One of the biggest deals in this space (excluding service companies) include the €810m acquisition of vattenfall Europe’s German transmission business by Belgium’s Elia and Industry Funds Management Pty ltd (IFM), the Australia-based superannuation fund.

The top positions for legal advisers in this sector went to vinson & Elkins by value (€11.80bn from six deals) and linklaters retained their number one position by volume (€7.90bn from 10 deals). Goldman sachs took top spot in both metrics for financial advisers, advising on nine deals worth €11.38bn.

by oliver Adelman and paulina Lichwa

DEAl DrIvErs – EUrOPE –ENERGy, MINING & uTILITIES

energY, mining & utiLities

ENErGY,MINING&UTIlITIES

“ The recent rebound in precious metal prices is also bringing more hope for deals in this space.”

22

energY, mining & utiLitiesTOP15ANNOUNCEDDEAlSFOrHAlF-YEArENDING30JUNE2010–EUrOPEANENErGY,MINING&UTIlITIESSECTOr


Announced date


30-Jun-10 P KazakhGold Group limited OJsC Polyus Gold 8,367

28-Apr-10 P PPl Corporation E.ON Us llC E.ON AG 5,767

11-Mar-10 P BP Plc Devon Energy Corporation (Assets in the deepwater Gulf of Mexico, Brazil and Azerbaijan)

Devon Energy Corporation 5,116

5-Jan-10 C Mikhail Gutseriyev (Private Investor) NK russneft OAO En+ Group ltd 4,595

28-May-10 P royal Dutch shell Plc East resources Inc Kohlberg Kravis roberts & Co 3,802

22-Mar-10 P royal Dutch shell Plc; and PetroChina Company limited

Arrow Energy limited 2,472

21-Jun-10 P Acergy Ms limited subsea 7 Inc 2,008

28-Jun-10 P Noble Corp FDr Holdings limited riverstone Holdings llC; and The Carlyle Group llC

1,759

21-Jun-10 P BW Offshore As Prosafe Production Public limited (76.12% stake)

1,241

18-Mar-10 C Enel Green Power spA Endesa Cogeneracion y renovables sl (60.00% stake)

Endesa sA 1,141

25-May-10 P UIl Holdings Corporation Connecticut Natural Gas Corporation; The Berkshire Gas Company; and The southern Connecticut Gas Company

Iberdrola sA 1,050

10-May-10 P Hindustan Zinc limited Anglo American Zinc Anglo American Plc 1,046

12-Feb-10 C Technischen Werke Dresden GmbH GEsO Beteiligungs und Beratungs AG EnBW Energie Baden-Wuerttemberg AG 900

12-Mar-10 P Elia system Operator Nv; and Industry Funds Management Pty ltd

50Hertz Transmission GmbH vattenfall Europe AG 810

24-Mar-10 P schlumberger limited Geoservices sA Astorg Partners sAs 804


23

energY, mining & utiLitiesMIX OF DEAls BY GEOGrAPHIC rEGION

QUArTErlY TrENDs

VALuE

VALuE

VoLuME

VoLuME


17.3%

8.7%

8.7%

42.0%

6.9%

2.6%1.1%

5.5%

7.3%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

17.3%

8.7%

8.7%

42.0%

6.9%

2.6%1.1%

5.5%

7.3%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

20.6%

14.2%

8.4%

14.8%

14.8%

5.2%

5.2%

3.9%

12.9%

UK & Ireland

Germany

France

Italy

Iberia

Benelux

Nordic


Other


0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

Quarter ended

0

20

40

60

80

100

120

140

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

Quarter ended



24

energY, mining & utiLitiesFINANCIAlADvISErS

lEGAlADvISErS



H1 2009

H1 2010


No. of deals


24 2 HsBC Bank 9,919 3

40 3 BMO Capital Markets 9,168 2




- 7 Blackstone Group Holdings 5,767 1


37 9 scotia Capital 5,444 2



32 12 Jefferies & Company 4,357 2



18 15 Deloitte 2,849 6

- 16 simmons & Company International 2,525 3

51 17 standard Chartered 2,123 2

45 18 DnB NOr Markets 2,008 1

- 19 Carnegie Investment Bank 2,007 2

23 20= Barclays Capital 1,759 1

- 20= FBr Capital Market 1,759 1

- 20= sunTrust robinson Humphrey Capital Markets

1,759 1

H1 2009

H1 2010


No. of deals

33 1 vinson & Elkins 11,795 6

47 2 skadden Arps slate Meagher & Flom 10.840 4


75 4 Debevoise & Plimpton 9,171 2

- 5 Mourant Ozannes 8,367 1





- 10 K&l Gates 5,988 2

- 11 Baker Botts 5,894 3

- 12= Barbosa, Mussnich & Aragao 5,116 1

93 12= Fraser Milner Casgrain 5,116 1

- 14 Egorov, Puginsky, Afanasiev & Partners 4,595 1


87 16 Wiersholm 3,066 9

- 17 Webber Wentzel 2,948 3

61 18 White & Case 2,904 4

- 19 Bennett Jones 2,558 1

- 20 Gardere Wynne sewell 2,517 2

H1 2009

H1 2010


No. of deals







10 7 Deloitte 2,849 6

12 8 lazard 1,375 5

64 9 raiffeisen Investment 1,130 5

21 10 rBC Capital Markets 593 5


81 12 leonardo & Co. 1,278 4


80 14 Banco Espirito santo de Investimento 54 4

17 15 HsBC Bank 9,919 3



- 18 simmons & Company International 2,525 3


- 20 CIBC World Markets 1,037 3

H1 2009

H1 2010


No. of deals



22 3 Wiersholm 3,066 9

27 4 vinson & Elkins 11,795 6

16 5 CMs 1,337 6

3 6 Freshfields Bruckhaus Deringer 948 6




9 10 White & Case 2,904 4

- 11 Hogan lovells 1,247 4

6 12 Cuatrecasas, Goncalves Pereira 1,161 4


4 14 Allen & Overy 791 4

12 15 Cleary Gottlieb steen & Hamilton 506 4

11 16 Norton rose 268 4

- 17 Baker Botts 5,886 3

- 18 Webber Wentzel 2,948 3

38 19 Wikborg rein & Co 2,277 3


The financial adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010, excluding lapsed and withdrawn deals. The tables are pan-European and are based on the following sectors: Energy, Mining and Utilities- other.

The legal adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010 and include lapsed and withdrawn deals.The tables are pan-European and are based on the following sectors: Energy, Mining and Utilities- other.


25

DEAl DrIvErs – EUrOPE –CoNSuMER

Activity in the first six months of last year was driven mainly by transactions involving multinationals committed to implementing debt reduction programs through asset disposals. However, there are signs of transformational deals returning in the wake of Kraft’s acquisition of Cadbury, particularly in consumer goods, exemplified by Heineken’s acquisition of Femsa and Reckitt’s recent bid for SSL.

Meanwhile, European growth markets, particularly Eastern Europe and the CIs countries, will see an increasing level of interest, several sector bankers noted. In addition, Brazil, China and India continue to be perceived as very attractive markets for industry majors seeking growth.

When the growth story in mature core markets becomes increasingly sluggish, companies continue to expand in growth markets, as Danone demonstrated through its deal with Unimilk in russia, a Paris-based sector banker explained.

The sector could also see the return of transatlantic deal flow on the back of currency fluctuations, several bankers noted. A number of well capitalised consumer companies in the Us will be looking for opportunities in Europe, bankers said.

Also, investors from Asia and the Middle East are looking to capitalise on European deals, due to relatively low valuations, a UK-based sector banker said. Good brands and distribution networks could attract interest in the UK, which can then be used as an entry point to Europe, the banker suggested.

Meanwhile, the retail space is looking less opportune, given industry headwinds in the economic downturn, the Paris-based banker said. There are a lot of mature companies operating in the space, and growth is less driven when compared to the food and beverage space. Equally, entering emerging markets is not as clear-cut, the banker noted.

However, the UK-based consumer banker noted that online retailers remain attractive targets, driven by consumer demand. Examples include Net-a-Porter, which was acquired by richemont, the swiss luxury-goods group, for €236m (for a 60% stake) earlier this spring. This space will continue to attract investors in going forward, the banker added.

Meanwhile, the private equity domain looks set to be focusing on increased competition for mid-market transactions.

Major private equity houses, including Advent, Permira and KKr, are now more focused on deals in the middle-market, between €300m-€800m, the UK-based banker noted. We will continue seeing a higher percentage of cash in deals than in the past, with the food industry continues attracting higher valuations, he said.

loyens and loeff took top position in the legal advisers table for the sector by value, advising on €7.06bn deals; Allen & Overy are ahead by volume on 22. Credit suisse and rothschild head the financial advisers tables for value (€11.25bn) and volume (19), respectively.

by Kasper Viio and Virginia Garcia Martinez

Consumer

CONSUMEr

“ A number of well capitalised Consumer companies in the US will be looking for opportunities in Europe, bankers said.”

26

ConsumerTOP15ANNOUNCEDDEAlSFOrHAlF-YEArENDING30JUNE2010–EUrOPEANCONSUMErSECTOr


Announced date


11-Jan-10 C Heineken Nv FEMsA Cerveza sA de Cv Fomento Economico Mexicano sAB de Cv 5,300

5-Jan-10 C Nestle sA Kraft Foods (frozen pizza business) Kraft Foods Inc 2,576

15-Mar-10 C Phillips-van Heusen Corporation Tommy Hilfiger Corporation Apax Partners llP 2,200

8-May-10 C Qatar Holding llC Harrods limited 1,742

27-Jan-10 C Kohlberg Kravis roberts & Co Pets At Home limited Bridgepoint Capital limited 1,074

26-May-10 P AsDA Group limited Netto Foodstores limited Dansk supermarked A/s 919

24-Feb-10 P Philip Morris Fortune Tobacco Co Inc (subsidiary of Philip Morris International Inc)

Fortune Tobacco Corporation (selected Assets And liabilities); and Philip Morris Philippines Manufacturing Inc (selected Assets And liabilities)

Fortune Tobacco Corporation; and Philip Morris Philippines Manufacturing Inc

864

8-Jun-10 P Aryzta AG Fresh start Bakeries Inc lindsay Goldberg & Bessemer lP 752

28-Jan-10 P Total ErG ErG Petroli spA; and Total Italia sA ErG spA; and Total sA 747

15-Apr-10 P Olayan Group; and spyros Theodoropoulos (Private investor)

Chipita International sA vivartia sA 730

30-Mar-10 P Groupe lactalis sA Ebro Puleva (dairy division) Grupo Ebro Puleva sA 630

2-Mar-10 P Diageo Plc sichuan swellfun Co ltd (60.29% stake) 612

22-Mar-10 P Bottling Holdings (luxembourg) sarl Coca-Cola Drikker As; and Coca-Cola Drycker sverige AB

The Coca-Cola Company 606

22-Apr-10 C Advent International Corporation DFs Furniture Company limited 578

9-Feb-10 P spectrum Brands Inc russell Hobbs limited 489


27

ConsumerMIX OF DEAls BY GEOGrAPHIC rEGION

QUArTErlY TrENDs

VALuE

VALuE

VoLuME

VoLuME


UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

45.0%

1.5%4.1%8.3%

4.7%

17.6%

6.8%

6.8%5.1%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

45.0%

1.5%4.1%8.3%

4.7%

17.6%

6.8%

6.8%5.1%

UK & Ireland

Germany

France

Italy

Iberia

Benelux

Nordic


Other

18.1%

13.6%

10.4%

4.9%10.4%

11.7%

12.6%

16.5%

1.9%


0

20,000

40,000

60,000

80,000

100,000

120,000

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

Quarter ended

0

25

50

75

100

125

150

175

200

225

250

275

300

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

Quarter ended



28

ConsumerFINANCIAlADvISErS

lEGAlADvISErS



H1 2009

H1 2010


No. of deals


12 2 Citigroup 10,706 4


1 4 lazard 6,027 8

- 5 Allen & Company 5,906 2

- 6 Barclays Capital 3,254 4



- 9 Centerview Partners 2,576 2

- 10= Blackstone Group Holdings 2,576 1

- 10= Houlihan lokey 2,576 1



25 14= Peter J solomon Company 2,200 1

- 14= rBC Capital Markets 2,200 1




18 19 rabobank 917 7

23 20 KPMG 829 9

H1 2009

H1 2010


No. of deals

38 1 loyens & loeff 7,062 5


19 3 Allen & Overy 6,380 22



113 6 Gibson Dunn & Crutcher 5,300 1


126 8= Blake, Cassels & Graydon 3,328 2

35 8= Cravath swaine & Moore 3,328 2



- 12 Homburger 2,941 2

130 13= De Brauw Blackstone Westbroek 2,200 2

86 13= Willkie Farr & Gallagher 2,200 2



13 17 DlA Piper 1,548 10

- 18 Travers smith 1,366 4


30 20 Berwin leighton Paisner 1,137 3

H1 2009

H1 2010


No. of deals




3 4 KPMG 829 9

7 5 Deloitte 481 9

1 6 lazard 6,027 8

10 7 rabobank 917 7



- 10 Global M&A 10 6



19 13 Citigroup 10,706 4






12 19 JPMorgan 630 3


H1 2009

H1 2010


No. of deals

5 1 Allen & Overy 6,380 22

4 2 DlA Piper 1,548 10

1 3 CMs 133 8

2 4 linklaters 902 7


16 6 Clifford Chance 543 6




- 10 Baer & Karrer 925 5

140 11 Garrigues 734 5

- 12 Mannheimer swartling 714 5


3 14 White & Case 27 5


- 16 Travers smith 1,366 4


20 18 Kirkland & Ellis 902 4

32 19 sJ Berwin 894 4


The financial adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010, excluding lapsed and withdrawn deals. The tables are pan-European and are based on the following sectors: Consumer-retail, food and other.

The legal adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010 and include lapsed and withdrawn bids. The tables are pan-European and are based on the following sectors: Consumer- retail, food and other.


29

The Telecoms, Media & Technology (TMT) sector has been one of the main contributors to the resurgence of European M&A activity in the first half of 2010. The sector was responsible for over 13% of European deal flow in terms of volume and close to 11% in terms of value.

TELECoMSIn telecoms, the bulk of M&A deal flow has come from European operators’ eagerness to close in on the attractive emerging market assets that remain.

In the face of deteriorating domestic conditions and threats of growing competition in Brazil, most notably from Mexican tycoon Carlos slim, Telefonica has gradually increased pressure on Portugal Telecom to secure control of Brazil’s largest mobile operator vivo. Telefonica and Portugal Telecom jointly own Brasilcel, which in turn owns a 60.00% stake in vivo. Telefonica made a €5.70bn offer for Portugal Telecom’s stake in vivo in May before sweetening its bid to €6.50bn, and then again to €7.15bn. The Portuguese government’s use of its ‘golden share’ to block Telefonica’s offer meant that the deal had become a political affair. After months of negotiations, Telefonica finally convinced Portugal Telecom in July to sell its share of vivo for €7.50bn. The Portuguese operator could not resign itself to leaving the strategic Brazilian market so will use half of the proceeds to acquire a 22.00% stake in the Brazilian operator, Oi.

Another European incumbent operator that has heavily publicised its ambition to seek acquisitive growth in emerging markets is France Telecom. recently appointed CEO stephane richard said that the company is aiming to double revenue from emerging countries in Africa and the Middle East to roughly €7.00bn in the next five years and increase its customers to 300m from 200m. Potential targets for France Telecom include the African assets of luxembourg-based telecom company Millicom who operate in Chad, The Democratic republic of Congo, Ghana, Mauritius, rwanda, senegal, and Tanzania. The French company could also look at companies such as Globacom, a privately held Nigeria-based telecom company or Orascom Telecom’s Algerian unit Djezzy.

Meanwhile, private equity firms are closely following the progress of Polkomtel’s auction. The Polish mobile operator is attracting interest from a number of strategic players, but it is more likely to end up in the hands of a consortium of private equity firms, which could include Blackstone, TPG, and Apax Partners.

In russia, the long-awaited merger of russian mobile operator MTs and its fixed-line unit Comstar paves the way for development of the company both at home and abroad.

TECHNoLoGyA resurgence of deal activity since the beginning of 2010 is shaking the lethargic technology marketplace. Despite the gloomy economic outlook, IT companies with a solid client base and a proven technology portfolio have shown their determination to be active consolidators.

large European technology companies will keep their eyes on what their Us counterparts are doing when reviewing their M&A strategy. After last years game-changing acquisition of sun Microsystems by California-based software company Oracle, European dealmakers have turned their attention to sAP. The German software company responded by the acquisition of California-based database management software systems maker sybase for €4.04bn.

Cross-border activity between Europe and the Us also saw the likes of Google and Oracle directing their M&A radar towards Europe. Tuck-in acquisitions of small-cap players – as recently shown by the takeover of secerno by Oracle and Global IP solutions by Google – could be followed by more cash intensive deals. Us giants Qualcomm and Texas Instruments are also regarded as likely buyers in Europe where they could bid for Infineon’s mobile unit, which is currently for sale.

With regards to M&A activity within Europe, Eastern Europe, and more particularly Poland, is set to be among the strategic regions for consolidation. While the likes of Asseco and Comarch will continue scouting for targets, others like ABC Data have just hit the public market with a strong intention to boost growth outside of Poland and later merge with larger rivals. Us-listed Tech Data previously targeted ABC Data and could renew takeover manoeuvres later this year.

The Polish software market has also wet the appetite of a number of international players. Initially UK-listed sage launched a public offer for taking over listed Teta in Poland, a provider of Er P (Enterprise resource Planning) and Hr products to midmarket customers in Poland and Hungary. sage offered €3.21 per Teta share. However, its offer was gazumped by Dutch-based Unit4, which was able to clinch the deal with a retouched offer of €3.44 per share for the offer period from 30 June to 5 July 2010, and €3.14 per share for the period starting from 6 July 2010.

Meanwhile, private equity funds are showing a renewed interest in technology deals with a string of large investments. The €629m acquisition of UK-based sophos by Apax Partners is, so far, the largest private equity tech deal in 2010; followed by ICG-backed MBO of CPA Global (€508m) and Advent’s acquisition of Xafinity Group for €317m. Most recently HgCapital, the UK-based private equity firm, supported the management team of Italian Teamsystem in a secondary buyout. Bain Capital, the company’s PE backers, sold the business for an enterprise value of €565m. It had acquired the company for €199.7m in 2004.

MEDIABroadcasting is expected to keep the media M&A pipeline ticking in the second half of 2010 – while deals over €150m in the media sector in Europe were a rarity, June kicked off with a couple of deals which are set to get advisers busy over the coming months. News Corporation is going after BskyB for full control; while rTl’s Five channel in the UK is currently for sale with a reported £150m-£200m price tag. News Corp’s €11.00bn indicative offer to acquire the outstanding shares in Bskyb, the UK-listed company, could encounter a lengthy competition dispute if it goes ahead, which could trail into 2011. The media giant has a war chest of over €5.00bn following several divestitures and is expected to remain active on the M&A front, both as buyer and as a seller.

starting from late 2009, the period has also been dominated by strong activity in the cable sector in Germany and Eastern Europe, with the sale of Unitymedia to liberty Global for €3.50bn. Kabel Deutschland’s IPO is following a dual track process and spearheads a fragmented sector in need of consolidation. The future of Poland’s Aster City is yet to be decided and Mid Europa Partners are expected to appoint advisers shortly to sell the cable group.

linklaters were top of the tables of legal advisers by value, advising on eight deals worth €2.08bn; DlA Piper pipped them to top spot in terms of volume, working on 18. In the financial advising realm, Morgan stanley streaked ahead on both value and volume fronts with €9.92bn in a total of 18 deals.

by pamela Barbaglia, Beranger Guille, and Mariana Valle

DEAl DrIvErs – EUrOPE –TMT

TMT30

teLeComs, mediA & teCHnoLogY

TOP15ANNOUNCEDDEAlSFOrHAlF-YEArENDING30JUNE2010–EUrOPEANTElECOMS,MEDIA&TECHNOlOGYSECTOr

Announced date


13-May-10 P OAO rostelecom CenterTelecom OJsC svyazinvest Telecommunication Investment Joint stock Company

1,842

12-May-10 P OAO rostelecom Uralsvyazinform JsC svyazinvest Telecommunication Investment Joint stock Company

1,562

29-Jan-10 C The Carphone Warehouse Group Plc (shareholders)

Talk Talk Telecom Group plc The Carphone Warehouse Group Plc 1,355

23-Apr-10 P OAO rostelecom sibirtelecom OJsC svyazinvest Telecommunication Investment Joint stock Company

1,308

12-May-10 P OAO rostelecom North-West Telecom svyazinvest Telecommunication Investment Joint stock Company

1,159

15-Apr-10 P Gestevision Telecinco sA Canalsatelite Digital sl (22.00% stake); and Cuatro

sogecable sA 991

9-Feb-10 C Micron Technology Inc Numonyx Bv Francisco Partners lP; Intel Corporation; and sTMicroelectronics Nv

920

12-May-10 P OAO rostelecom OJsC volgaTelecom svyazinvest Telecommunication Investment Joint stock Company

899

25-Jun-10 P Mobile Telesystems OJsC OAO Comstar United Telesystems (38.03% stake)

832

5-May-10 P ABB ltd ventyx Inc vista Equity Partners llC 780

21-May-10 P OAO rostelecom svyazinvest Telecommunication Investment Joint stock Company (25.00% stake)

OAO Comstar United Telesystems 690

3-May-10 P Apax Partners llP sophos Plc TA Associates Inc 629

2-Jun-10 C MegaFon synterra CJsC PromsvyazCapital 609

13-May-10 P OAO rostelecom Far East Telecom limited svyazinvest Telecommunication Investment Joint stock Company

455

22-Feb-10 C Groupe Canal+ sA Canal+ France sA (5.10% stake) Groupe M6 384



31

teLeComs, mediA & teCHnoLogY

QUArTErlY TrENDs

VALuE

VALuE

VoLuME

VoLuME


20.7%

8.1%

5.7%

0.2%

6.3%

0.6%3.9%

54.0%

0.6%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

20.7%

8.1%

5.7%

0.2%

6.3%

0.6%3.9%

54.0%

0.6%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

29.2%

15.0%

10.0%2.3%

2.3%

7.7%

15.8%

16.5%

1.2%

UK & Ireland

Germany

France

Italy

Iberia

Benelux

Nordic


Other


0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

Quarter ended

0

25

50

75

100

125

150

175

200

225

250

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

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Q105

Q404

Q304

Q204

Q104

Volu

me

Quarter ended



32

teLeComs, mediA & teCHnoLogYMIX OF DEAls BY GEOGrAPHIC rEGION

lEGAlADvISErS



H1 2009

H1 2010


No. of deals







10 7 HsBC Bank 1,464 2


- 9 Banco Bilbao vizcaya Argentaria 991 1

7 10 Deutsche Bank 925 7

- 11 Patria-Banco de Negocios 734 1

14 12 ING 690 1

- 13 renaissance Capital 609 1


55 15 Houlihan lokey 472 3

- 16 Intel Capital 415 1

- 17 Macquarie Group 371 2

- 18 Kinmont 371 1

- 19= Cowen and Company 313 1

90 19= rBC Capital Markets 313 1

H1 2009

H1 2010


No. of deals


8 2 KPMG 222 10


6 4 Deloitte 157 8


13 6 Deutsche Bank 925 7





2 11 lazard 161 4



58 14 Houlihan lokey 472 3

1 15 rothschild 272 3

57 16 Investec 116 3

71 17 KBC securities 83 3


- 19 Brewin Dolphin Holdings 31 3

- 20 Canaccord Genuity 25 3

H1 2009

H1 2010


No. of deals




18 4 Osborne Clarke 1,361 2


140 6 White & Case 1,299 6

3 7 Allen & Overy 1,292 7

16 8 DlA Piper 1,235 18



99 11 Wilson sonsini Goodrich & rosati 1,029 6

- 12 Uria Menendez 1,004 3

7 13 skadden Arps slate Meagher & Flom 994 3

29 14 Weil Gotshal & Manges 992 3

77 15 Cuatrecasas, Goncalves Pereira 991 2

11 16 Fenwick & West 952 5

1 17 Jones Day 949 6

- 18 Pavia e Ansaldo 920 1


- 20 Field Fisher Waterhouse 848 3

H1 2009

H1 2010


No. of deals

2 1 DlA Piper 1,235 18


13 3 Olswang 232 8



113 6 loyens & loeff 1,325 6

37 7 White & Case 1,299 6

59 8 Wilson sonsini Goodrich & rosati 1,029 6

3 9 Jones Day 949 6

28 10 CMs 641 6


111 12 Travers smith 227 6

31 13 K&l Gates 162 6



42 16 Fenwick & West 952 5

27 17 sJ Berwin 262 5

25 18 Bredin Prat 135 5


- 20 Blake, Cassels & Graydon 359 4

The financial adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010, excluding lapsed and withdrawn deals.The tables are pan-European and are based on the following sectors: Computer- software, hardware and semiconductors; Telecoms- Hardware and Carriers; Internet/e-Commerce and Media.

The legal adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010 and include lapsed and withdrawn deals.The tables are pan-European and are based on the following sectors: Computer- software, hardware and semiconductors; Telecoms- Hardware and Carriers; Internet/e-Commerce and Media.


33

teLeComs, mediA & teCHnoLogYFINANCIAlADvISErS

DEAl DrIvErs – EUrOPE – TRANSpoRTATIoN

over the first half of 2010, there were a total of 65 transactions collectively valued at €10.10bn that came to market in the Transportation sector. Compared to year-earlier levels, deal volume was up marginally (by 3.20%), while aggregate valuations were up over fivefold on the back of a number of large-cap transactions.

Among sub-sectors, the aviation industry witnessed some of the most noteworthy deal activity over the first half of 2010 with M&A offering a primary survival route for airlines that have suffered years of high fuel costs, overcapacity and lagging demand. Indeed, British Airways (BA) and Iberia announced a €3.60bn merger in April and further activity is likely going forward.

International Airlines Group (IAGC), the holding company to be formed by the merged BA and Iberia groups, was granted approval recently from European and Us regulators and the transaction is expected to complete by the close of 2010. regulators also gave clearance to BA and Iberia’s move to form a joint venture with American Airlines on transatlantic routes, an agreement that will see the three companies better compete against rivals lufthansa and Air France who have already teamed up with Us carriers in similar alliances.

Casting a look to future deal activity in the niche, BA has signalled that upon completion of the IAGC merger, the new group will go on the acquisition trail, possibly targeting low-cost carriers. According to mergermarket intelligence, other potential targets in Europe include TAP, the Portuguese carrier, and lOT, the Polish airline, as well as Finland-based carrier Finnair. such acquisitive activity by a newly formed big carrier could kick off a scramble for assets as rival airlines seek to maintain market share.

The grab for market share is also hastening deal activity in the public transportation space across Europe as liberalisation pushes operators to seek partnerships to gain scale and the competitive edge over rivals. The largest such deal came to market in April with the German state rail firm Deutsche Bahn (DB) agreeing to acquire its UK-listed peer Arriva, the passenger bus and rail service provider with operations throughout Europe, for €2.80bn.

France’s state-controlled sNCF was a keen bidder for Arriva earlier in the year, although discussions failed to progress and ultimately DB’s offer of £7.75 per share was enough to tip Arriva firmly into the German buyer’s hands. Nonetheless, sNCF is in the running for Arriva’s German bus and rail assets which DB has offered to divest to address EC antitrust concerns. Other prospective buyers include France’s veolia Transport, Denmark’s DsB, the Netherland’s Abellio and Austria’s railway operator OBB.

Meanwhile, veolia Transport is in the midst of finalising its €1.80bn merger with French counterpart Transdev, which has been in the pipeline since late 2009. The combined entity, which plans a post-merger public listing sometime in 2011, foresees antitrust hurdles with respect to its Dutch operations and may require divestitures. such a theme of big tie-ups, anti-competition concerns and portfolio reshuffles will no doubt continue to drive deal flow in this space over the short term.

JPMorgan topped the value league tables for the Transportation sector, with a total of €6.70bn from three deals, while lazard came in at number one by volume, working on four deals worth a total of €5.00bn. Meanwhile for legal advisers, Clifford Chance had the highest value at €4.78bn, while linklaters took the top spot for volume, working on six transactions in total.

by Matthew Albert

trAnsPortAtion

TrANSPOrTATION

“ Casting a look to future deal activity in the niche, BA has signalled that upon completion of the IAGC merger, the new group will go on the acquisition trail, possibly targeting low-cost carriers.”

34

trAnsPortAtionTOP15ANNOUNCEDDEAlSFOrHAlF-YEArENDING30JUNE2010–EUrOPEANTrANSPOrTATIONSECTOr


Announced date


8-Apr-10 P British Airways Plc Iberia lineas Aereas de Espana sA 3,598

22-Apr-10 P Deutsche Bahn AG Arriva Plc 2,819

5-May-10 P veolia Transport sA Transdev sA 1,785

17-Jun-10 P Eiffarie sAs societe des Autoroutes Paris-rhin-rhone sA (13.73% stake)

854

22-Jun-10 P Andrade Gutierrez Concessoes sA; Camargo Correa Investimentos em Infra Estrutura sA; and soares Penido Concessoes sA

Companhia de Concessoes rodoviarias (6.00% stake)

Brisa-Auto Estradas de Portugal sA 468

5-May-10 P rATP Transdev sA (selected French and International Assets); and veolia Transport sA (selected French and International Assets)

Transdev sA; and veolia Transport sA 358

29-Apr-10 C COsCO Pacific limited sigma Enterprises limited (13.71% stake) AP Moeller - Maersk A/s 324

22-Feb-10 P Aegean Airlines sA Olympic Airlines sA Marfin Investment Group Holdings sA 210

18-Jun-10 P California Public Employees retirement system

Gatwick Airport ltd (12.70% stake) Global Infrastructure Partners 127

28-May-10 P Ecorodovias Infraestrutura logistica sA Armazens Gerais Columbia sA; and EADI sul sA Cargo ltd

119

15-Jun-10 P Navieras Ultragas ltda Eitzen Bulk shipping A/s Camillo Eitzen & Co AsA 89

29-Jan-10 C Avanza Agrupacion para el Transporte sl Autobuses Urbanos del sur sA; and Transporte de Cercanias

Trap sA 70

13-May-10 P EIsEr Global Infrastructure Fund sacyr Concesiones (certain motorway and transport hub concessions in spain)

sacyr vallehermoso sA 47

1-Jun-10 C Europorte sAs GB railfreight ltd FirstGroup Plc 37

16-Apr-10 P Mid Industry Capital spA Mar-ter spedizioni spA Wise venture sGr spA 27


35

trAnsPortAtionMIX OF DEAls BY GEOGrAPHIC rEGION

QUArTErlY TrENDs

VALuE VoLuME


29.7%

0.1%

30.0%0.3%

36.5%

1.0%0.4% 2.1%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

29.7%

0.1%

30.0%0.3%

36.5%

1.0%0.4% 2.1%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

13.8%

12.3%

24.6%

3.1%

12.3%

4.6%

13.8%

10.8%

4.6%

UK & Ireland

Germany

France

Italy

Iberia

Benelux

Nordic


Other


VALuE VoLuME

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

Quarter ended

0

10

20

30

40

50

60

70

80

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q 08

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

Quarter ended



36

trAnsPortAtionFINANCIAlADvISErS

lEGAlADvISErS



H1 2009

H1 2010


No. of deals

- 1 JPMorgan 6,741 3


- 3 Morgan stanley 5,707 3

1 4 lazard 5,009 4

- 5 Bank of America Merrill lynch 3,598 1

- 6 Deutsche Bank 3,143 2

- 7 BNP Paribas 2,997 4

- 8 sG 2,997 3


- 10 Credit suisse 2,612 2

- 11 Messier Partners 358 1

- 12 ABG sundal Collier 79 2

- 13 GBs Finanzas 70 2

- 14 Carnegie Investment Bank 66 2


13 16 KPMG 37 1


- 18 K Finance 27 1

- 19 rs Platou Markets 13 1

- 20 Global M&A 7 2

H1 2009

H1 2010


No. of deals

2 1 lazard 5,009 4

- 2 BNP Paribas 2,997 4

- 3 JPMorgan 6,741 3

- 4 Morgan stanley 5,707 3

- 5 sG 2,997 4




- 9 Deutsche Bank 3,143 2



- 12 ABG sundal Collier 79 2

- 13 GBs Finanzas 70 2

- 14 Carnegie Investment Bank 66 2

- 15 Global M&A 7 2

- 16 Bank of America Merrill lynch 3,598 1

- 17 Messier Partners 358 1

14 18 KPMG 37 1

- 19 K Finance 27 1

- 20 rs Platou Markets 13 1

H1 2009

H1 2010


No. of deals


- 2 slaughter and May 3,762 3

28 3 Allen & Overy 3,598 2

32 4= Garrigues 3,598 1

- 4= Norton rose 3,598 1

- 4= sullivan & Cromwell 3,598 1

61 4= Uria Menendez 3,598 1


- 9 Herbert smith/Gleiss lutz/stibbe 2,819 1

46 10 Darrois villey Maillot Brochier 2,143 3




- 14 simmons & simmons 881 2

- 15 Bredin Prat 854 2

41 16 vinge 854 1

22 17= Pinheiro Neto Advogados 468 1

- 17= vieira de Almeida & Associados 468 1

- 19 August & Debouzy 358 1

- 20= Arap Nishi & Uyeda Advogados 156 1

- 20= Machado Associados 156 1

- 20= Machado Meyer sendacz e Opice 156 1

H1 2009

H1 2010


No. of deals



- 3 slaughter and May 3,762 3


46 5 Darrois villey Maillot Brochier 2,143 3




- 9 simmons & simmons 881 2

- 10 Bredin Prat 854 2

- 11 Wikborg rein & Co 79 2

- 12= Denton Wilde sapte - 2

- 12= Eversheds - 2

39 14= Garrigues 3,598 1

- 14= Norton rose 3,598 1

- 14= sullivan & Cromwell 3,598 1

61 14= Uria Menendez 3,598 1

- 18 Herbert smith/Gleiss lutz/stibbe 2,819 1

14 19 vinge 854 1

31 20= Pinheiro Neto Advogados 468 1

- 20= vieira de Almeida & Associados 468 1

The financial adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010, excluding lapsed and withdrawn deals. The tables are pan-European and cover the Transportation sector.

The legal adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010 and include lapsed and withdrawn deals. The tables are pan-European and cover the Transport sector.


37

Emerging markets are expected to continue to take centre stage in the next quarter in the M&A healthcare landscape. Consolidation continues to be highlighted in the services, generics and over-the-counter sectors of the industry consequently leading to a string of M&A activity that spans across the wider Healthcare spectrum

As drug development companies seek partnerships and joint ventures with companies delivering high quality services for clinical development and post-marketing processes, inevitably service companies will need to consolidate and merge in order to provide a wide-range of expertise to actual and potential pharma clients.

Emerging markets have topped the list of big pharma for some time, as bigger players seek to diversify their portfolio by acquiring businesses that will make the drug development process more efficient. These players can also use the deals to leverage product portfolios that include more than standard drug development pipelines. Among these is Abbott’s acquisition of Indian Piramal’s Healthcare solutions business, for a total cash consideration of €2.96bn (Us$3.72bn) in May this year. Through this, Abbott will gain access to manufacturing facilities in India and rights to approximately 350 brands and trademarks of pharmaceutical products.

likewise, GlaxosmithKline’s acquisition in June of Argentinian laboratorios Phoenix for a cash consideration of approximately €209m gives GsK access to a rich pipeline of branded generics and a strong foothold in latin America.

similarly, French major sanofi-Aventis has been known to want to consolidate its position in emerging markets. It has yet again delivered on its strategy to grow in the Consumer Healthcare market through its May acquisition of Polish pharmaceuticals and dermocosmetics manufacturer Nepentes for €105m.

Meanwhile, consolidation among clinical research organisations (CrOs) and clinical manufacturing operations (CMOs) also looks set to continue, even if Charles river laboratories was unsuccessful in its attempts to take control of China-based global CrO WuXi PharmaTech.

Pfizer is also said to be avidly on the look-out for generic players in India and Asia, having lost out to Israeli giant Teva on a bid for German generics player ratiopharm earlier this year. However, it is those generic companies that have global reach and are prepping up manufacturing plants for biosimilars – namely generic versions of biologics, who are going to be the hot targets in the future. German sTADA could be among these once it exercises its 2011 option to acquire the outstanding 85.00% stake it does not own in German Bioceuticals Arzneimittel.

The acquisition of Us-based Talecris Biotherapeutics by spanish Grifols, a leading producer of plasma protein therapies, in a deal worth €3.13bn squeezed itself in at the beginning of June as one of the biggest deals in Q2. The deal demonstrates that companies are now looking to integrate vertically and bring together complementary geographic footprints and products, as well as increase manufacturing scale.

Diagnostic companies and specialist technologies that assist with the growth towards personalised medicine will continue to be in the eye of venture capital funds to create a plethora of IPOs when exit timelines come up in a few years’ time. Partnerships of such businesses with major players secure relatively robust growth for companies that combine biomarkers and diagnostics offerings, as these segments become essential to policies surrounding increased awareness on cost cutting and healthcare economics.

looking to the league tables, skadden Arps slate Meagher & Flom (€28.34bn) and Weil Gotshal & Manges (nine deals) forged their ways to the top of the legal advisers tables by value and volume, respectively. Goldman sachs took prime position in both classes, working on seven deals valued cumulatively at €29.77bn.

by Mintoi Chessa-Florea

DEAl DrIvErs – EUrOPE –pHARMA, MEDICAL & BIoTECH

PHArmA, mediCAL & bioteCH

PHArMA,MEDICAl&BIOTECH

“ Aventis has been known to want to consolidate its position in emerging markets.”

38

PHArmA, mediCAL & bioteCHTOP15ANNOUNCEDDEAlSFOrHAlF-YEArENDING30JUNE2010–EUrOPEANPHArMA,MEDICAl&BIOTECHSECTOr


Announced date


4-Jan-10 P Novartis AG Alcon Inc (52.00% stake) Nestle sA 18,247

9-Mar-10 P sanofi-Aventis sA/Merck & Co Inc Jv Intervet/schering-Plough Animal Health; and Merial limited

Merck & Co Inc; and sanofi-Aventis sA 6,065

28-Feb-10 C Merck KGaA Millipore Corporation 4,960

18-Mar-10 P Teva Pharmaceutical Industries ltd ratiopharm GmbH 4,200

7-Jun-10 P Grifols sA Talecris Biotherapeutics Inc Cerberus Capital Management lP 3,129

1-Jun-10 C Covidien Plc Ev3 Inc 2,006

23-Feb-10 C Triton Partners Ambea AB 3i Group Plc; and Government of singapore Investment Corporation Pte ltd

1,133

15-Mar-10 P Cinven limited sebia sA Montagu Private Equity llP 800

9-Jun-10 P PAI Partners Cerba European lab (Majority stake) IK Investment Partners limited 500

3-Mar-10 C Bridgepoint Capital limited Care UK Plc 488

30-Jun-10 P sanofi-Aventis sA TargeGen Inc TargeGen Inc consortium 459

1-Feb-10 C Cephalon Inc Mepha AG Mepha Holding AG 442

2-Jun-10 P Nordic Capital Handicare As Herkules Capital As 377

25-Jan-10 C Medtronic Inc Invatec srl 353

5-Feb-10 C Bridgepoint Capital limited lGC limited lGv Capital ltd 294


39

PHArmA, mediCAL & bioteCHMIX OF DEAls BY GEOGrAPHIC rEGION



QUArTErlY TrENDs

VALuE VoLuME5.9%

78.1%

6.3%

1.4%0.1%

0.9%6.4%

0.9%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

5.9%

78.1%

6.3%

1.4%0.1%

0.9%6.4%

0.9%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

31.2%

15.9%

16.7%

5.1%

2.2%

6.5%

14.5%

7.2%0.7%

UK & Ireland

Germany

France

Italy

Iberia

Benelux

Nordic


Other

VALuE

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

Quarter ended

0

10

20

30

40

50

60

70

80

90

100

110

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

Quarter ended

VoLuME



40

PHArmA, mediCAL & bioteCHFINANCIAlADvISErS

lEGAlADvISErS



H1 2009

H1 2010


No. of deals



- 3 Citigroup 21,588 3

2 4 Greenhill & Co 18,247 2


- 6 Evercore Partners 6,065 1

- 7= Guggenheim securities 4,960 1

- 7= Perella Weinberg Partners 4,960 1

- 9 Commerzbank 4,250 3

- 10 royal Bank of scotland Group 4,220 2



8 13 William Blair & Company 3,152 2

- 14= Banco Bilbao vizcaya Argentaria 3,129 1

- 14= Natixis 3,129 1

10 16 Piper Jaffray & Co 2,526 5

5 17 JPMorgan 2,395 5



- 20= Carnegie Investment Bank 1,133 1

- 20= Danske Markets Corporate Finance 1,133 1

H1 2009

H1 2010


No. of deals



10 3 Piper Jaffray & Co 2,526 5



2 6 KPMG 647 5


44 8 Deloitte 168 5


- 10 Hawkpoint - 4


- 12 Citigroup 21,588 3

- 13 Commerzbank 4,250 3


5 15 lazard 384 3


14 17 Greenhill & Co 18,247 2

- 18 royal Bank of scotland Group 4,220 2


9 20 William Blair & Company 3,152 2

H1 2009

H1 2010


No. of deals






74 6 Allen & Overy 18,765 8

8 7 Homburger 18,247 2

112 8 Fried Frank Harris shriver & Jacobson 11,025 3

- 9 Weil Gotshal & Manges 7,960 9


32 11 ropes & Gray 7,145 4

10 12 Willkie Farr & Gallagher 6,706 5


19 14 Kirkland & Ellis 4,443 2

- 15= GOErG rechtsanwaelte 4,200 1

- 15= Noerr 4,200 1

- 15= stikeman Elliott 4,200 1



- 20 Proskauer rose 3,129 2

H1 2009

H1 2010


No. of deals

- 1 Weil Gotshal & Manges 7,960 9


8 3 Allen & Overy 18,765 8



12 6 Willkie Farr & Gallagher 6,706 5

1 7 Clifford Chance 905 5

6 8 Jones Day 738 5

17 9 CMs 118 5

26 10 DlA Piper 55 5

60 11 ropes & Gray 7,145 4

- 12 Hannes snellman 1,218 4


36 14 Matheson Ormsby Prentice 96 4

103 15 Pinsent Masons 11 4

59 16 roschier 4 4


112 18 Fried Frank Harris shriver & Jacobson 11,025 3


63 20 sJ Berwin 500 3

The financial adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010, excluding lapsed and withdrawn deals. The tables are pan-European and are based on the following sectors: Biotechnology; Medical; and Pharmaceuticals.

The legal adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010 and include lapsed and withdrawn deals.The tables are pan-European and are based on the following sectors: Biotechnology; Medical; and Pharmaceuticals.


41

M&A activity in the Construction sector remained fairly subdued in the first half of 2010, but there is growing evidence that the pace may quicken in the second half of the year.

While the wider economic picture in Europe has been dominated by the Greek debt situation and concerns over the Euro, there have been tentative signs that credit markets are starting to thaw and that banks are now more willing to finance the right deal.

Private equity, too, now looks poised to start investing again as low valuations and the more predictable income streams (and returns) offered by the sector begin to look more attractive to investors. Earlier this year, Us private equity group Carlyle made an unsuccessful £476m (€566m) bid for shanks Group, while Cinven recently tabled a €219m takeover offer for spice, a UK-listed utility services firm.

In the UK, cuts in infrastructure spending by the newly-elected Conservative-liberal Democrat government are also likely to drive the consolidation process as firms look for scale and seek to diversify their earnings streams away from the country. Those firms with large exposure to overseas contracts and earnings are seen as especially attractive.

Cash-rich American and European players are also keen to diversify, and are currently looking for ‘cheap’ acquisition opportunities that will expand their international operations with little downside risk. The more favourable exchange rate – especially on the Us Dollar/sterling rate – is also making UK companies more attractive to overseas buyers.

Overseas buyers are also being lured to Construction assets elsewhere in Europe. In February, Camargo Correa and votorantim Cimentos, two of Brazil’s largest cement makers, battled it out for control of Portugal’s

Cimpor Cimentos undertaking a series of minority stake acquisitions in the lisbon-based company worth a collective €2.24bn. Brazilian steelmaker CsN has also been a keen bidder for the asset, having unsuccessfully launched a hostile takeover bid for Cimpor in late 2009.

Another bidding war saw Urs and CH2M Hill, two Us construction companies, vie for UK-listed consultancy scott Wilson, nicely illustrating the premium put on these assets as counter-bids by each party saw Urs pay 290 pence a share to win the day – a massive 143.0% premium on the pre-bid share price which valued scott Wilson at €274m. This is thought to be one of the highest takeover premiums paid for a UK company over the past ten years.

While CH2M Hill was forced to walk away from this deal, analysts believe it still remains a potential buyer of UK assets. Other Us names linked to the sector include Aecom and Jacobs, while European firms Poyry, the Finnish-based company, and Dutch groups Arcardis and Grontmij are both highly acquisitive in this space.

Costain, the UK construction and civil engineering group, has also been mentioned as a possible buyer of assets. It has over £100m (€119m) in cash and analysts believe it may look for deals to move it towards a more vertically integrated model, a trend started by Balfour Beatty last year when it bought Us infrastructure services group Parsons Brinckerhoff for €323m.

The €671m bid for Bss Group from Travis Perkins, the building materials group, also got the market talking on hopes of a counter-bid. French group st. Gobain has been suggested as a possible buyer, but with some significant debt maturities coming up for renewal, (€1.40bn due in both 2010 and 2011), bankers say it is unlikely the group will mount a rival offer.

Given the uneasy economic backdrop in Europe, acquisition activity on the continent has been largely limited to sales of non-core assets as companies look to improve their finances. French group lafarge is looking to sell another €300-€500m of assets this year, while Wolseley could look to sell-off its underperforming UK-based Build Center and French building supplies unit Brossette as part of a financial review.

vieira de Almeida & Associados topped the legal adviser tables with three deals worth €1.36bn by value. They were beaten in to second place in terms of volume by linklaters who advised on six deals during the period. Credit suisse took the winning position for value and volume in the financial adviser tables, with a total of €1.39bn from four transactions.

by Malcolm Locke

DEAl DrIvErs – EUrOPE –CoNSTRuCTIoN

ConstruCtion

CONSTrUCTION

“ Private equity, too, now looks poised to start investing again as low valuations and the more predictable income streams offered by the sector begin to look more attractive to investors.”

42

ConstruCtionTOP15ANNOUNCEDDEAlSFOrHAlF-YEArENDING30JUNE2010–EUrOPEANCONSTrUCTIONSECTOr


Announced date


10-Feb-10 C Camargo Correa sA Cimpor Cimentos de Portugal sGPs sA (22.17% stake)

Teixeira Duarte - Engenharia E Construcoes sA 968

3-Feb-10 C votorantim Cimentos sA Cimpor Cimentos de Portugal sGPs sA (17.28% stake)

lafarge sA 727


Bipadosa sA 282

28-Jun-10 P Urs Corporation scott Wilson Group Plc 273

29-Jun-10 l CH2M HIll scott Wilson Group Plc 253

16-Apr-10 C lloyds TsB Development Capital ltd United House limited 171

17-Feb-10 C votorantim Cimentos sA Cimpor Cimentos de Portugal sGPs sA (3.93% stake)

Cinveste sGPs sA 155


109

4-Jan-10 C Dragados Construction UsA Inc (subsidiary of Actividades de Construccion y servicios)

John P Picone Inc (80% stake) 74

23-Jun-10 P YIT Corporation Caverion GmbH MWZ Beteiligungs GmbH; and TEMCO Holding GmbH

73

7-Jan-10 C Grupo Cosentino sl C&C North America Inc (50% stake) 70

4-May-10 C Fondations Capital Tarmac Materiaux de Construction Tarmac France 67

5-Mar-10 C Holcim Espana sA Cementval sl (49% stake) Corporacion F Turia 50

29-Jan-10 C 3i Infrastructure limited Elgin Infrastructure limited (49.90% stake) robertson Group limited 45

11-May-10 C Hochtief AG EE Cruz and Company Inc 42


43

ConstruCtionMIX OF DEAls BY GEOGrAPHIC rEGION

QUArTErlY TrENDs

VALuE VoLuME



VALuE

15.9%

3.4%

3.4%

0.9%

73.5%

2.9%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

15.9%

3.4%

3.4%

0.9%

73.5%

2.9%

UK & Ireland

Germanic

France

Italy

Iberia

Benelux

Nordic


Other

16.3%

17.4%

15.2%

3.3%10.9%

1.1%

16.3%

18.5%

1.1%

UK & Ireland

Germany

France

Italy

Iberia

Benelux

Nordic


Other

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

Quarter ended

0

10

20

30

40

50

60

70

80

90

100

110

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

Quarter ended

VoLuME



44

ConstruCtionFINANCIAlADvISErS

lEGAlADvISErS



H1 2009

H1 2010


No. of deals


18 2= Bank of America Merrill lynch 1,359 3

6 2= HsBC Bank 1,359 3

10 4= Caixa Banco de Investimento 882 2

- 4= Deutsche Bank 882 2

- 6 Morgan stanley 751 2

- 7= Brewin Dolphin Holdings 273 1

5 7= Citigroup 273 1

27 7= DC Advisory Partners 273 1

- 7= Greenhill & Co 273 1

31 11 KPMG 171 2

- 12 Catella 40 1

- 13 Catalyst Corporate Finance 38 2

- 14 UniCredit Group 30 1

- 15= BDO Corporate Finance 27 1

- 15= Global leisure Partners 27 1

- 17 Clearwater Corporate Finance 26 1


- 19 rothgordt & Cie 16 2

14 20 lazard 16 1

H1 2009

H1 2010


No. of deals


24 2= Bank of America Merrill lynch 1,359 3

18 2= HsBC Bank 1,359 3

9 4= Caixa Banco de Investimento 882 2

- 4= Deutsche Bank 882 2

- 6 Morgan stanley 751 2

14 7 KPMG 171 2

- 8 Catalyst Corporate Finance 38 2

- 9 rothgordt & Cie 16 2

41 10 PricewaterhouseCoopers - 2

- 11= Brewin Dolphin Holdings 273 1

17 11= Citigroup 273 1

13 11= DC Advisory Partners 273 1

- 11= Greenhill & Co 273 1

- 15 Catella 40 1

- 16 UniCredit Group 30 1

- 17= BDO Corporate Finance 27 1

- 17= Global leisure Partners 27 1

- 19 Clearwater Corporate Finance 26 1


H1 2009

H1 2010


No. of deals

- 1 vieira de Almeida & Associados 1,359 3

- 2 Morais leitao Galvao Teles soares Da silva & Associados

1,123 2

63 3 White & Case 882 3

- 4 Campos Ferreira, sa Carneiro e Asociados 882 2

- 5= Bredin Prat 727 1

14 5= Cleary Gottlieb steen & Hamilton 727 1

- 5= Demarest e Almeida 727 1

- 5= Pinheiro Neto Advogados 727 1

12 5= Uria Menendez 727 1

- 10 Dewey & leBoeuf 273 3

- 11 Mayer Brown 273 2

- 12= Ashurst 273 1

- 12= Cooley 273 1

48 14 CMs 263 3

- 15 DlA Piper 76 3


1 17 linklaters 67 6

- 18= Maclay Murray & spens 45 1

61 18= Travers smith 45 1

- 20 Greenberg Traurig 42 1

H1 2009

H1 2010


No. of deals

1 1 linklaters 67 6

- 2 vieira de Almeida & Associados 1,359 3

63 3 White & Case 882 3

- 4 Dewey & leBoeuf 273 3

48 5 CMs 263 3

- 6 DlA Piper 76 3

- 7 Jones Day - 3

- 8 Morais leitao Galvao Teles soares Da silva & Associados

1,123 2

- 9 Campos Ferreira, sa Carneiro e Asociados 882 2

- 10 Mayer Brown 273 2

- 11 Pinsent Masons 4 2

- 12 selmer - 2

- 13= Bredin Prat 727 1

19 13= Cleary Gottlieb steen & Hamilton 727 1

- 13= Demarest e Almeida 727 1

- 13= Pinheiro Neto Advogados 727 1

18 13= Uria Menendez 727 1

- 18= Ashurst 273 1

- 18= Cooley 273 1


The financial adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010, excluding lapsed and withdrawn deals. The tables are pan-European and are based on the following sectors: Construction.

The legal adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010 and include lapsed and withdrawn deals. The tables are pan-European and cover on the following sectors: Construction.


45

M&A activity in the Gulf Co-operation Council (GCC) remains subdued, although deal flow has picked up since 2009. The number, and size, of deals being transacted is still constrained by the lack of liquidity. However, a greater number of deals are being closed and indications suggest that this trend will continue.

That said, headline deals are still taking place, namely in the TMT and Financial services sectors. Etisalat, the UAE telecom company, is still looking at making acquisitions abroad in places such as syria and libya. And the planned merger between Qatar’s Al Khaliji Bank and the International Bank of Qatar (IBQ), as well as Abu Dhabi Commercial Bank’s (ADCB) takeover of rBs’ retail arm in the UAE, are early signs that there could be much needed consolidation in the Financial services sector, in the UAE in particular.

The downturn in the real Estate sector has been a catalyst for mergers, primarily in Qatar and the UAE. The Qatari real estate firm, Barwa, and Qatar real Estate Investment (Alaqaria) have merged, as have UAE-based real estate companies sama Dubai, Tatweer Dubai and Dubai Properties Group, who now fall under the umbrella of Dubai Holding. It was also recently announced that limitless, another Dubai-based real estate developer, will be brought under the control of Nakheel; still, more government-initiated mergers in the real Estate sector could come about in the following months. In addition, cash-rich buyers will continue to be sought for distressed assets in this space.

At the other end of the spectrum, Education, Healthcare and the Consumer goods industries, such as food processing, are likely to remain a principle focus of M&A activity in the GCC region. These sectors are considered

‘recession-proof’ given the region’s young and growing population and constant demand for these types of goods and services.

renewable energy is likely to continue to attract investor interest, especially from European renewable energy companies, and private equity firms who may look to establish green field joint venture projects. However, the extent to which enthusiasm for renewable energy projects will be translated into real investments will depend on how competitive they prove to be in relation to fossil fuel related projects, which, in the GCC, are heavily subsidised.

large-scale infrastructure projects will also be an important driver of regional M&A activity in the year ahead, primarily in saudi Arabia, Qatar and Abu Dhabi. The establishment of joint venture arrangements to finance and build projects such as roads, bridges, water and desalination in the form of Public Private Partnership (PPP) schemes are becoming increasingly common.

Opportunities may also lie where private financing of public sector projects has been traditionally shunned, as attitudes are changing. The Dubai Electricity and Water Authority (DEWA) has announced it will tender for its first privately operated power and water plant in the first quarter of 2011, for example.

Moving onto the league tables, Barclay’s Capital and Goldman sachs topped the financial advisers for value and volume, respectively. While on the legal side, Herbert smith/Gleiss lutz/stibbe came first by value with €9.76bn, while linklaters topped the volume charts with five deals.

by Lucia Dore

tHe middLe eAst & nortH AFriCA

THEMIDDlEEAST&NOrTH

AFrICA

DEAl DrIvErs – EUrOPE –THE MIDDLE EAST & NoRTH AFRICA

“ MENA renewable energy is likely to continue to attract investor interest, especially from European renewable energy companies, and private equity firms who may look to establish green field joint venture projects.”

46

47


tHe middLe eAst & nortH AFriCA

Announced date

Status Bidder company Target company Sector Vendor company Deal value (€m)

30-Mar-10 C Bharti Airtel limited Zain Africa Bv TMT Mobile Telecommunications Company KsC

7,977

08-May-10 C Qatar Holding llC Harrods limited Consumer Mohamed Al Fayed (private investor)

1,742

17-Feb-10 C International Petroleum Investment Company

Barclays Plc (5.20% stake) Financial services 1,428

19-Jan-10 C vinci sA Cegelec sA Industrials & Chemicals Qatari Diar real Estate Investment Company

1,292

15-Apr-10 P Olayan Group Chipita International sA Consumer vivartia sA 730

21-Mar-10 C Qatar Navigation Company QsC Qatar shipping Company QsC Transportation 678

15-Apr-10 P Qatari Diar real Estate Investment Company

veolia Environnement sA (5.00% stake) Industrials & Chemicals 647

10-Jan-10 C Barwa real Estate Company QsC Qatar real Estate Investment Co real Estate 598

20-May-10 P Jindal steel & Power ltd shadeed Iron & steel llC Industrials & Chemicals Al Ghaith Holding PJsC 374

18-Jan-10 P M1 Group ltd Bank Audi sAl - Audi saradar Group (13.95% stake)

Financial services EFG-Hermes Holding Company 313

30-Mar-10 C Orascom Construction Industries sAE

DsM Agro Bv; and DsM Melamine Bv Industrials & Chemicals royal DsM Nv 310

15-Mar-110 C Kingdom Holding Company Kingdom Hotel Investments (43.90% stake) leisure 274

08-Jan-10 P Petrosaudi International ltd UBG Berhad (89.80% stake) real Estate Cahya Mata sarawak Berhad 223

18-Feb-10 C Eurasian Natural resources Corporation Plc

Comit resources FZE; and Chambishi Metals Plc

Energy, Mining & Utilities International Mineral resources Bv

222

06-Jun-10 P lap Green Networks Zambia Telecommunications Company limited (75.00% stake)

TMT Government of the republic of Zambia

215


TOP15ANNOUNCEDDEAlSFOrHAlF-YEArENDING30JUNE2010-MIDDlEEAST&NOrTHAFrICAAllSECTOrS


48

tHe middLe eAst & nortH AFriCAMIX OF DEAls BY GEOGrAPHIC rEGION

QUArTErlY TrENDs


VALuE VoLuME

18.4%

20.1%

22.0%

2.5%

7.1%

8.4%

20.8%

0.7%


Financial Services

Business Services

Consumer


TMT

Leisure

Transportation


Construction

Real Estate

Defence

Agriculture

18.4%

20.1%

22.0%

2.5%

7.1%

8.4%

20.8%

0.7%


Financial Services

Business Services

Consumer


TMT

Leisure

Transportation


Construction

Real Estate

Defence

Agriculture

20.4%

24.5%

14.3%

16.3%

8.2%

4.1%2.0%

2.0%2.0% 6.1%


Financial Services

Business Services

Consumer


TMT

Leisure

Transportation


Construction

Real Estate

Defence

Agriculture

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Valu

e (€

m)

Quarter ended

0

10

20

30

40

50

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Q407

Q307

Q207

Q107

Q406

Q306

Q206

Q106

Q405

Q305

Q205

Q105

Q404

Q304

Q204

Q104

Volu

me

Quarter ended

VALuE VoLuME



49


tHe middLe eAst & nortH AFriCAFINANCIAlADvISErS



H1 2009

H1 2010


No. of deals



4 3 HsBC Bank 8,655 3



13 6= BNP Paribas 7,977 1

- 6= Global Investment House 7,977 1

- 6= state Bank of India 7,977 1


9 10 lazard 1,964 2




3 14 Bank of America Merrill lynch 971 1

8 15 rBC Capital Markets 971 1

28 16 Qinvest 678 1


10 18 Citigroup 274 2

- 19 Perella Weinberg Partners 274 1

- 20 TD securities 227 1

H1 2009

H1 2010


No. of deals



4 3 HsBC Bank 8,655 3






6 9 lazard 1,964 2

7 10 Citigroup 274 2

27 11= PricewaterhouseCoopers - 2

9 11= swicorp - 2

16 13= BNP Paribas 7,977 1

- 13= Global Investment House 7,977 1

- 13= state Bank of India 7,977 1


3 17= Bank of America Merrill lynch 971 1

13 17= rBC Capital Markets 971 1

28 19 Qinvest 678 1


H1 2009

H1 2010


No. of deals



43 3 AZB & Partners 8,558 3

12 4 Allen & Overy 8,287 4

- 5 Talwar, Thakore and Associates 7,977 1



- 8= Darrois villey Maillot Brochier 1,292 1

31 8= Weil Gotshal & Manges 1,292 1

- 10 simpson Thacher & Bartlett 971 1

- 11 Davis Polk & Wardwell 647 1

- 12= Badri & salim El Meouchi 598 1

- 12= Hassan A. Al-Khater 598 1

23 12= White & Case 598 1

16 15 Dewey & leBoeuf 587 3

8 16 Gibson Dunn & Crutcher 549 3

2 17 shearman & sterling 374 1


- 19= Cleary Gottlieb steen & Hamilton 310 1

- 19= Houthoff Buruma 310 1

H1 2009

H1 2010


No. of deals




23 4 Norton rose - 4

43 5 AZB & Partners 8,558 3

5 6 Dewey & leBoeuf 587 3

10 7 Gibson Dunn & Crutcher 549 3



- 10 Jones Day 222 2

9 11 Clifford Chance - 2

- 12 Talwar, Thakore and Associates 7,977 1

30 13 loyens & loeff 1,742 1

- 14= Darrois villey Maillot Brochier 1,292 1

31 14= Weil Gotshal & Manges 1,292 1

- 16 simpson Thacher & Bartlett 971 1

- 17 Davis Polk & Wardwell 647 1

- 18= Badri & salim El Meouchi 598 1

- 18= Hassan A. Al-Khater 598 1

12 18= White & Case 598 1

The financial adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010, excluding lapsed and withdrawn deals. The tables are based on dominant target, bidder or seller company geography being Middle East and North Africa, and cover all sectors.

The legal adviser league tables by value and volume have been run from 01/01/2010 to the 30/06/2010 and include lapsed and withdrawn deals. The tables are based on dominant target, bidder or seller com-pany geography being Middle East and North Africa, and cover all sectors.

lEGAlADvISErS

DEAl DrIvErs – EUrOPE –CouNTRy ouTLooK

CountrY outLook – introduCtion

sPotLigHt: itALY

COUNTrYOUTlOOk

Different countries have felt and dealt with the impact of the recent financial crisis in different ways. The following features, which have previously been published on mergermarket.com, aim to provide an insight into how individual countries have been impacted, what steps they have taken to ensure a return to economic stability, and give expert insight into the future of M&A in individual countries.

Catherine Ford Managing Editor, Remark

Fabrizio Pezzani, vice President of CariParma, says that Germany’s Budget law could be another trigger for M&A, especially for Italy’s small and medium-sized manufacturers of mechanical components, the main suppliers to German industry. The German government aims to cut public expenditure without increasing taxes, and it will increase investment in education and cut vAT, a move expected to bolster consumers’ confidence and keep them buying goods. Companies that supply German peers from Italy’s main industrial areas, especially those based in lombardy, Emilia-romagna and the North East, could benefit from the measures being implemented across the border.

The Italian government’s efforts to cut public expenditure is also expected to trigger M&A activity, as the suppliers to the public administration are expected to go through a Darwinian selection. small-caps, which have more difficulty accessing banking credit and who already suffer from a delay in receiving payments from public institutions, will find the squeeze on working capital especially difficult. This will be in the biomedical area, where mid-caps and blue chips may make bolt-on acquisitions. Given the defensive nature of this niche, private equity firms have shown interest in acquiring companies in the industry. Esaote, the Italian private equity-backed maker of medical devices, could be an active consolidator in the sector, said a banker familiar with the company.

M&A for industrial companies and food producers will depend to a large degree on the recovery of the industrial outlook, bankers said. Interpump, the listed Italian pump manufacturer, or Parmalat, the listed dairy company, could take advantage of the current Euro-Us Dollar exchange rate to carry out cross-border M&A.

The sources said that private equity firms are involved or are expected to take part in transactions in defensive sectors like the ones mentioned above, but they could also renew their interest in consumer and retail companies such as Findus, Teamsystem and Coin, which is expected to be up for sale in the last quarter of the year or in early 2011, as reported by the Italian press.

Many financial firms have to invest the funds that they raised in 2005 and 2006; however, the private equity houses are still facing difficulties in raising funds and in debt financing. Although the Italian M&A market seems to be moving towards a recovery, many financial actors in Italy are still working only on restructuring situations, industry sources have said, and any revival is still based on hope rather than solid evidence.

The credit crunch is not yet over and many transactions will be pursued through a share swap or an asset swap to save cash, they said. Core sectors – Industrials and Consumer – remain the safest harbour for transactions.

by Francesca Ficai and Salvatore Bruno

M&A activity in the remainder of the year in Italy will be driven the government’s efforts to cut the deficit and boost exports, bankers and executives said. The weakening of the Euro against the uS Dollar is also expected to stimulate consolidation in the Manufacturing and Automotive sectors during the remaining months of the year and early 2011, according to industry sources.

50

The robust recovery of M&A in France at the beginning of 2010 hit the skids in the second quarter over the sovereign debt crisis and the ensuing European austerity packages. However, top M&A players have voiced confidence that cross-border deals and private equity investment will support the market in the months to come.


sPotLigHt: FrAnCe

“This mini-crisis has served as a reminder to over-optimistic players that we are not out of the woods yet,” commented Nadine veldung, head of debt advisory at DC Advisory Partners (formerly Close Brothers). Banks are again extra-vigilant, asking in most cases for 50.00% equity to finance deals. As a result, she sees support for operations in the realm of €500m-€800m, with others remaining difficult to finance on bank debt alone.

However tense the situation, it is by no means as dismal as in 2009. “We have witnessed a lot more activity in the first half of 2010 than the same period of last year,” commented Jacques Isnard, an M&A lawyer with CMs Bureau Francis lefebvre in Paris.

According to data compiled by mergermarket, the total value of deals in France for the first half of 2010 was €21.08bn compared to €4.74bn for the same period last year. For the same two periods, the number of deals involving a French target was 238 in 2010 and 187 in 2009.

A number of deal announcements have illustrated these figures, showing that banks or corporations still want to conduct strategic operations. French bank societe Generale is to buy societe Marseillaise de Credit for €872m, rhodia was willing to pay a high multiple for China chemicals group Feixiang and Bureau veritas, the commodities inspection group, will buy the UK’s Inspectorate for €543m.

Patrice vial, Chairman in Paris of Hawkpoint, the M&A advisory firm, pointed out the debt issue has forced governments to address head-on the question of budget deficits, “Domestic growth will be impacted by austerity programs, so M&A activity will be supported by areas with intrinsic growth potential,” these could include high-technology, health and services to individuals.

Eric Meyer, a senior banker with societe Generale, said, “strategic deals that have been stopped since 2007 will be coming to the fore,” mentioning the chemical, petrochemical and pharma industries.

“larger deals will be mainly cross-border”, said Franck Ceddaha, a Partner with Oddo Corporate Finance. The stellar operation of the year has been Honeywell’s all-cash, €1.11bn offer to buy sperian (protection equipment), which out-bid the proposal from private equity firm Cinven. A recently published survey by PricewaterhouseCoopers and ArFA (Association of mergers and acquisitions), reported that 69% of large French companies are ‘actively looking for external growth opportunities’ in Brazil, India, China and russia. Among companies looking for targets are Accor (hotels), Danone (dairy products), Havas (advertising) and JC Decaux (outdoor advertising).

Isnard from Bureau Francis lefebvre sees a lot of activity around renewable energy, due to fiscal incentives and EU encouragements, mid-cap deals in the Pharma, Medical & Biotech sector and also the aeronautics industry. Zodiac, for example, is actively looking for acquisitions.

In banking, large divestitures have been requested by the European Commission for groups which have received state aid such as Dexia, ING or rBs. This will create opportunities for French banks, said Jacques Buhart, a lawyer with Herbert smith in Paris.

so far, large deals in the Financial services sector have been affected by uncertainty over the new rules that will be requested by the Basel Committee on Banking supervision (BCBs), a senior M&A lawyer said. BCBs aims to finalise new capital and liquidity requirements by November this year.

such rules, combined with those that will apply to insurance companies under the forthcoming solvency II EU regulation, may force large French banks to divest their insurance subsidiaries, this source said. “The cost of regulation will be just too high,” he reported.

There is, however, a bright side to the sovereign debt crisis. As Gonzague de Blignieres, Head of Barclays Private Equity in France said, “The Euro was much too high, now it is back to reasonable levels”. Finally, “European exporters will be able to breathe” and that should have a very salutary impact on two key sectors of the French economy.

Also, portfolios must turnover. In France, there are around 5,500 companies that have private equity funds in their capital, including 2,000 through lBOs. “That means that roughly, 200-300 companies will be sold in the next five or six years,” says Blignieres, a trend that will maintain an increase in M&A activity. In the immediate future, press reports have noted a process has started for the sale of French group B&B hotels by private equity owner Eurazeo. Meanwhile, previous reports from this news service have said that BC Partners is sounding out the divestiture of Picard surgeles and lBO France, and Barclays PE have just launched the divestiture of Medi Partenaires, the French hospital business, which could fetch over €1.00bn.

by Blanca Riemer

51

sPotLigHt: nordiCs

The economic downturn has underscored the potential of the non-cyclical healthcare niche. As the markets in general remain volatile, the area continues to be attractive for investors – regardless of the results in the forthcoming parliamentary elections due this september.

“Private equity firms are attracted to healthcare companies for their high cash conversion, high leveragability, low churn rate, for being asset-light and in a growing sector,” said one banker. The major firms Ambea, Aleris and Attendo – all backed by private equity – continue to scout for acquisitions, he noted.

Apart from the takeover of Ambea, other deals include Frosunda and solhaga, which have also been secondary buy-outs. Aleris is reportedly being sold by its private equity owner EQT.

A regulation giving patients the freedom to choose between public and private healthcare providers was enacted in 2009. The process has gone too far for the agenda to shift, even if the government, the Conservative Alliance, loses power to the social Democrats, say bankers.

The so called lOv regulation has cut the political risks for investments, the bankers said, noting that the private sector, therefore, will continue to increase market share. Only about 10.0% of the market is in private hands, the first banker pointed out.

Meanwhile, in Norway, the Energy sector continues to consolidate. Companies in the sector have largely been able to avoid the brunt of the financial crisis and could home in on international targets, according to a local M&A lawyer focused on the sector.

Norway is predicted to be stable for the next 10 years, with few new concessions for additional drilling projects expected to be in play. This will drive companies to look for growth internationally, an industry source said. Gas exploration will be a particularly interesting area for international growth, he noted.

Another sector expert, however, expressed concern that, while the sector is showing considerable promise for international expansion, particularly in the area of unconventional gas exploration and downstream activities, large players tend to bypass new markets in favour of relying on the tried and tested home ones.

A banker with knowledge of the sector concurred, but added that large Norwegian companies are still in a strong position to enter new markets. sector firms need to take advantage of this position before companies from other countries begin to get back into position following the recession and the window of opportunity closes.

In particular, Eastern Europe and countries around the Caspian sea are opportune areas for investments. Companies such as statoil and statkraft could be among the ones looking at these geographies, local dealmakers suggested.

In Finland, corporate interest in M&A is returning, according to Jussi Majamaa, Head of M&A at Pohjola Bank.

Finnish industry is largely export driven and will receive a boost from global demand as the Euro continues to trade low. Confidence indicators among corporate leaders reflect a positive outlook for order volumes. As a consequence, M&A is returning to corporate agendas, Majamaa said.

As economic activity recovers, investors will seek growth above GDP and are ready to accept a higher level of risk. This will not be found across every sector in Europe, resulting in Finns turning their gaze towards developing markets, including russia, Majamaa said. strategic firms are also ready for large moves, exemplified by the telecommunications firm DNA’s acquisition of cable Tv firm Welho.

Aside from strategic players, private equity funds are also awash with uncommitted capital and are under pressure to engage in new investments, Majamaa noted. The rallying stock markets have encouraged certain private equity firms to seek exits, largely driven by the maturity of their portfolios. CapMan’s acquisition of Havator, an industrial equipment specialist, is a clear indication that private equity firms are ready to invest in cyclicals, for which there was no demand last year, Majamaa added.

Meanwhile, in Denmark, the IPO pipeline for large transactions has been especially strong this year, but only one major company managed to list so far.

Nordic Capital referred to the uncertain IPO market as the main reason for withdrawing its attempted listing of Falck in Copenhagen in June. Private equity-backed TDC’s floatation of its 88.0% delisted stake was put on hold after the swiss competition authority banned the merger of its sunrise division with France Telecom.

Of the expected major IPO transactions this year, only Chr. Hansen managed to list on the Copenhagen OMX. A domino effect could follow and the many companies that have prepared for a listing may find an opening in the second half of the year, said a banker. Many companies will be ready when the market turns, the banker said.

M&A activity is also set to pick up in the second half, with increased scope for several small to mid-sized transactions, say bankers. In the Financial services sector, for example, bigger banks could pick up banks that lack the backing of the government’s bail-out fund to access new customers.

If, by 30 september 2010, banks fail to meet certain liquidity and solvency criteria, they may no longer be backed by the Danish government’s current guarantees. There could also be incidences of mergers of equals amongst the local banks to increase market share and withstand potential takeovers, it was suggested.

by Hanna Gezelius, Sigve Moen and Kasper Viio

Starting with Sweden, consolidation in the country’s healthcare sector, exemplified by the €1.13bn private equity buyout of Ambea, is set to continue.


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sPotLigHt: germAnY

As Hawkpoint Partners Germany head richard Markus puts it, “The weaker Euro means that many of the very export-orientated German companies should be able to boost their sales and profitability, making them as strategic investments even more attractive.” Financing too will be cheaper for Us investors, for whom Markus says, “The weaker Euro makes acquisitions more affordable; for every €100 you now only have to finance Us$120 rather then Us$150 a few months ago.”

Markus and the first banker agree that the German banking sector’s need to ‘de-risk itself’ will see continuing consolidation, with the future of the federal state landesbanks still unresolved and smaller organisations needing size to survive. The first banker, however, points out that a corresponding squeeze on lending will see the small and medium-sized Mittelstand businesses, which drive the economy, being forced to open up traditionally closed ownership to outside investors. Markus argues that large corporates too will revisit the difficult disposals of yesteryear, with newly mandated CEOs and CFOs taking a hard look at non-core assets.

The most obvious example here would be the management of industrial giant ThyssenKrupp which, having waited too long to sell a slew of capex gobbling Industrial and Automotive supply assets, may now want to clear the decks for a new chapter in the group’s development. Confirmation this month of talks to sell the company’s metal forming division, ThyssenKrupp Umformtechnik, may be the first signs of this remodelling, while fertiliser giant K+s has put its Compo brand on the block. At the same time, advisers are running a slide rule over the non-core assets of companies like engineering group Bosch and logistics company Kion, although few industry bankers doubt reviews will be anything but slow and cautious.

The Industrials sector, which last year accounted for a whopping 31.69% of German M&A, will continue to dominate German M&A activity for the rest of 2010.

real Estate was, in many ways, the boom that never happened in Germany. Companies like Hypo real Estate, which played the wholesale financing markets, or thought they would see a similar value spike as the UK, quickly got their fingers burnt. But the credit crunch and Europe’s following crisis has seen German real Estate companies revert to a more conservative residential, rather than commercial portfolio, industry sources say. One German real Estate sector insider describes an expected consolidation of more than 40 small and medium-sized German companies in the sector, with players such as Ariston and MAGNAT likely to play a role. The insider points out however, that, for the moment, seller and buyer expectations remain far apart, with most companies performing well enough not to have to sell.

The big unknown in all of this remains Germany’s ailing coalition government. Even before becoming the Eurozone’s main creditor, Germany expended billions on stabilisation programmes covering everything from the nationalisation of several banks, through to the support for the Automotive sector, and even to a €300m loan to print machine company Heidelberger Druckmaschinen. The ensuing cuts and tax rises will affect German industry in different ways.

A German Aviation sector expert argues that international airlines could switch their European hubs from Germany to Paris in anticipation of an ecological tax per passenger scheduled for 2011, which is forecast to raise only €1.00bn. The move, he explains, could see the outsourcing of catering and other services as regional airports such as Hamburg slim down. Meanwhile, a solar industry source observed that a proposed 16.0% cut in subsidies (rumoured to be commuted initially to 10.0%) has, for the moment at least, ironically rejuvenated a sector that had been under pressure as customers rush to complete their projects before the subsidy ends on 1 July. The sudden flurry of business may not, however, be enough for those such as Q-Cells and Conergy, who were hit by the recession and rising material prices, to be the kind of potential consolidators seen in solarWorld and solar-Fabrik. The split fortunes of an industry which had been so unmistakably German may, therefore, lead to a transformation as newer players from Asia and the Middle East muscle in.

by Thomas Williams, Johannes Koch, Laura Larghi and Sarah Syed

German earnings viability remains poor, one German banker, who preferred not to be named, said. A second even went so far as to say that exposure to the Eurozone’s sovereign-debt crisis might even be a catalyst for uS investors in Germany to sell their assets more aggressively, although this does not appear to be a widely-held view.

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sPotLigHt: PortugAL

The sources contacted by this news service highlighted the fact that although the Portuguese economy is showing some signs of recovery, growth is expected to be very modest, which will directly affect M&A activity. The first quarter data from INE, Portugal’s statistics institute, is positive, though Portugal’s credit rating was downgraded in this period and shortly after.

One M&A banker has noticed that quite a few deals have broken down. Despite the appetite for financial and industrial investors to do deals, it has been difficult to come to an agreement, mainly due to the sharp fall in prices on the back of financial crisis. In this situation, shareholders prefer to hold on to their assets, rather than sell at rock-bottom prices, said the banker, who added that lack of easy access to financing was key to the pulling out of negotiations.

This banker has also noted that in Portugal there have been cases similar to that which has been happening in spain: construction companies that have over the years expanded into other areas related to sector, such as energy and environment, are starting to sell. On the buy-side, Portuguese companies are eager to invest abroad – particularly in Portuguese-speaking countries, mainly Brazil, Angola and Mozambique. These investors do not want to be limited to the Portuguese market, where growth prospects are very discouraging.

Although there continues to be interest from investors abroad (mainly from Europe in general, but also from Angola and Brazil) in Portuguese companies, the recent liquidity problems and downgrade of Portugal’s credit rating could have a certain impact on whether these investors decide to acquire here.

Financing either does not exist or the cost is too high, says another banker, which is delaying deals. After financing, this banker suggested that the most significant barrier has been, and continues to be, expectations in terms of price. On the one hand, buyers want to take advantage of the opportunistic atmosphere, while sellers are very tied to earlier evaluations of their businesses.

When asked to identify trends, the source pointed to an increase in deals be in more stable sectors, as investors have become more averse to risk in the current financial and economic environment. In regards to cross-border activity, this banker noted a general openness of Portuguese investors acquiring in neighbouring spain, where the financial crisis has had more of an effect, particularly the real Estate sector.

One Portugal-based economist believes there is a possibility the Portuguese economy will grow modestly this year. The economist highlighted the fact that exports were up 8.5% in the first quarter, and though he believes the economy is rebounding, general medium-term expectations are still fragile.

While the Portuguese government’s measures in its stability and Growth Pact is supposed to help balance the country’s books, there are expectations that these measures will have a negative impact.

Another economist that covers Portugal noted that while exports were up 8.5% in the quarter, this is compared to the first quarter of 2009, the lowest point of the economic and financial crisis. The economist also noted the positive data is mostly a reflection of Portuguese companies benefiting from the international recovery.

However, if the different variables are looked at quarter-on-quarter, there is effectively a recovery, he said. Great efforts were made by small and medium-sized Portuguese companies to keep their businesses going, said the economist, who said the main talk of the Portuguese economy at the moment is competitiveness, which has to improve if the recovery is to be sustained.

This economist believes that there will be a continued slow-down in the M&A environment for the rest of 2010, due mainly to a lack of financing and over-leveraging of companies. Beyond this year, there should be more financial flexibility with the less-leveraged and increasingly fragmented small to medium-sized manufacturing businesses being prime candidates for dealmaking. When asked to be more specific, he said Portugal has a huge list of companies that essentially supply bigger companies abroad, such as in the textile, clothing and shoe industries, as well as component manufacturers that supply an array of other businesses that range from industrial machinery to the Automobile sector.

The general expectation in Portugal is that the country’s deficit and debt figures (Portuguese government forecasts for 2010 are 8.3% and 85.4% of GDP, respectively) are likely to get worse this year. The first economist stressed that the measures announced by the government are very recent and some have not even been implemented yet, noting that it is much too early to expect these measures to have any impact this year. The economist prefers to look at the government’s medium-term goals (reducing deficit to 6.6% in 2011 and debt to 60.0% in three to four years).

some measures the economist highlighted include, on the spending side: freezing of public administration nominal salaries; a cut in public administration salaries between 2011-2013; cuts in large public works projects (such as high-speed train lines connecting lisbon to Porto and Porto to vigo). On the revenue side, he referred to: reducing tax benefits for individuals; creation of a 46.0% tax rate for individuals with more than €150,000 in annual income; creation of toll charges on new motorways that were up to now free; and expected revenue of around €6.00bn from privatisations between 2010 and 2013.

by Nelson Rodrigues

Economists and M&A bankers who follow the portuguese market have said that they believe M&A activity this year will continue its trend from last year, which was slow, mainly due to lack of financing. Some only see deals in more stable sectors, such as Infrastructure and Energy, in the short to medium-term. While portuguese companies are eager to acquire, specifically in neighbouring Spain and portuguese-speaking countries, access to financing is the main barrier.

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DEAl DrIvErs –CouNTRy ouTLooK

sPotLigHt: sPAin

Deal activity flourished in spain in the first half of the year, despite fears over the sluggish economy and a surprising lack of IPOs. Deals so far have included a large number of mergers between savings banks, restructuring-led M&A by companies like media specialist Prisa and a return to aggressive overseas buying by large-cap companies such as Telefonica.

While the consolidation of savings banks will end this month, there are still more deals in the pipeline, including Banco santander’s position as the last remaining buyer for a series of branches that royal Bank of scotland is selling in the UK. Among other deals in the pipeline, Endesa is looking for a financial partner to invest some €800m in return for 80.0% of its gas network.

Oil company repsol YPF is considering an IPO of its Brazilian unit to raise funds to help develop a number of upstream oil discoveries off the shore of Brazil. A secondary listing of YPF in Argentina is also possible. repsol will also be impacted by a new law ending a corporate bylaw restricting the voting rights of shareholders to 10.0%. repsol’s 20.0% shareholder sacyr vallehermoso, a property and construction company, has been pushing for bigger dividends.

Construction company ACs wants to raise its stake in Iberdola to 20.0% and is seeking a greater say in how the electricity company is run. ACs has also said that it is in talks with a number of possible bidders who want to invest in its infrastructure affiliate Abertis.

One property source said that there will be further concentration in the sector in the second half of the year. Once this month’s deadline for savings bank mergers passes, these entities are likely to continue to restructure their property holdings through M&A activity, the source said.

several private equity executives also said that their companies have a great opportunity to acquire assets of industrial conglomerates. They said that these conglomerates must focus on their core businesses and will have to sell some very attractive assets.

In the longer term, there is also likely to be activity among spain’s builders and infrastructure companies. Public Works Minister Jose Blanco told a conference in santander that six of the ten largest Construction companies in the world are spanish. He said that the privatisation of 30.0% of airports operator AENA has been discussed, but would not comment further. One infrastructure expert called on the government to privatise the company, as well as rail companies renfe and ADIF.

Although the M&A pipeline is looking healthy, the main risk facing spain in the months ahead comes from faltering market confidence in the country’s future, according to experts who are studying the situation. One economist close to the opposition Popular Party (PP) said that the combination of weak public finances and panicking markets could lead to a ‘vicious cycle’. In this scenario, spanish public debt would be progressively sold, which could impact upon the cost of financing for the state – it could reach a point where the debt can’t be financed, leading to a bailout, the economist said.

Even so, the economist said that the ruling socialist party, led by Jose luis rodriguez Zapatero, has finally bitten the bullet and is taking the right steps to ward off this scenario. The government has announced deep budget cuts and is negotiating labour market flexibility measures with trade unions despite the threat of strikes from its erstwhile allies.

Treasury secretary Carlos Ocaña said that an incipient recovery is now under way, even though the economy is unlikely to grow this year. Despite his underlying confidence, he said that spain has three main problems: an unemployment rate of more than 20.0%; a high public deficit; and lack of credit from banks.

In order to cut unemployment, the government is in talks to reduce labour costs. It has also announced an austerity plan to cut its 11.0% deficit, compared to a euro-zone average of 6.0%. The aim is to bring the deficit to 3.0% of gross domestic product (GDP) by 2013 from a forecast 9.3% this year. Finally, the government has also set up the Orderly Bank restructuring Fund (FrOB) to encourage mergers among unlisted savings banks and clean up their balance sheets. The savings banks were more exposed to the property boom than the listed banks.

Both the economist who is close to the PP and Ocaña said that the underlying challenge for the spanish economy is to return to competitiveness. The country has higher labour costs per hour than its European peers. The first economist and a former socialist minister both said that spain has come through other crises in the past and return to growth in the future. The economist forecast growth returning in 2011 and hitting 2.7% in 2013.

Meanwhile, Juan Maria Nin, CEO of savings bank la Caixa, said that spain’s unemployment rate, which is much higher than elsewhere in Europe, is the main problem facing the country. He said that, “It will be a question of time” before the underlying difficulties in the construction sector work themselves out. The labour-intensive industry collapsed in the early days of the credit crunch.

M&A activity in Spain will have a healthy outlook if the Southern European country can stay out of the sovereign debt crisis that began in Greece.

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While the government tries to sell its austerity plan and labour reforms to reluctant unions, it continues to insist that the risk of a bail-out is minimal. “It is false that spain is negotiating or plans to negotiate a financial package with any European or international institution,” Ocaña said. He added that spain is working to avoid using an emergency fund that has been created by Ecofin.

Pedro solbes, who was Zapatero’s finance minister until last year, said that the risk of tapping into European bail-out funds is ‘minimal’. However, he also said, “The problem is not the level of indebtedness but how fast it has increased and how to achieve the stability of the deficit”.

According to figures from the Bank of spain, corporate debt in 2009 was equivalent to 138.6% of GBP, while household debt was 85.0% of GDP. This was largely due to a credit boom between 2003 and 2007. During this time, credit to developers rose 300.0%, credit to builders went up 130.0% and household mortgages grew 125.0%.

The country’s unlisted savings banks (cajas de ahorro), which are run by regional politicians, were at the forefront of lending to developers and offering mortgages on new houses. The government’s FrOB has €90.00bn to encourage a series of mergers by the end of this month to cut the number of 45 cajas in half. so far, two savings banks have had to be rescued by the Bank of spain, while many in the sector are opting to set up ‘virtual mergers’, where they become shareholders in new banking entities.

rodrigo rato, the former PP finance minister who now chairs savings bank Caja Madrid, said that there are an unsustainable number of branches. Meanwhile, Francisco Gonzalez, chairman of large listed bank BBvA, said that the credit markets remain closed for most small businesses.

The Bank of spain is currently running stress tests for the sector as a whole. Analysts at BPI ran an aggressive stimulation, which supposed losses of 50.0% in real Estate and Construction loans, and 70.0% losses in terms of real Estate assets. The analysts found that the cajas would face collective losses of €26.50bn (40.0% of their equity), which is within the capacity of the FrOB. The analysts also found that BBvA and Banco santander could cope with these losses without any major hurdles.

by Virginia Garcia Martinez in Santander and Rupert Cocke and Iñaki Miguel in Madrid

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sPotLigHt: PrivAte equitY

some buyout funds have begun making direct equity investments into high growth assets to avoid leveraging deals. Others are eyeing turnaround situations, or turning to corporates that are keen to dispose of non-core assets. As the credit markets gradually become unstuck, secondary buyouts have re-emerged as a satisfactory solution for both seller sand buyers, especially at the top-end of the market, industry experts said.

The macro-economic situation of individual European countries plays a huge part in the willingness of non-domestic investors to commit to private equity and, in turn, local bankers to lend to support deals. European institutions have begun reducing allocations to spanish funds, alarmed by the public deficit and government spending cuts, according to local players. Nordic markets, meanwhile, have been far less impacted by the financial crisis, with banks continuing to lend at reasonable multiples, a partner at a swedish private equity firm said.

Multi-billion Euro mega buy-out funds raised before the financial crisis are facing extra pressure to commit funds before investors ask for their money back. Consequently, bolt-on acquisitions are likely as a neat way of deploying leftover capital once a fund’s investment period has expired. Take Mint Capital, a low to mid-market scandinavian fund investing in russia, which raised €101m (Us$130m) in 2005. It is around 80.0% invested and anticipates making no new portfolio companies this year, so remaining capital will be spent on firms it has already purchased, a source close to the fund said.

At the upper end of the scale, BC Partners has now invested around 80.0% of its €5.90bn fund, which was only about 60.0% committed last year, according to an industry source. In the case of BC, it is aiming to make a further two to three investments before the end of year.

European buyout giants anxious to invest include the likes of BC Partners, with its €5.90bn fund raised in 2005, EQT through its €4.30bn 2006 vintage fund, and Permira via its hefty €11.00bn vehicle raised in 2006.

Private equity funds raised in the early 2000s are feeling the heat for a different reason; they need to demonstrate sufficient returns to their investors through healthy exit multiples. shaky market conditions and the well-documented spate of failed IPOs, such as Matalan and New look, are driving private equity houses to err on the side of caution and favour dual track exit routes.

some firms are negotiating with investors for more time. French private equity giant sagard is one of many European funds understood to have negotiated an extra year in which to divest its companies.

Many players fear the worst of the storm is yet to come, with the onset of the European Commission’s Alternative Investment Fund Managers (AIFM) directive threatening to drive local buyout funds overseas to facilitate future fundraising efforts. The financial crisis has also reaped havoc on many portfolio companies, making it hard for private equity houses to repair the damage, let alone seek attractive exit possibilities.

Deals in strong defensive industries, such as energy, healthcare and food are easier to finance. However, competition is starting to drive up prices in the top end of the market. Bridgepoint’s sale of UK group Pets at Home earlier this year is a case in point. Originally valued at £800m (€952m), KKr ended up scooping it up for a cool €1.10bn. With debt multiples of 5.25x EBITDA, the deal was unusually highly leveraged for a retail business.

by Fay Sanders

The debt crisis spreading across Southern Europe sent shock waves rippling across a private equity industry still reeling from the global financial crisis. The tightening of debt markets is, unsurprisingly, affecting European buyout activity. Expect to see more secondary buyouts and bolt-on deals in the coming months, as players struggle to find the best way of deploying capital. Dual track sales processes, meanwhile, are a handy way for investors to hedge their bets in terms of exit opportunities.


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62 How focused are you?

On average, executives allocate only 25 per cent of their time to the integration of intangibles. A dangerous mistake…

Find out more in Hay Group’s latest M&A report on the barriers to M&A integration in: ‘The silver bullet of success – winners and losers in the M&A game’.

For more information go to: www.haygroup.com/silverbullet


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About HAY grouP

Hay Group is the only management consultancy that helps merging organizations manage both the tangible and the intangible elements involved in a merger or acquisition. We help businesses ensure that the value of the newly formed organization is realized right from the start.

lack of attention in terms of protecting the intangibles before, during and after the M&A deal can create major problems for CEOs years after the ink has dried on a contract. A pre-emptive approach right from the

beginning is paramount in achieving successful integration of intangibles and avoids the need to invest time and money to put things right in the long term. Now more than ever, businesses need to look before they leap, and ensure that these M&A opportunities do not turn into expensive mistakes if there is a weak understanding of the intangible capital of the target business and a lack of a long-term strategic view.

Marketing screening Due diligence Pre-closing Post-merger integration

Clarification of the merger strategy Clarification of the merger strategy Clarification and communication of the merger strategy

Communication of the merger strategy

Assessment of the operating model Assessment of the operating model Creation of governance processes for new organization

Implementation and integration of the operating model

Analysis of cultural compatibility Analysis of cultural compatibility Analysis of cultural compatibility and modelling

Building of organization structure and alignment with job design

Research into corporate reputation Review and assessment of top team capabilities

Research into corporate reputation Implementation of cultural compatibility and modelling strategy

Analysis of reward liability and capability

Analysis of reward liabilities, risks and costs

Impact analysis on the customer: pre and post merger

Impact analysis on the customer: post merger comparison

Analysis of employee engagement and effectiveness

Measurement of employee engagement and effectiveness: pre and post merger

Pulse surveys on strategic alignment Pulse surveys on strategic alignment Management and coaching of top team development and capabilities

Management and coaching of top team development and capabilities

Assessment of emotional intelligence for new organization competencies

Assessment of emotional intelligence for new organization competencies

Assessment of climate created by leadership

Help to implement climate change (where required) created by leadership

Creation of succession plans for new organization

Delivery of succession plans for new organization

Structuring of performance management systems

Structuring of reward information services

Analysis of reward liabilities risks, costs and pre-strategy direction

Creation of total reward strategy

Compensation planning for executives

Compensation planning for executives

Development of govenance structure and compensation

Development of govenance structure and compensation

Implementation plan for compensation and benefits programme

Implementation plan for compensation and benefits programmeImplemention of performance management systems

Helping clients to navigate through the multiple priorities during each stage of the deal process:

We partner with clients to work with them through each stage of the deal process. From market screening through to post-merger integration, our consultants bring M&A business expertise to translate strategic objectives into real action – we help clients implement their ‘blueprints’ and ‘roadmaps’.


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Hay Group is a global management consulting firm that works with leaders to transform strategy into reality. We develop talent, organize people to be more effective and motivate them to perform at their best. our focus is on making change happen and helping people and organizations realize their potential.

We have over 2600 employees working in 86 offices in 48 countries. our insight is supported by robust data from over 100 countries. our clients are from the private, public and not-for-profit sectors, across every major industry.

GLoBAL

David Derain joined Hay Group in 1994. Based in Paris, he is currently M&A director globally. He has extensive experience in managing global projects specializing in M&A risk management and integration. Contact: [email protected]

EuRopE AND MIDDLE EAST (EME)

Deborah Allday joined Hay Group in 2004. she is based in london and heads up Hay Group’s M&A work in EME. Deborah works with CEOs and their top teams to increase shareholder returns by improving their delivery of post-integration cost-reduction and growth benefits. Contact: [email protected]

Claude Dion joined Hay Group in 1995 and has 25 years experience in consulting mainly on organizational effectiveness and business management to restructure companies. He is currently responsible for business development in CEE countries and works extensively in M&A post-merger deals.Contact: [email protected]

Frédéric Lhereec joined Hay group in 2004. Based in Paris, he heads up M&A activities in France. He has extensive experience on M&A and organizational transformation projects mainly in the pharmaceutical, oil and gas and telecoms sectors. Prior to joining Hay Group, Frédéric was the director and the founder of a start-up focused on Business Intelligence software. Contact: [email protected]

AFRICA

Malcolm pannell is an associate director based in Johannesburg, south Africa and heads up the practice that includes M&A work. He has extensive experience across a number of industries in restructuring and organizational effectiveness. In particular he has experience in supporting international M&A projects in the beverages and financial services sectors, specifically in the dimensions of organization structuring, culture and executive rewards. Contact: [email protected]

NoRTH AMERICA

George McCormick is a director based at Hay Group’s Boston office. George’s expertise includes the management of merger and acquisition support projects, providing guidance to executives formulating and executing strategies and supporting client teams responsible for functional reorganizations. Contact: [email protected]

SouTH AMERICA

Jean-Marc Laouchez is the south America director of Hay Group’s building effective organizations (BEO) practice and a member of its global team. Within this role he is responsible for the development and delivery of M&A projects. Jean-Marc has in-depth experience in helping clients during their M&A transactions including: pre-closing negotiations, cross-border deals, assessing and managing the intangible capital and developing solutions which deliver cost synergies. Contact: [email protected]

ASIA pACIFIC

Gaurav Lahiri joined Hay Group in 2000 initially in singapore, then transferred to Melbourne before going on to set up Hay Group’s practice in India. Based in singapore, he has a special focus on M&A, working with clients to align their organizations with their strategic agenda. Contact: [email protected]

Brian Langham joined Hay Group in 1986 initially in the UK, moving to singapore in 2008. During his lengthy consulting career he has worked on a variety of M&As in both UK, Europe and globally. He is now regional director for the ‘building effective organizations’ practice in Asia. Contact: [email protected]

Henriette Rothschild is the general manager for Hay Group Pacific. Based in the Melbourne office she also heads up Hay Group’s M&A work in this region. she specialises in organizational change consulting and aligning teams and individuals with the organization’s strategy and purpose. Henriette has delivered successful business solutions working with boards, CEOs and executive teams from a wide range of organizations. Contact: [email protected]

The Hay Group global R&D centre for strategy execution. Based in singapore, Hay Group has established a global r&D centre for strategy execution which researches best practices in strategy execution globally. Achieving effective M&A integration is one of research programmes being conducted during 2010. Contact: [email protected]

HAY grouP ContACts

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Thefollowingnotespertaintodatacontainedinthispublication:

DealsareincludedwherethedealvalueisgreaterthanorequaltoUS$5m.

Wherenodealvaluehasbeendisclosed,dealsareincludediftheturnoverofthetargetisgreaterthanorequaltoUS$10m.

Transactionsexcludedincludepropertytransactionsandrestructuringswheretheultimateshareholders’interestsarenotchanged.

DealsareincludedinthegraphsforeachsectionifthetargetisaEuropeancompany.

ThelistofTopDealsandthedataunderlyingtheleagueTablesarebasedondealswherethebidder,targetorparentofeitherisaEuropeancompany.

Any queries regarding this publication or the data within it should be directed to:

Elias LatsisHead of [email protected]

Erik WickmanPublisher, remarkTel: +1 212 686 [email protected]

Catherine FordManaging [email protected]

Anna HendersonProduction [email protected]

Documents

Deal Drivers EMEA H1 2010