bloomberg brief - mergers year end supplement 2013
DESCRIPTION
Mergers year end supplement.TRANSCRIPT
2013 Year end
review
Mergers
TIMeLINeHighlights of the year in M&A. Page 3
The YeAr AT A gLANCeDeal volumes and breakdowns by sector and region. Page 4
gLOBAL TOP 50The largest transactions. Page 5
BehIND The heADLINesAnalysis of deal size, valuations, investors’ reactions and terminated deals. Page 6
MArKeT DrIVers The background to this year’s deals: rising stock markets, cheap debt, a robust IPO mar-ket and cash-rich balance sheets. Page 8
regIONsActivity levels, sector breakdowns, top deals and advisers. — North America. Page 10 — Europe, Middle East & Africa. Page 11 — Asia Pacific. Page 12 — Latin America & Caribbean. Page 13
PrIVATe eQUITY New investments, exits by sale, financing and IPO exits. Page 14
JOhN MALONe’s BUsY YeAr The cable industry veteran was behind a string of the biggest deals in Europe and the U.S. A chart of Malone’s deals and attempted deals last year. Page 16
DeALMAKer PrOFILes Seven bankers who played key roles in major mergers in 2013. Page 17
CONTeNTs
INTrODUCTION
For the third year running, all the founda-tions seemed to be in place at the outset of 2013 for a surge in merger activity: rising stock prices, an abundance of cash on corporate balance sheets and financ-ing costs at historic lows. When the tallies were made, last year didn’t quite live up to its billing, with total deal volumes up only slightly year on year. Scratch the biggest deal of the year off the list — the long-expected $130 billion buyout by Verizon Communications Inc. of Vodafone Group Plc’s 45 percent stake in Verizon Wireless — and the yearly total would be down a hair from 2012 (page 4).
Still, there were signs of building mo-mentum, including more deals over $500 million, even if mega-deals were still few and far between (page 6). In the private
A Year That Didn’t Live Up to expectations
equity sphere, six new deals worth more than $5 billion were announced, up from three in each of the previous two years (page 14). The biggest, for HJ Heinz & Co. and Dell Inc., were far above that threshold, at $27.4 billion and $16.4 bil-lion, respectively.
In addition to rich stocks, cash and cheap debt, a third force was at work to stir up deals: activist investors. They made their presence felt in 2013, sometimes promoting transactions and other times opposing take-over offers they considered too stingy. The $6.7 billion buyout of BMC Software Inc. by Bain Capital LLC and Golden Gate Capi-tal in September grew out of a campaign by activist Paul Singer’s Elliott Management Corp. in 2012. Likewise, QEP Resources Inc. agreed in December to separate its
natural gas gathering and processing businesses, a goal of Jana Partners LLC, which disclosed a stake in October.
Consolidation in the telecommunica-tions industry in Europe and the U.S. in 2013 gave a lift to dealmaking. It shows every sign of continuing this year judg-ing by activity this month. John Malone-controlled Liberty Media Inc. and Charter Communications Inc., in which Liberty has a big stake, kicked off 2014 with hefty new offers for Sirius XM Holdings Inc. (the remaining 47 percent for $10.6 billion) and Time Warner Cable Inc. ($61.3 billion) (page 16).
Signs, perhaps, that 2014 will deliver on the promise of a return of large-scale dealmaking.
— John E. Morris
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www.bloombergbriefs.com Bloomberg Brief | Mergers 2013 Year End Review 2
Dec. 9: Sysco Corp. agreed to acquire US Foods from its private-equity owners.
NOTABLe 2013 M&A eVeNTs
Aug. 25: Amgen Inc. agreed to buy Onyx Pharmaceuticals Inc. in a $10.4 billion deal.
Aug. 9: America Movil SAB said it planned to buy the rest of Royal KPN NV for $10 billion.
APR.
Jan. 14: Bloomberg News reported that Dell Inc. held buyout talks with private-equity firms.
May 10: Icahn and Southeastern Asset Management Inc. proposed an alternative deal for Dell shareholders that would let them keep their equity stakes.
May 6: BMC Software Inc. agreed to be taken private by Bain Capital LLC and Golden Gate Capital in a $6.9 billion deal.
May 20: Yahoo! Inc. said it would buy Tumblr Inc. for about $1.1 billion.
May 29: Shuanghui International Holdings Ltd. agreed to acquire Smithfield Foods Inc. in the biggest Chinese takeover deal of a U.S. company.
June 24: Vodafone Group Plc won a bidding contest for Kabel Deutschland Holding AG, paying $10.1 billion.
June 27: Bloomberg News reported John Malone was exploring ways Charter Communications Inc. could acquire Time Warner Cable Inc.
July 15: Loblaw Cos. said it would buy Shoppers Drug Mart Corp. for about $12 billion.
July 29: Perrigo Co. agreed to buy Elan Corp. for $8.6 billion.
July 31: Bill Ackman’s Pershing Square Capital Management LP amassed a 9.8 percent stake in Air Products & Chemicals Inc., Ackman said.
Aug. 13: Carl Icahn said he built up a stake in Apple Inc. and discussed his support for a larger stock buyback with its Chief Executive Officer Tim Cook.
Sept. 23: BlackBerry Ltd. received a tentative buyout offer from a group led by Fairfax Financial Holdings Ltd that was terminated two months later.
Sept. 30: Blackstone Group LP’s Steve Schwarzman said in an interview that his 1994 decision to sell what’s now BlackRock Inc. was a “heroic mistake.”
Oct. 9: Men’s Wearhouse Inc. rejected a takeover offer from Jos. A. Bank Clothiers Inc.
Oct. 16: America Movil withdrew its offer for Royal KPN and determined it couldn’t expand its stake to more than 50 percent.
Oct. 30: Dell’s buyout by Michael Dell and Silver Lake was completed.
Nov. 1: Bloomberg News reported AT&T Inc. executives were preparing for a potential takeover of Vodafone Group Plc in 2014.
Nov. 12: American Airlines and US Airways reached an agreement with the U.S. Justice Department over the government’s bid to block their merger.
Feb. 5: Dell said it planned to go private in a leveraged buyout led by Michael Dell and Silver Lake Management LLC.
Feb. 6: Liberty Global Inc. agreed to buy Virgin Media Inc.
Feb. 14: Berkshire Hathaway Inc. and 3G Capital agreed to buy HJ Heinz Co. for about $23 billion. The same day, AMR Corp and US Airways Inc. announced their merger.
March 19: John Malone’s Liberty Media Corp. said it would buy more than 25 percent stake in Charter Communications Inc.
March 25: Dell said it got competing buyout proposals from Blackstone Group LP and Carl Icahn.
April 12: Joh. A. Benckiser SE said it would buy coffee roaster D.E. Master Blenders 1753 NV for about $10 billion.
April 15: Thermo Fisher Scientific Inc. agreed to buy Life Technologies Corp. for $13.6 billion.
Jan. 31: The U.S. Justice Department filed an antitrust suit to block Anheuser-Busch InBev NV’s takeover of Grupo Modelo SAB. The buyer made concessions and the deal was completed in June.
JAN. FEB. MAR.
MAy JuN.
AuG.
Sept. 3: Microsoft Corp. said it would buy Nokia Oyj’s handset business for $7.2 billion.
SEP.
OCT. NOV. DEC.
JuLy
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www.bloombergbriefs.com Bloomberg Brief | Mergers 2013 Year End Review 3
0%
20%
40%
60%
80%
100%
2007 2008 2009 2010 2011 2012 2013
Middle East &Africa
LatAm &Caribbean
Europe
Asia Pacific
North America
Source: Bloomberg
Deal Volume by Region
0%
20%
40%
60%
80%
100%
2007 2008 2009 2010 2011 2012 2013
Utilities
Technology
Industrial
Financial/RE
Energy
Diversified
Consumer Noncycl
Consumer Cycl
Communications
Basic Materials
Source: Bloomberg
Deal Volume by Sector
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
2007 2008 2009 2010 2011 2012 2013Source: Bloomberg DMON
Billi
ons
Verizon Wireless deal contributed
$130B
The Pace of DealmakingGlobal mergers and acquisitions value climbed just four percent last year as a single transaction pushed total M&A value ahead of the 2012 pace: Vodafone Group Plc’s $130 billion sale of its stake in Verizon Wireless to Verizon Communications Inc.
Verizon’s mega-deal with Vodafone was the largest M&A transac-tion in a decade, accounting for more than 5 percent of last year’s aggregate transaction value. If it hadn’t been announced last year, total M&A would have matched the $2.2 trillion worth of deals from 2010, the first full year of economic recovery after the global recession in 2009.
Although dealmaking hasn’t approached its 2006-2007 peak, it has remained steady, averaging about $2.3 trillion a year since the end of the economic downturn, keeping it ahead of the M&A activity levels of the early 2000s.
The energy sector accounted for a smaller portion of global trans-actions than it has in the past three years. None of last year’s 10 largest M&A moves were energy deals.
Communications deals made up a much larger share of last year’s activity. Aside from Verizon’s giant purchase, Liberty Global Plc bought Virgin Media Inc. for $21.6 billion and adver-tising companies Omnicom Group Inc. and Publicis Groupe SA agreed to combine.
Financial acquirers, rather than strategic buyers, made two of the year’s 10 biggest deals. Berkshire Hathaway Inc. and 3G Capital bought HJ Heinz Co. for $27.4 billion, while Michael Dell and Silver Lake Management LLC completed a $16.4 billion take-private of Dell Inc.
For a third year North America was the dominant region for deals, accounting for more than 40 percent of global activity. Nearly ev-ery transaction of $10 billion or more included a North American participant.
Among the largest exceptions were a pair of European telecom trades: Spain’s Telefonica SA agreed to buy the E-Plus German wireless unit of the Netherlands’ Royal KPN NV in a $11.3 bil-lion deal and Vodafone bought German cable operator Kabel Deutschland Holding AG for $11.2 billion.
The sale of Vodafone’s stake in Verizon Wireless Pushed 2013’s Total Ahead of 2012
The YeAr AT A gLANCe BY WILL ROBINSON
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gLOBAL TOP 50 Click on for deal advisers
ANNOUNCeD TArgeT COUNTrY TArgeT INDUsTrY ACQUIrer COUNTrY VALUe ($M)
9/2/13 Verizon Wireless (45% Vodafone stake) US Telecommunications Verizon Communications Inc US 130,100 2/14/13 HJ Heinz Co US Food Berkshire Hathaway, 3G Capital Multi 27,403 7/12/13 Caisse des Depots, Republic of France units FR Finance Bpifrance FR 23,406 2/5/13 Virgin Media Inc US Telecommunications Liberty Global PLC GB 21,627 7/28/13 Omnicom Group Inc US Advertising Publicis Groupe SA FR 19,420 2/12/13 NBCUniversal LLC US Media Comcast Corp US 16,700 2/5/13 Dell Inc US Computers MSD Capital LP, Silver Lake Mgmt US 16,436 4/15/13 Life Technologies Corp US Healthcare-Products Thermo Fisher Scientific Inc US 15,901 10/2/13 Portugal Telecom SGPS SA PT Telecommunications Oi SA BR 14,297 7/15/13 Shoppers Drug Mart Corp CA Retail Loblaw Cos Ltd CA 13,007 4/16/13 National Bank of Greece SA GR Banks Hellenic Financial Stability Fund GR 12,853 7/23/13 E-Plus Mobilfunk GmbH & Co KG DE Telecommunications Telefonica Deutschland Holding AG DE 11,296 6/24/13 Kabel Deutschland Holding AG DE Media Vodafone Group PLC GB 11,186 4/23/13 Piraeus Bank SA GR Banks Hellenic Financial Stability Fund GR 10,967 1/18/13 Orascom Construction Industries EG Engineering OCI NL 10,488 5/29/13 NV Energy Inc US Electric Berkshire Hathaway Inc US 10,366 10/23/13 Cole Real Estate Investment Inc US REITS American Realty Capital Properties Inc US 9,846 6/14/13 Taikang Asset Management Co Ltd CH Finance PetroChina Co Ltd CN 9,787 4/12/13 DE Master Blenders 1753 NV NL Beverages Joh A Benckiser SE AT 9,615 4/27/13 Former Fortis structured credit assets BE Finance Credit Suisse, Lone Star Funds Multi 8,723 5/27/13 Bausch & Lomb Inc US Healthcare-Products Valeant Pharmaceuticals Int'l Inc US 8,700 6/30/13 Onyx Pharmaceuticals Inc US Pharmaceuticals Amgen Inc US 8,531 12/9/13 US Foods Inc US Food Sysco Corp US 8,374 11/22/13 Galeao airport concession BR Infrastructure Odebrecht SA, Changi Airport Group etc BR 8,308 5/20/13 Warner Chilcott PLC IE Pharmaceuticals Actavis plc US 7,809 6/11/13 Eurobank Ergasias SA GR Banks Hellenic Financial Stability Fund GR 7,753 7/30/13 Health Management Associates Inc US Healthcare-Services Community Health Systems Inc US 7,527 6/3/13 Dubai Aluminium Co Ltd AE Metal Fabricate Emirates Aluminium Co Ltd AE 7,500 5/31/13 SM Land Inc PH Real Estate SM Prime Holdings Inc PH 7,330 9/3/13 Nokia's Devices & Services business FI Technology Microsoft Corp US 7,165 5/29/13 Smithfield Foods Inc US Food Shuanghui International Holdings Ltd HK 6,955 11/5/13 Maroc Telecom MA Telecommunications Emirates Telecommunications Corp AE 6,810 9/24/13 Tokyo Electron Ltd JP Semiconductors Applied Materials Inc US 6,794 5/6/13 BMC Software Inc US Software GIC Special Investments et al Multi 6,736 9/9/13 Molex Inc US Electrical Equip Koch Industries Inc US 6,528 12/9/13 BRE Properties Inc US REITS Essex Property Trust Inc US 6,334 7/29/13 Elan Corp PLC IE Pharmaceuticals Perrigo Co Plc US 6,199 9/9/13 Neiman Marcus Group LLC/The US Retail Canada Pension Plan Inv Bd, Ares Mgmt Multi 6,000 11/20/13 Eagle Ford assets US Energy Devon Energy Corp US 6,000 5/9/13 Alpha Bank AE GR Banks Hellenic Financial Stability Fund GR 5,994 7/26/13 Activision Blizzard Inc US Software Activision Blizzard Inc US 5,830 6/12/13 Canada Safeway Ltd CA Food Empire Co Ltd CA 5,694 10/10/13 PVR Partners LP US Pipelines Regency Energy Partners LP US 5,629 12/16/13 LSI Corp US Semiconductors Avago Technologies Ltd SG 5,596 7/2/13 Bank of Ayudhya PCL TH Banks Mitsubishi UFJ Financial Group Inc JP 5,505 7/2/13 Kashagan caspian oil project (8.4%) KZ Energy KazMunayGas National Co JSC KZ 5,400 4/12/13 Port Kembla, Port Botany AU Infrastructure Hesta AG, Industry Funds Mgmt Pty Ltd et al AU 5,325 12/16/13 International Lease Finance Corp US Finance AerCap Holdings NV NL 5,088 2/1/13 SNS REAAL NV NL Banks Kingdom of the Netherlands NL 5,058 9/30/13 Brookfield Office Properties Inc US Real Estate Brookfield Property Partners LP US 5,037
Source: Bloomberg
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0x 2x 4x 6x 8x 10x 12x 14x 16x 18x 20x 22x
Revenue
Book value
Ebitda
Freecashflow
Net Income
Source: Bloomberg
2012 2013
2011
Valuations Rebounded After a Dip in 2012
-200%
0%
200%
400%
600%
800%$0-$50M$50M-$500M$500M-$5B>$5B
Source: Bloomberg
Rebased to Q1 2002
Change in number of deals:
Large-But-Not-Mega Deals Increased
0
10
20
30
40
50
$0
$250
$500
$750
$1,000
$1,250
$1,500>$5B$500M-$5B$50M-$500M$0-$50MDeals > $5B (right)
Source: Bloomberg
Billi
ons
Deal volume (left):
Source: Bloomberg
Billi
ons
Deal volume (left):
A Rise in Mega Deals Wasn’t SustainedThe number of deals worth more than $5 billion spiked during the second-quarter of last year to the highest in more than two years. Life Technologies Corp.’s $15.9 billion sale to Thermo Fisher Scientific Inc., Kabel Deutschland AG’s takeover and Berkshire Hathaway Inc.’s $10.4 billion purchase of NV Energy Inc. were among the large M&A deals announced between April and June.
The number of very large deals tapered off in the second half of the year.
Transactions between $500 million and $5 billion rose steadily as 2013 progressed. December alone featured 80 deals in that size range, versus just 60 in January.
The prices paid by buyers as measured by five key valuation multiples rebounded last year from a dip in 2012. Three of the five metrics — average multiples of net income, free cashflow and book value — were higher than they were in 2011 as well. Aver-age Ebitda and revenue multiples rose but didn’t match the level of two years earlier.
Analysis of Deal size Distributions, Valuation Multiples and Market reactions
BehIND The heADLINes BY JOhN E. MORRIS, WILL ROBINSON aNd aLIcIa LOONEY
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www.bloombergbriefs.com Bloomberg Brief | Mergers 2013 Year End Review 6
The Deals That Weren’t: Largest Deals Terminated Last year
-12
-10
-8
-6
-4
-2
0
2
4
6
North America ex Mexico
Europe
Source: Bloomberg MA
% c
hang
e on
ann
ounc
emen
t
Investors Continue to Reward AcquirersAcquirers benefitted, on average, when they announced deals, continuing a trend of the past two years. Sysco Corp. climbed 10 percent after it announced an $8.4 billion deal to buy uS Foods from private-equity firms KKR & Co. and Clayton, Dubil-ier & Rice LLC in September. After disclosing plans to purchase Virgin Media Inc., Liberty Global Plc rose more than 30 percent during the remainder of last year.
On average, North American companies that announced acquisi-tions saw their shares gain 2.8 percent in 2013 versus 2.7 percent the year before, according to data compiled by Bloomberg. In Europe last year the average gain after an announcement was 2.5 percent, up from 1.5 percent in 2012. The figures are based on acquirers with market capitalizations over $500 million.
Behind the headlines: analysis
ANNOUNCeD TerMINATeD TArgeT COUNTrY INDUsTrY ACQUIrer VALUe ($M)
4/15/13 6/18/13 Sprint US Telecommunications DISH Network 37,723
8/9/13 10/16/13 Royal KPN NL Telecommunications America Movil 22,695
3/25/13 4/19/13 Dell US Computers Blackstone Group et al 21,228
4/2/12 5/14/12 Avon US Cosmetics/Personal Care Joh A Benckiser 12,854
11/15/12 1/21/13 Fraser and Neave SG Beverages OUE, Orange Circle Investments 12,685
3/25/13 9/9/13 Dell US Computers Icahn Enterprises 10,380
3/20/13 4/11/13 Cole REIT US REITS American Realty Capital Properties 9,822
1/8/13 6/26/13 Clearwire US Telecommunications DISH Network 9,507
2/25/13 6/18/13 Elan IE Pharmaceuticals Royalty Pharma 7,777
8/6/12 3/1/13 Best Buy US Retail Richard Schulze 7,594
5/10/13 7/22/13 China Resources Gas HK Gas China Resources Power 7,065
Source: Bloomberg MA Deals announced in 2012 or 2013 and terminated in 2013
who’s buying who?
companies driving m&a in 2014: ma <g
o>
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www.bloombergbriefs.com Bloomberg Brief | Mergers 2013 Year End Review 7
$0
$200
$400
$600
$800
$1,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Middle-East & Africa Latin America
Asia Pacific Europe
North America
Source: Bloomberg
The IPO Market Offered an Alternative to M&A
0%
5%
10%
15%
20%
25%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
High Grade
High Yield
Source: Bank of America Merrill Lynch
Interest Rates Remained Low
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
2008 2009 2010 2011 2012 2013
S&P500 FTSE100
DAX HK Hang Seng
Source: Bloomberg
Change since Jan. 2008:
Stocks RoseU.S. and European stocks gained last year. The Standard & Poor’s 500 index climbed 30 percent last year. Germany’s DAX Index, an equity benchmark for Europe’s largest economy, rose about 25 percent.
Buyers also benefitted from cheap borrowing costs and plentiful credit.
HJ Heinz Co. obtained $14.1 billion in financing from JPMorgan Chase & Co. and Wells Fargo & Co. in February to support its buyout — the biggest financing to fund an acquisition since 2007.
Then Verizon Communications Inc. sold $49 billion of debt Sept. 11 in the biggest corporate bond deal ever to help it fund the buyout of Vodafone Group Plc’s Verizon Wireless stake.
Initial public offerings picked up in 2013 as M&A activity remained somewhat constant. The number of deals increased almost five percent from 2012 and aggregate value was the highest in three years. That provided exit routes for private-equity, venture-backed and other privately held companies that in other circumstances might have been sold.
Blackstone Group LP took Hilton Worldwide Holdings Inc. public in December, six years after acquiring it for $26 billion at the end of the buyout boom.
heady stock Markets, Cheap Debt, Mountain of Cash Didn’t Produce expected surge in M&A
MArKeT DrIVers cOMpILEd BY JOhN E. MORRIS, WILL ROBINSON, aNthONY FaSaNELLa aNd aLIcIa LOONEY
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www.bloombergbriefs.com Bloomberg Brief | Mergers 2013 Year End Review 8
$0$500
$1,000$1,500$2,000$2,500$3,000$3,500$4,000$4,500
Source: Bloomberg Cash and cash equivalents at U.S. companies at quarter ended.
Billi
ons
Source: Bloomberg
Billi
ons
+18% +6% +13%
Corporations Continued to Stockpile CashContinuing a trend that has held steady since the financial crisis, corporations accumulated more cash on their balance sheets that could, in theory, be used for acquisitions. American compa-nies reported $4.2 trillion of cash and cash equivalents on their books at the end of the third quarter, according to data compiled by Bloomberg. That was up 18 percent from a year earlier, and 40 percent higher than the total reported in September 2010.
0%
10%
20%
30%
40%
50%
60%
70%
80%
Proportion of all-cash deals
Source: Bloomberg MA
The Portion of All-Cash Deals Remained HighThe portion of deals paid for entirely in cash fell to 60.3 percent last year from a high of 66.3 percent in 2012. Still, that figure was high by historical standards. All-cash acquisitions peaked in the third and fourth quarters of 2012, when they accounted for more than 70 percent of all deals.
Market driVers
ma su<go>: top m&a buyers in europe: ma <
go
>
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15%
5%
4%
4%
3% 69%
Cellular telecom
Real estate
Computers
Oil E&P
Food
Other
Source: Bloomberg MA
NOrTh AMerICA
Telecoms, Media and Tech sectors Yielded the Biggest Deals
TArgeT ACQUIrer seLLer DeAL VALUe ($ MLN) PAYMeNT TYPe DeAL sTATUs
Verizon Wireless (Vodafone stake) Verizon Communications Inc Vodafone Group PLC 130,100 Cash, Stock & Debt Pending
HJ Heinz Co Berkshire Hathaway Inc, 3G Capital Inc - 27,403 Cash Complete
Omnicom Group Inc Publicis Groupe SA - 19,420 Stock Pending
NBCUniversal LLC Comcast Corp General Electric Co 16,700 Cash and Stock Complete
Dell Inc Michael Dell, Silver Lake Management LLC - 16,436 Cash Complete
Life Technologies Corp Thermo Fisher Scientific Inc - 15,901 Cash Pending
Shoppers Drug Mart Corp Loblaw Cos Ltd - 13,007 Cash or Stock Pending
NV Energy Inc Berkshire Hathaway Inc - 10,366 Cash Complete
Cole Real Estate Investment Inc American Realty Capital Properties Inc - 9,846 Cash or Stock Pending
Bausch & Lomb Inc Valeant Pharmaceuticals International Inc Warburg Pincus LLC et al 8,700 Cash CompleteSource: Bloomberg
Top Financial Advisers Top Legal Advisers
ADVIser rANK shAre (%)
TOTAL DeALs
($ MLN)
AVe DeAL
($ MLN)
DeAL COUNT
BofA Merrill Lynch 1 33.5 352,455 3,119 113
Goldman Sachs & Co 2 32.3 339,737 2,084 163
JP Morgan 3 31.6 331,956 2,573 129
Morgan Stanley 4 27.3 286,629 2,239 128
Barclays 5 25.1 264,245 2,565 103
UBS 6 18.8 197,803 3,470 57
Guggenheim Capital LLC 7 12.6 132,825 66,413 2
PJT Capital LLC 8 12.4 130,100 130,100 1
Citi 9 12.3 128,828 1,516 85
Deutsche Bank AG 10 11.2 118,130 2,188 54
Source: Bloomberg
ADVIser rANK shAre (%)
TOTAL DeALs
($ MLN)
AVe DeAL
($ MLN)
DeAL COUNT
Wachtell Lipton Rosen & 1 28.0 294,402 4,600 64
Davis Polk & Wardwell 2 24.2 254,081 3,970 64
Simpson Thacher & Bartlett 3 24.0 252,760 2,319 109
Weil Gotshal & Manges LLP 4 22.5 236,973 2,418 98
Jones Day 5 18.0 189,401 799 237
Slaughter and May 6 17.6 185,338 26,477 7
Osler Hoskin & Harcourt LLP 7 17.0 178,944 1,924 93
Debevoise & Plimpton LLP 8 16.8 176,423 5,041 35
Latham & Watkins LLP 9 16.4 172,731 919 188
Hogan Lovells 10 16.1 168,743 3,245 52
Source: Bloomberg
0
5,000
10,000
15,000
$0
$500
$1,000
$1,500
$2,000 ← Value Deal count →
Source: Bloomberg
Billi
ons
Top 10 Deals
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www.bloombergbriefs.com Bloomberg Brief | Mergers 2013 Year End Review 10
8%
5%
5%
4%
3%
74%
Commercial banks
Telecoms
Real estate operations
Telephone - integrated
Finance - commercial
Other
Source: Bloomberg MA
eUrOPe, MIDDLe eAsT AND AFrICA
Bailouts, government Divestitures Topped even Biggest Telecoms Deals
TArgeT ACQUIrer seLLer DeAL VALUe ($ MLN)
PAYMeNT TYPe DeAL sTATUs
Investment operations Bpifrance (new entity) Caisse des Depots, Republic of France 23,406 Cash Complete
Virgin Media Inc Liberty Global PLC - 21,627 Cash and Stock Complete
Portugal Telecom SGPS SA Oi SA - 14,297 Stock Pending
National Bank of Greece SA Hellenic Financial Stability Fund - 12,853 Cash Complete
E-Plus Mobilfunk GmbH & Co KG Telefonica Deutschland Holding AG Koninklijke KPN NV 11,296 Cash and Stock Pending
Kabel Deutschland Holding AG Vodafone Group PLC - 11,186 Cash Complete
Piraeus Bank SA Hellenic Financial Stability Fund - 10,967 Cash Complete
Orascom Construction Industries OCI - 10,488 Cash or Stock Pending
DE Master Blenders 1753 NV Joh A Benckiser SE - 9,615 Cash Pending
RPI portfolio asset Credit Suisse Group, Lone Star Funds Royal Park Investments SA 8,723 Cash PendingSource: Bloomberg
Top Financial Advisers Top Legal Advisers
ADVIser rANK shAre (%)
TOTAL DeALs
($ MLN)
AVe DeAL
($ MLN)
DeAL COUNT
Goldman Sachs & Co 1 26.4 179,334 1,793 100
Morgan Stanley 2 22.7 154,596 1,982 78
JP Morgan 3 18.1 122,809 1,949 63
BNP Paribas Group 4 14.6 99,196 1,210 82
Barclays 5 13.9 94,423 1,475 64
Deutsche Bank AG 6 12.6 85,780 1,384 62
Citi 7 12.6 85,686 1,260 68
BofA Merrill Lynch 8 11.9 80,819 1,443 56
Lazard Ltd 9 11.7 79,453 946 84
Credit Suisse 10 10.3 70,371 1,257 56
Source: Bloomberg
ADVIser rANK shAre (%)
TOTAL DeALs
($ MLN)
AVe DeAL
($ MLN)
DeAL COUNT
Linklaters LLP 1 14.8 99,323 588 169
Allen & Overy LLP 2 13.1 87,877 486 181
Freshfields Bruckhaus Deringer 3 12.1 81,241 454 179
Shearman & Sterling LLP 4 6.6 44,429 1,111 40
White & Case LLP 5 6.0 40,381 439 92
Bredin Prat 6 5.8 38,810 1,848 21
De Brauw Blackstone Westbroek 7 5.5 37,216 1,201 31
Clifford Chance LLP 8 5.4 36,309 288 126
Skadden Arps 9 5.2 35,076 1,032 34
Hengeler Mueller 10 5.2 35,053 1,252 28
Source: Bloomberg
0
2,000
4,000
6,000
8,000
10,000
12,000
$0
$300
$600
$900
$1,200
$1,500
$1,800 ← Value Deal count →
Source: Bloomberg
Billi
ons
Top 10 Deals
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
www.bloombergbriefs.com Bloomberg Brief | Mergers 2013 Year End Review 11
11%
4% 3%
3%
3%
76%
Real estate operations
Commercial banks
Buildings
Investment cos.
Real estate mgmt
Other
Source: Bloomberg MA
AsIA PACIFIC
Consolidation in Property, energy and Financial sectors Pushed Up Volume Modestly
TArgeT ACQUIrer seLLer DeAL VALUe ($ MLN)
PAYMeNT TYPe DeAL sTATUs
Taikang Asset Management Co Ltd PetroChina Co Ltd - 9,787 Cash Pending
SM Land Inc SM Prime Holdings Inc - 7,330 Stock Pending
Tokyo Electron Ltd Applied Materials Inc - 6,794 Stock Pending
Bank of Ayudhya PCL Mitsubishi UFJ Financial Group Inc - 5,505 Cash Complete
Kashagan caspian oil project KazMunayGas National Co JSC ConocoPhillips 5,400 Cash Complete
Port Kembla, Port Botany Australia Hesta AG, Industry Funds Mgmt Pty et al - 5,325 Cash Complete
Kashagan caspian oil project China National Petroleum Corp KazMunayGas National Co 5,000 Cash Pending
GD Midea Holding Co Ltd Midea Group Co Ltd - 4,924 Stock Complete
Beijing Xinwei Telecom Technology Co Beijing Zhongchuang Telecom Test Co - 4,393 Stock Pending
Siam Makro PCL CP ALL PCL SHV Holdings NV 4,083 Cash CompleteSource: Bloomberg
Top Financial Advisers Top Legal Advisers
ADVIser rANK shAre (%)
TOTAL DeALs
($ MLN)
AVe DeAL
($ MLN)
DeAL COUNT
Morgan Stanley 1 8.3 41,767 597 70
UBS 2 7.6 38,298 766 50
Goldman Sachs & Co 3 7.3 36,524 529 69
JP Morgan 4 6.1 30,712 749 41
Macquarie Group Ltd 5 4.9 24,734 538 46
BofA Merrill Lynch 6 4.5 22,802 671 34
Barclays 7 4.3 21,715 987 22
HSBC Bank PLC 8 4.2 21,178 784 27
Nomura Holdings Inc 9 3.5 17,611 210 84
CITIC Securities Co Ltd 10 3.4 17,243 663 26
Source: Bloomberg
ADVIser rANK shAre (%)
TOTAL DeALs ($ MLN)
AVe DeAL
($ MLN)
DeAL COUNT
Nishimura & Asahi 1 5.8 29,193 343 85
Baker & McKenzie 2 5.1 25,515 287 89
Herbert Smith Freehills 3 5.0 25,091 358 70
King & Wood Mallesons 4 4.5 22,708 307 74
Mori Hamada & Matsumoto 5 4.3 21,897 153 143
Linklaters LLP 6 3.7 18,782 606 31
Allen & Overy LLP 7 3.7 18,514 343 54
Freshfields Bruckhaus Deringer 8 3.1 15,827 396 40
Allens 9 3.1 15,551 311 50
Kim & Chang 10 2.8 14,377 158 91
Source: Bloomberg
0
2,000
4,000
6,000
8,000
10,000
12,000
$0
$100
$200
$300
$400
$500
$600 ← Value Deal count →
Source: Bloomberg
Billi
ons
Top 10 Deals
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
www.bloombergbriefs.com Bloomberg Brief | Mergers 2013 Year End Review 12
9%
7%
7%
7%
4% 67%
Airport development
Oil E&P
Investment cos.
Buildings
Schools
Other
Source: Bloomberg MA
LATIN AMerICA & CArIBBeAN
Deal Volumes slid for Third straight Year
TArgeT ACQUIrer seLLer DeAL VALUe ($ MLN)
PAYMeNT TYPe DeAL sTATUs
Galeao airport concession Odebrecht SA, Changi Airport Group etc Republic of Brazil 8,308 Cash Pending
LNG Portfolio Royal Dutch Shell PLC Repsol SA 4,100 Cash Complete
Zenda & Seara Brasil assets JBS SA Marfrig Alimentos SA 2,726 Undisclosed Complete
Anhanguera Educacional Participacoes SA Kroton Educacional SA - 2,703 Stock Pending
Petrobras Energia Peru SA China National Petroleum Corp Petroleo Brasileiro SA 2,600 Undisclosed Pending
MMX Porto Sudeste Ltda Mubadala Development Co PJSC et al MMX Mineracao e Metalicos SA 2,246 Cash Pending
HSBC Panama Unit Bancolombia SA HSBC Holdings PLC 2,234 Cash Complete
Vale SA Cemig Geracao e Transmissao SA - 1,896 Undisclosed Pending
Spaipa S/A Industria Brasileira de Bebidas Coca-Cola Femsa SAB de CV - 1,855 Cash Complete
Diagnosticos da America SA Cromossomo Participacoes II SA - 1,855 Cash PendingSource: Bloomberg
Top Financial Advisers Top Legal Advisers
ADVIser rANK shAre (%)
TOTAL DeALs
($ MLN)
AVe DeAL
($ MLN)
DeAL COUNT
Credit Suisse 1 25.7 26,158 747 35
Banco BTG Pactual SA 2 18.4 18,745 329 57
Goldman Sachs & Co 3 16.4 16,692 879 19
Bradesco BBI SA 4 15.4 15,657 626 25
Banco Itau BBA SA 5 14.4 14,624 348 42
Citi 6 8.8 8,971 528 17
Morgan Stanley 7 8.2 8,306 519 16
Banco Santander SA 8 7.3 7,450 497 15
Deutsche Bank AG 9 6.8 6,921 769 9
BofA Merrill Lynch 10 6.7 6,847 527 13
Source: Bloomberg
ADVIser rANK shAre (%)
TOTAL DeALs
($ MLN)
AVe DeAL
($ MLN)
DeAL COUNT
Souza Cescon Barrieu 1 17.2 17,520 531 33
Mattos Filho Veiga 2 9.8 10,020 244 41
Barbosa Mussnich 3 8.8 8,982 249 36
Linklaters LLP 4 8.0 8,127 903 9
Davis Polk & Wardwell 5 7.1 7,223 722 10
Pinheiro Neto Advogados 6 6.5 6,670 202 33
Lefosse Advogados 7 6.2 6,311 316 20
Sullivan & Cromwell 8 5.6 5,718 953 6
Skadden Arps 9 4.9 5,036 1,007 5
Stocche Forbes Padis 10 4.8 4,868 152 32
Source: Bloomberg
0
250
500
750
1,000
1,250
$0
$50
$100
$150
$200
$250 ← Value Deal count →
Source: Bloomberg
Billi
ons
Top 10 Deals
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
www.bloombergbriefs.com Bloomberg Brief | Mergers 2013 Year End Review 13
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
2009 2010 2011 2012 2013
Dividend payout
LBO
Source: Bloomberg
Billi
ons
Use of proceeds: 47% of total
Junk Debt Funded Dividends As Well As LBOs
0
150
300
450
600
750
900
$0
$50
$100
$150
$200
$250
$300
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
← Value
Exits →
Billi
ons Deals
Source: Bloomberg
Exits Via Sales Were Down
0
4
8
12
16
20
24
28
$0
$100
$200
$300
$400
$500
$600
$700
← Value - all deals
No. of deals >$5B →
Billi
ons Deals
Source: Bloomberg
Investments Continued at a Steady PacePrivate equity investment levels rose 18 percent last year from 2012, to $238 billion, their highest level since 2007, according to data compiled by Bloomberg. Still, deal volume was behind 2005 and just 36 percent of its 2007 peak.
One encouraging sign: Six deals worth more than $5 billion were announced last year, double the figures in 2011 and 2012. The list was led by the $27.4 billion purchase by Berkshire Hatha-way Inc. and 3G Capital Inc. of ketchup maker HJ Heinz Co.; the $16.4 billion take-private of computer maker Dell Inc. by its founder Michael Dell and Silver Lake Management LLC; and the $9.6 billion buyout of coffee blender D.E. Master Blenders 1753 NV by the German investment firm Joh A Benckiser S.E.
The value of private-equity-backed companies sold slid 26.5 percent last year after a 19 percent drop the year before. Instead, sponsors turned to refinancings (see next chart) or to initial public offerings (see next page) to realize profits.
Junk bond issuance in the U.S. hit a new high as yields fell to an all-time low (see chart on page 6).
While credit was readily available, nearly half of the leveraged finance obtained last year financed dividend payouts, not new acquisitions, according to data compiled by Bloomberg. Nearly $79 billion of new debt was used for dividends, or 47 percent of the total, the same percentage as in 2012. In 2009, the bottom of the market, only 13 percent went to payouts.
Private equity Firms Were slow to Invest and resorted to refinancings, IPOs to Cash Out
PrIVATe eQUITY cOMpILEd BY JOhN E. MORRIS
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
www.bloombergbriefs.com Bloomberg Brief | Mergers 2013 Year End Review 14
PrICeD IssUer NAMe COUNTrY BACKers OFFer sIze (M)
10/15/13 Plains GP US Occidental Petroleum Corp, Energy & Minerals Group 2,912
12/11/13 Hilton Worldwide US Blackstone 2,706
10/9/13 Antero Resources US Antero Resources, Yorktown Partners, Warburg Pincus, Trilantic Capital Partners et al 1,802
11/8/13 Merlin Entertainments UK Kirkbi A/S, Blackstone, CVC Capital Partners 1,700
1/31/13 LEG Immobilien Germany Perry Capital, Whitehall Funds 1,527
6/12/13 Coty US JAB Holdings, Berkshire Partners, Rhone Capital 1,140
6/19/13 bpost Belgium CVC Capital Partners 1,120
8/13/13 Envision Healthcare US Clayton Dubilier & Rice 1,111
6/26/13 HD Supply US Carlyle, Bain Capital, Clayton Dubilier, THD Holdings et al 1,101
5/8/13 Quintiles Transnational US TPG Capital, Bain Capital, 3i Group, Aisling Capital, Temasek 1,089
Source: Bloomberg Does not include IPOs by venture-backed companies.
Selling Shares Rather Than Companies: Largest IPOs of Private-Equity-Backed Companies in 2013
PriVate equity
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www.bloombergbriefs.com Bloomberg Brief | Mergers 2013 Year End Review 15
One man has had a leading role in more mergers, attempted and complete, over the past year than any other: John Malone. Through his controlling stakes in two cable operators, Liberty Media Inc. and Lib-erty Global Plc, he has pressed the case for consolidation in the telecommunica-tions sector on both sides of the Atlantic. Since January 2013, his companies have spawned full takeover attempts for five telecommunications companies in the U.S., Britain, Germany and the Netherlands, and
took a substantial stake in a sixth — deals that, if completed, would be worth about $128 billion.
In Germany, after acquiring Kabel Baden-Wuerttemberg GmbH in 2011, Liberty Global took a run last year at Kabel Deutschland AG before Vodafone Group Plc outbid it with a $13.6 billion offer.
Frustrated in Germany, Malone turned his sights back to the Netherlands, build-ing up a position in Ziggo NV and now negotiating for a full takeover.
Back home in the U.S., he bought control of satellite radio operator Sirius XM Holdings Inc. in January 2013 and this month offered to buy the rest. Meanwhile, he is using cable operator Charter Communications Inc., in which he first invested last May, as a vehicle to launch an unsolicited $61.3 billion bid for the much larger Time Warner Cable Inc. this month.
— John E. Morris and Will Robinson
The Cable Industry Veteran Aims to reshape the sector on Two Continents
JOhN MALONe’s BUsY YeAr
JOHN MALONE
Gained control in Jan. 2013. Offered this month to buy remaining 47% for about $10.6B.
Purchased 27% stake from Apollo Global consortium in May for $2.6B.
Closed $21.6B takeover in June.
Bought initial 12.6% stake in March, then raised in stages. Talks for full takeover revived in December.
Discovery discussed bid for Scripps in November
Disclosed unsolicited $61.3B offer on Jan. 13, 2014
Lost out to Vodafone in bid-ding war. Final price: $13.6B.
Competition clearance for 2011 deal reversed by German court in August.
LibErty MEdiA COrp
Malone owns: 94.6% (class B)
disCOvEry COMMuNiCAtiONs iNC.93.1% (class B)
sirius XM HOLdiNgs iNC.
Liberty Media: 53.0%
CHArtEr COMMuNiCAtiONs iNC.
25.8%
ZiggO Nv
28.5%
sCripps NEtwOrk iNtErACtivE iNC.
virgiN MEdiA iNC.
Liberty Global: 100.0%
tiME wArNEr CAbLE iNC.
kAbEL dEutsCH-LANd HOLdiNg Ag
kAbEL bAdEN- wuErttEMbErg gMbH
LibErty gLObAL pLC 85.3% (class B)
Key:AcquisitionTarget
Source: Bloomberg News, Bloomberg MA
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
www.bloombergbriefs.com Bloomberg Brief | Mergers 2013 Year End Review 16
DeALMAKer PrOFILes BY WILL ROBINSON
Blair EffronCenterview Partners LLCPartner and Co-founder Effron counseled global food products manufacturer HJ Heinz Co. on its $27.4 billion buyout by Warren Buffett’s Berkshire Hathaway Inc. and Jorge Paulo Lemann’s 3G Capital. The deal was announced in February and complet-ed in June. Effron also advised General Electric Co. on its $16.7 billion sale of its NBC Universal stake to Comcast Corp., which closed in March.
George LeeGoldman Sachs Group Inc. Chairman of the global technology, media and telecom group and chief information officer for the investment bank-ing divisionLee, who was the head of the TMT group last year, was named that unit’s chairman in January, as well as CIO for the investment bank. He worked with Dell Inc. on its leveraged buyout and helped Microsoft Corp. reach a deal in September to buy Nokia Oyj’s mobile-devices unit for $5.4 billion.
Jimmy LeeJPMorgan Chase & Co.Vice Chairman Lee worked with General Electric Co. as it sold the remainder of its NBC Universal stake to Comcast Corp. for $16.7 billion, and he advised the Dell board on its $16.4 billion buyout by Michael Dell and Silver Lake Manage-ment LLC. He also worked on Twitter Inc.’s initial public offering, which was announced in September and priced in November.
Ken MoelisMoelis & Co.Co-founder and CEOThe boutique banker worked with the HJ Heinz board committee on the ketchup maker’s $27.4 billion sale. He also advised Omnicom Group Inc. on its merger with Publicis Groupe SA. His firm is exploring an initial public of-fering, people with knowledge told Bloomberg News this month.
Paul TaubmanPJT Capital LLCPrincipalTaubman, a former Morgan Stanley banker who left the company in 2013, won a role as an independent adviser on the year’s largest M&A transaction, helping Verizon Communications Inc. on its its $130 billion purchase of Voda-fone Group Plc’s stake in their wireless joint venture. Taubman began PJT Capital LLC last year as part of his role as an individual adviser on Verizon’s deal with Vodafone.
Chris VentrescaJPMorgan Chase & Co.Global co-head of M&AVentresca advised Verizon Communications on deal with Vodafone and worked with Virgin Media Inc. on its $22 billion sale to Liberty Global Plc. JPMorgan named him co-head of global M&A in May along with Hernan Cris-terna. Ventresca previously ran North American M&A.
Antonio WeissLazard Ltd.Global head of investment bankingWeiss helped Berkshire Hathaway and 3G Capital secure their purchase of HJ Heinz. He also worked with D.E. Master Blenders 1753 NV on its $9.6 billion sale to Joh. A Benckiser SE, the investment arm of the billionaire Reimann family.
The Advisers Behind some of the Past Year’s Biggest Deals
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
www.bloombergbriefs.com Bloomberg Brief | Mergers 2013 Year End Review 17