3. www.bloombergbriefs.com
Bloomberg Brief | Mergers 2013 Year End Review
3
Notable 2013 M&A Events
Feb. 5: Dell said it
planned to go private
in a leveraged buyout
led by Michael Dell
Feb. 6: Liberty Global
and Silver Lake
Inc. agreed to buy
Management LLC.
Virgin Media Inc.
Jan. 14: Bloomberg
News reported that
Dell Inc. held buyout
talks with privateequity firms.
Jan.
Mar.
Feb.
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.
April 12: Joh. A. Benckiser
SE said it would buy coffee
roaster D.E. Master Blenders
1753 NV for about $10 billion.
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.
April 15: Thermo Fisher
Scientific Inc. agreed to buy
Life Technologies Corp. for
$13.6 billion.
July 15: Loblaw
Cos. said it would
buy Shoppers
Drug Mart Corp. for
about $12 billion.
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 29: Shuanghui
International Holdings Ltd.
agreed to acquire Smithfield
Foods Inc. in the biggest
Chinese takeover deal of a U.S.
company.
July 31: Bill Ackman’s Pershing
Square Capital Management
LP amassed a 9.8 percent
stake in Air Products &
Chemicals Inc., Ackman said.
Aug. 9: America Movil
SAB said it planned to
buy the rest of Royal
KPN NV for $10 billion.
Oct. 9: Men’s
Wearhouse Inc.
rejected a takeover
offer from Jos. A. Bank
Clothiers Inc.
Sept. 3: Microsoft
Corp. said it would buy
Nokia Oyj’s handset
business for $7.2 billion.
SEP.
NOV.
Oct. 16: America Movil withdrew its
offer for Royal KPN and determined
it couldn’t expand its stake to more
than 50 percent.
Aug. 25: Amgen Inc.
agreed to buy Onyx
Pharmaceuticals Inc. in
a $10.4 billion deal.
Nov. 1: Bloomberg News reported
AT&T Inc. executives were
preparing for a potential takeover
of Vodafone Group Plc in 2014.
Oct. 30: Dell’s
buyout by Michael
Dell and Silver Lake
was completed.
OCt.
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.”
June 27: Bloomberg News
reported John Malone was
exploring ways Charter
Communications Inc.
could acquire Time Warner
Cable Inc.
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.
Aug.
Sept. 23: BlackBerry Ltd.
received a tentative buyout
offer from a group led by
Fairfax Financial Holdings
Ltd that was terminated two
months later.
June 24: Vodafone
Group Plc won a
bidding contest for
Kabel Deutschland
Holding AG, paying
$10.1 billion.
Jun.
July 29: Perrigo Co.
agreed to buy Elan
Corp. for $8.6 billion.
July
March 25: Dell said it got competing
buyout proposals from Blackstone
Group LP and Carl Icahn.
May 20: Yahoo!
Inc. said it would
buy Tumblr
Inc. for about
$1.1 billion.
May 10: Icahn and Southeastern Asset
Management Inc. proposed an alternative
deal for Dell shareholders that would let
them keep their equity stakes.
May
Apr.
March 19: John
Malone’s Liberty Media
Corp. said it would buy
more than 25 percent
stake in Charter
Communications Inc.
Dec.
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.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Dec. 9: Sysco Corp.
agreed to acquire US
Foods from its privateequity owners.
4. www.bloombergbriefs.com
Bloomberg Brief | Mergers 2013 Year End Review
The YEar AT A GLANCE
4
BY WILL ROBINSON
The Sale of Vodafone’s Stake in Verizon Wireless Pushed 2013’s Total Ahead of 2012
The Pace of Dealmaking
$4,000
Verizon Wireless
deal contributed
$130B
$3,500
$3,000
Verizon’s mega-deal with Vodafone was the largest M&A transaction 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.
Billions
$2,500
$2,000
$1,500
$1,000
$500
$0
2007
2008
Source: Bloomberg DMON
2009
2010
2011
2012
2013
Deal Volume by Sector
100%
Utilities
Technology
80%
Industrial
Financial/RE
60%
Energy
Diversified
40%
Consumer Noncycl
Consumer Cycl
20%
Communications
Basic Materials
0%
2007 2008
Source: Bloomberg
Global 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.
2009
2010
2011
2012
2013
Deal Volume by Region
100%
Middle East &
Africa
80%
LatAm &
Caribbean
60%
Europe
40%
Asia Pacific
20%
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 transactions 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 advertising 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 every 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 billion deal and Vodafone bought German cable operator Kabel
Deutschland Holding AG for $11.2 billion.
North America
0%
2007 2008
Source: Bloomberg
2009
2010
2011
2012
2013
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
5. www.bloombergbriefs.com
Global top 50
ANNOUNCED
9/2/13
2/14/13
7/12/13
2/5/13
7/28/13
2/12/13
2/5/13
4/15/13
10/2/13
7/15/13
4/16/13
7/23/13
6/24/13
4/23/13
1/18/13
5/29/13
10/23/13
6/14/13
4/12/13
4/27/13
5/27/13
6/30/13
12/9/13
11/22/13
5/20/13
6/11/13
7/30/13
6/3/13
5/31/13
9/3/13
5/29/13
11/5/13
9/24/13
5/6/13
9/9/13
12/9/13
7/29/13
9/9/13
11/20/13
5/9/13
7/26/13
6/12/13
10/10/13
12/16/13
7/2/13
7/2/13
4/12/13
12/16/13
2/1/13
9/30/13
Click on
Bloomberg Brief | Mergers 2013 Year End Review
5
for deal advisers
TARGET
Verizon Wireless (45% Vodafone stake)
HJ Heinz Co
Caisse des Depots, Republic of France units
Virgin Media Inc
Omnicom Group Inc
NBCUniversal LLC
Dell Inc
Life Technologies Corp
Portugal Telecom SGPS SA
Shoppers Drug Mart Corp
National Bank of Greece SA
E-Plus Mobilfunk GmbH & Co KG
Kabel Deutschland Holding AG
Piraeus Bank SA
Orascom Construction Industries
NV Energy Inc
Cole Real Estate Investment Inc
Taikang Asset Management Co Ltd
DE Master Blenders 1753 NV
Former Fortis structured credit assets
Bausch & Lomb Inc
Onyx Pharmaceuticals Inc
US Foods Inc
Galeao airport concession
Warner Chilcott PLC
Eurobank Ergasias SA
Health Management Associates Inc
Dubai Aluminium Co Ltd
SM Land Inc
Nokia's Devices & Services business
Smithfield Foods Inc
Maroc Telecom
Tokyo Electron Ltd
BMC Software Inc
Molex Inc
BRE Properties Inc
Elan Corp PLC
Neiman Marcus Group LLC/The
Eagle Ford assets
Alpha Bank AE
Activision Blizzard Inc
Canada Safeway Ltd
PVR Partners LP
LSI Corp
Bank of Ayudhya PCL
Kashagan caspian oil project (8.4%)
Port Kembla, Port Botany
International Lease Finance Corp
SNS REAAL NV
Brookfield Office Properties Inc
COUNTRY
TARGET INDUSTRY
ACQUirer
US
US
FR
US
US
US
US
US
PT
CA
GR
DE
DE
GR
EG
US
US
CH
NL
BE
US
US
US
BR
IE
GR
US
AE
PH
FI
US
MA
JP
US
US
US
IE
US
US
GR
US
CA
US
US
TH
KZ
AU
US
NL
US
Telecommunications
Food
Finance
Telecommunications
Advertising
Media
Computers
Healthcare-Products
Telecommunications
Retail
Banks
Telecommunications
Media
Banks
Engineering
Electric
REITS
Finance
Beverages
Finance
Healthcare-Products
Pharmaceuticals
Food
Infrastructure
Pharmaceuticals
Banks
Healthcare-Services
Metal Fabricate
Real Estate
Technology
Food
Telecommunications
Semiconductors
Software
Electrical Equip
REITS
Pharmaceuticals
Retail
Energy
Banks
Software
Food
Pipelines
Semiconductors
Banks
Energy
Infrastructure
Finance
Banks
Real Estate
Verizon Communications Inc
Berkshire Hathaway, 3G Capital
Bpifrance
Liberty Global PLC
Publicis Groupe SA
Comcast Corp
MSD Capital LP, Silver Lake Mgmt
Thermo Fisher Scientific Inc
Oi SA
Loblaw Cos Ltd
Hellenic Financial Stability Fund
Telefonica Deutschland Holding AG
Vodafone Group PLC
Hellenic Financial Stability Fund
OCI
Berkshire Hathaway Inc
American Realty Capital Properties Inc
PetroChina Co Ltd
Joh A Benckiser SE
Credit Suisse, Lone Star Funds
Valeant Pharmaceuticals Int'l Inc
Amgen Inc
Sysco Corp
Odebrecht SA, Changi Airport Group etc
Actavis plc
Hellenic Financial Stability Fund
Community Health Systems Inc
Emirates Aluminium Co Ltd
SM Prime Holdings Inc
Microsoft Corp
Shuanghui International Holdings Ltd
Emirates Telecommunications Corp
Applied Materials Inc
GIC Special Investments et al
Koch Industries Inc
Essex Property Trust Inc
Perrigo Co Plc
Canada Pension Plan Inv Bd, Ares Mgmt
Devon Energy Corp
Hellenic Financial Stability Fund
Activision Blizzard Inc
Empire Co Ltd
Regency Energy Partners LP
Avago Technologies Ltd
Mitsubishi UFJ Financial Group Inc
KazMunayGas National Co JSC
Hesta AG, Industry Funds Mgmt Pty Ltd et al
AerCap Holdings NV
Kingdom of the Netherlands
Brookfield Property Partners LP
Source: Bloomberg
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
COUNTRY Value ($M)
US
Multi
FR
GB
FR
US
US
US
BR
CA
GR
DE
GB
GR
NL
US
US
CN
AT
Multi
US
US
US
BR
US
GR
US
AE
PH
US
HK
AE
US
Multi
US
US
US
Multi
US
GR
US
CA
US
SG
JP
KZ
AU
NL
NL
US
130,100
27,403
23,406
21,627
19,420
16,700
16,436
15,901
14,297
13,007
12,853
11,296
11,186
10,967
10,488
10,366
9,846
9,787
9,615
8,723
8,700
8,531
8,374
8,308
7,809
7,753
7,527
7,500
7,330
7,165
6,955
6,810
6,794
6,736
6,528
6,334
6,199
6,000
6,000
5,994
5,830
5,694
5,629
5,596
5,505
5,400
5,325
5,088
5,058
5,037
6. www.bloombergbriefs.com
Bloomberg Brief | Mergers 2013 Year End Review
Behind the Headlines
6
BY John E. Morris, WILL ROBINSON and Alicia LOONEY
Analysis of Deal Size Distributions, Valuation Multiples and Market Reactions
A Rise in Mega Deals Wasn’t Sustained
Deal volume (left):
>$5B
$500M-$5B
$50M-$500M
$0-$50M
Deals > $5B (right)
$1,500
$1,250
Billions
$1,000
$750
50
40
30
20
$500
10
$250
$0
The 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.
0
Source: Bloomberg
Large-But-Not-Mega Deals Increased
800%
Change in number of deals:
$0-$50M
$50M-$500M
$500M-$5B
>$5B
600%
400%
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.
200%
0%
-200%
Rebased to Q1 2002
Source: Bloomberg
Valuations Rebounded After a Dip in 2012
Net Income
2011
2012
2013
Free
cashflow
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. Average Ebitda and revenue multiples rose but didn’t match the level
of two years earlier.
Ebitda
Book value
Revenue
0x 2x
Source: Bloomberg
4x
6x
8x
10x 12x 14x 16x 18x 20x 22x
continued on next page
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
7. www.bloombergbriefs.com
Bloomberg Brief | Mergers 2013 Year End Review
7
Behind the Headlines: Analysis
continued from previous page
Investors Continue to Reward Acquirers
Acquirers 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, Dubilier & 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.
% change on announcement
6
4
2
0
-2
-4
-6
-8
On average, North American companies that announced acquisitions 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 $500 million.
North America ex Mexico
-10
Europe
-12
Source: Bloomberg MA
The Deals That Weren’t: Largest Deals Terminated Last Year
Announced
Terminated
Target
Country
Industry
Acquirer
Value ($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
companies driving m&a in 2014:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
ma
<go>
who’s buying who?
8. www.bloombergbriefs.com
Bloomberg Brief | Mergers 2013 Year End Review
Market DRIVERs
8
Compiled by John E. Morris, Will Robinson, AnthonY Fasanella and Alicia Looney
Heady Stock Markets, Cheap Debt, Mountain of Cash Didn’t Produce Expected Surge in M&A
Stocks Rose
50%
U.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.
Change since Jan. 2008:
40%
S&P500
20%
FTSE100
DAX
30%
HK Hang Seng
10%
0%
-10%
-20%
-30%
-40%
-50%
2008
2009
Source: Bloomberg
2010
2011
2012
2013
Interest Rates Remained Low
Buyers also benefitted from cheap borrowing costs and plentiful
credit.
25%
High Grade
20%
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.
High Yield
15%
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.
10%
5%
0%
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Source: Bank of America Merrill Lynch
The IPO Market Offered an Alternative to M&A
Middle-East & Africa
$1,000
$800
Latin America
Asia Pacific
Europe
North America
$600
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.
$400
$200
$0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Bloomberg
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
continued on next page
9. www.bloombergbriefs.com
Bloomberg Brief | Mergers 2013 Year End Review
9
Market DRIVERs
continued from previous page
Corporations Continued to Stockpile Cash
+18%
$4,500
$4,000
$3,500
+13%
+6%
Billions
$3,000
$2,500
$2,000
Continuing 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 companies 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.
$1,500
$1,000
$500
$0
Cash and cash equivalents at U.S. companies at quarter ended.
Source: Bloomberg
The Portion of All-Cash Deals Remained High
80%
70%
60%
50%
The 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.
40%
30%
20%
10%
0%
Proportion of all-cash deals
Source: Bloomberg MA
top m&a buyers in europe:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
ma
<go>
ma su<go>:
10. www.bloombergbriefs.com
10
Bloomberg Brief | Mergers 2013 Year End Review
North America
Telecoms, Media and Tech Sectors Yielded the Biggest Deals
← Value
$2,000
Deal count →
15,000
Billions
$1,500
15%
Cellular telecom
5%
10,000
Real estate
4%
$1,000
Computers
4%
5,000
$500
69%
$0
Oil E&P
Food
3%
Other
0
Source: Bloomberg MA
Source: Bloomberg
Top 10 Deals
Target
Acquirer
Verizon Wireless (Vodafone stake)
Seller
Verizon Communications Inc
deal Value
($ mln)
Vodafone Group PLC
130,100
Payment Type
Deal Status
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
Complete
Source: Bloomberg
Top Financial Advisers
Top Legal Advisers
Rank
Share
(%)
Total
Deals
($ MLN)
Ave
Deal
($ Mln)
Deal
Count
BofA Merrill Lynch
1
33.5
352,455
3,119
113
Wachtell Lipton Rosen &
1
Goldman Sachs & Co
2
32.3
339,737
2,084
163
Davis Polk & Wardwell
JP Morgan
3
31.6
331,956
2,573
129
Simpson Thacher & Bartlett
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
PJT Capital LLC
8
12.4
130,100
Citi
9
12.3
128,828
10
11.2
118,130
Adviser
Deutsche Bank AG
Source: Bloomberg
Total
Deals
($ MLN)
Ave
Deal
($ Mln)
28.0
294,402
4,600
2
24.2
254,081
3,970
64
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
2
Osler Hoskin & Harcourt LLP
7
17.0
178,944
1,924
93
130,100
1
Debevoise & Plimpton LLP
8
16.8
176,423
5,041
35
1,516
85
Latham & Watkins LLP
9
16.4
172,731
919
188
2,188
54
10
16.1
168,743
3,245
52
Adviser
Hogan Lovells
Rank
Share
(%)
Source: Bloomberg
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Deal
Count
64
11. www.bloombergbriefs.com
11
Bloomberg Brief | Mergers 2013 Year End Review
Europe, Middle East And Africa
Bailouts, Government Divestitures Topped Even Biggest Telecoms Deals
$1,800
← Value
12,000
Deal count →
$1,500
$1,200
8%
10,000
8,000
$600
5%
Commercial banks
4%
6,000
2,000
Telecoms
4,000
$300
Billions
$900
5%
$0
Real estate operations
3%
Telephone - integrated
Finance - commercial
Other
74%
0
Source: Bloomberg MA
Source: Bloomberg
Top 10 Deals
Target
Acquirer
Investment operations
Seller
deal Value
($ mln)
Payment
Type
Deal Status
Caisse des Depots,
Republic of France
Bpifrance (new entity)
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
Pending
Source: Bloomberg
Top Financial Advisers
Top Legal Advisers
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
White & Case LLP
Adviser
Total
Ave
Deals
Deal
($ MLN) ($ Mln)
Rank
Share
(%)
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
5
6.0
40,381
439
92
Adviser
Deal
Count
Deutsche Bank AG
6
12.6
85,780
1,384
62
Bredin Prat
6
5.8
38,810
1,848
21
Citi
7
12.6
85,686
1,260
68
De Brauw Blackstone Westbroek
7
5.5
37,216
1,201
31
BofA Merrill Lynch
8
11.9
80,819
1,443
56
Clifford Chance LLP
8
5.4
36,309
288
126
Lazard Ltd
9
11.7
79,453
946
84
Skadden Arps
9
5.2
35,076
1,032
34
10
10.3
70,371
1,257
56
10
5.2
35,053
1,252
28
Credit Suisse
Source: Bloomberg
Hengeler Mueller
Source: Bloomberg
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
12. www.bloombergbriefs.com
12
Bloomberg Brief | Mergers 2013 Year End Review
Asia Pacific
Consolidation in Property, Energy and Financial Sectors Pushed Up Volume Modestly
$600
← Value
12,000
Deal count →
8,000
$300
6,000
$200
4,000
$100
11%
10,000
$400
Billions
$500
2,000
$0
4%
3%
3%
3%
Real estate operations
Commercial banks
Buildings
Investment cos.
Real estate mgmt
Other
76%
0
Source: Bloomberg MA
Source: Bloomberg
Top 10 Deals
Target
Acquirer
Seller
deal Value ($
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
Complete
Source: Bloomberg
Top Financial Advisers
Top Legal Advisers
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
Herbert Smith Freehills
3
5.0
25,091
358
70
JP Morgan
4
6.1
30,712
749
41
King & Wood Mallesons
4
4.5
22,708
307
74
Macquarie Group Ltd
5
4.9
24,734
538
46
Mori Hamada & Matsumoto
5
4.3
21,897
153
143
BofA Merrill Lynch
6
4.5
22,802
671
34
Linklaters LLP
6
3.7
18,782
606
31
Barclays
7
4.3
21,715
987
22
Allen & Overy LLP
7
3.7
18,514
343
54
HSBC Bank PLC
8
4.2
21,178
784
27
Freshfields Bruckhaus Deringer
8
3.1
15,827
396
40
Adviser
Nomura Holdings Inc
CITIC Securities Co Ltd
Source: Bloomberg
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
Adviser
9
3.5
17,611
210
84
Allens
10
3.4
17,243
663
26
Kim & Chang
9
3.1
15,551
311
50
10
2.8
14,377
158
91
Source: Bloomberg
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
13. www.bloombergbriefs.com
13
Bloomberg Brief | Mergers 2013 Year End Review
LAtin America & Caribbean
Deal Volumes Slid for Third Straight Year
$250
← Value
1,250
Deal count →
750
$100
9%
1,000
$150
Billions
$200
500
$50
7%
7%
7%
67%
250
$0
4%
Airport development
Oil E&P
Investment cos.
Buildings
Schools
Other
0
Source: Bloomberg MA
Source: Bloomberg
Top 10 Deals
Target
Acquirer
Galeao airport concession
deal Value
($ mln)
Seller
Odebrecht SA, Changi Airport Group etc
Republic of Brazil
8,308
Payment
Type
Deal Status
Cash
Pending
Complete
LNG Portfolio
Royal Dutch Shell PLC
Repsol SA
4,100
Cash
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
Complete
HSBC Panama Unit
Bancolombia SA
HSBC Holdings PLC
2,234
Cash
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
Pending
Source: Bloomberg
Top Financial Advisers
Adviser
Rank
Top Legal Advisers
Share
(%)
Total
Deals
($ MLN)
Ave
Deal
($ Mln)
Deal
Count
Adviser
Rank
Share
(%)
Total
Deals
($ MLN)
Ave
Deal
($ Mln)
Deal
Count
Credit Suisse
1
25.7
26,158
747
35
Souza Cescon Barrieu
1
17.2
17,520
531
33
Banco BTG Pactual SA
2
18.4
18,745
329
57
Mattos Filho Veiga
2
9.8
10,020
244
41
Goldman Sachs & Co
3
16.4
16,692
879
19
Barbosa Mussnich
3
8.8
8,982
249
36
Bradesco BBI SA
4
15.4
15,657
626
25
Linklaters LLP
4
8.0
8,127
903
9
Banco Itau BBA SA
5
14.4
14,624
348
42
Davis Polk & Wardwell
5
7.1
7,223
722
10
Citi
6
8.8
8,971
528
17
Pinheiro Neto Advogados
6
6.5
6,670
202
33
Morgan Stanley
7
8.2
8,306
519
16
Lefosse Advogados
7
6.2
6,311
316
20
Banco Santander SA
8
7.3
7,450
497
15
Sullivan & Cromwell
8
5.6
5,718
953
6
Deutsche Bank AG
9
6.8
6,921
769
9
9
4.9
5,036
1,007
5
BofA Merrill Lynch
10
6.7
6,847
527
13
10
4.8
4,868
152
32
Source: Bloomberg
Skadden Arps
Stocche Forbes Padis
Source: Bloomberg
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
14. www.bloombergbriefs.com
Private Equity
Bloomberg Brief | Mergers 2013 Year End Review
14
Compiled by John E. Morris
Private Equity Firms Were Slow to Invest and Resorted to Refinancings, IPOs to Cash Out
Investments Continued at a Steady Pace
$700
$600
24
← Value - all deals
$500
20
No. of deals >$5B →
$400
16
12
$200
8
$100
4
$0
0
Deals
$300
Billions
Private 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.
28
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 Hathaway 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.
Source: Bloomberg
Exits Via Sales Were Down
$300
$250
← Value
750
Exits →
600
$150
450
$100
300
$50
150
Deals
$200
Billions
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.
900
0
$0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Bloomberg
Junk Debt Funded Dividends As Well As LBOs
$180
$160
$140
$120
Billions
$100
47% of total
Use of proceeds:
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.
Dividend payout
LBO
$80
$60
$40
$20
$0
2009
Source: Bloomberg
2010
2011
2012
2013
continued on next page
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
15. www.bloombergbriefs.com
Bloomberg Brief | Mergers 2013 Year End Review
15
Private equity
continued from previous page
Selling Shares Rather Than Companies: Largest IPOs of Private-Equity-Backed Companies in 2013
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.
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16. www.bloombergbriefs.com
Bloomberg Brief | Mergers 2013 Year End Review
16
JOHN MALONE’S BUSY YEAR
The Cable Industry Veteran Aims to Reshape the Sector on Two Continents
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 Liberty Global Plc, he has pressed the case
for consolidation in the telecommunications 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, building 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
JOHN MALONE
Liberty Media Corp
Liberty Global Plc
Malone owns:
94.6% (class B)
Discovery
Communications Inc.
85.3% (class B)
93.1% (class B)
Gained control in
Jan. 2013. Offered
this month to buy
remaining 47%
for about $10.6B.
Sirius XM
Holdings Inc.
Liberty Media:
53.0%
Purchased 27%
stake from Apollo
Global consortium
in May for $2.6B.
Charter
Communications
Inc.
25.8%
Disclosed unsolicited $61.3B
offer on Jan. 13, 2014
Time Warner
Cable Inc.
Key:
Acquisition
Target
Closed $21.6B
takeover in June.
Bought initial 12.6%
stake in March, then
raised in stages.
Talks for full takeover
revived in December.
Virgin Media Inc.
Ziggo NV
Liberty Global:
100.0%
Discovery discussed
bid for Scripps in
November
28.5%
Lost out to Vodafone in bidding war. Final price: $13.6B.
Kabel Deutschland Holding AG
Scripps Network
Interactive Inc.
Competition clearance for 2011 deal
reversed by German court in August.
Kabel BadenWuerttemberg
GmbH
Source: Bloomberg News, Bloomberg MA
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
17. www.bloombergbriefs.com
DEALMAKER PROFILES
Bloomberg Brief | Mergers 2013 Year End Review
17
By Will Robinson
The Advisers Behind Some of the Past Year’s Biggest Deals
Blair Effron
Centerview Partners LLC
Partner 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 completed 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 Lee
Goldman Sachs Group Inc.
Chairman of the global technology, media and telecom group and chief information officer for the investment banking division
Lee, 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 Lee
JPMorgan 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 Management LLC. He also worked on Twitter Inc.’s initial public offering, which was announced in September and priced in
November.
Ken Moelis
Moelis & Co.
Co-founder and CEO
The 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 offering, people with knowledge told Bloomberg News this month.
Paul Taubman
PJT Capital LLC
Principal
Taubman, 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 Vodafone 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 Ventresca
JPMorgan Chase & Co.
Global co-head of M&A
Ventresca 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 Cristerna. Ventresca previously ran North American M&A.
Antonio Weiss
Lazard Ltd.
Global head of investment banking
Weiss 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.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17