Deloitte Workshop - Beyond BRIC

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Deloitte Workshop - Beyond BRIC

  1. 1. Eat or be eaten<br />8 December 2010<br />
  2. 2. 2<br />Education<br />MBA, City University, London, 1996<br />B.com., Copenhagen Business School, 1988<br />The Yellow Book, London (IPOs at LSE), 1997<br />The Blue Book, London (M&A UK Rules & Regulations), 1997<br />Senior Credit Seminar, Citibank, London, 1988<br />Intermediate Credit Training Programme, Bank of America, 1986<br />CVHans Henrik Pontoppidan – Partner, Denmark (Copenhagen)<br />Financial adviser to<br />Capital raising for ChoosEV (Choose Electric Vehicle). Obtained the financing from the energy companies Syd Energy and SEAS-NVE<br />Dansk Kapitalanlæg in the sale of Danfysik to the Swiss listed company LEM<br />Naturgas Fyn in the sale of Switch.dk to NordjyskElhandel<br />Roskilde Municipality in the sale of the electricity activities out of Roskilde Forsyning to SEAS-NVE<br />Hillerød Municipality in the sale of the electricity activities out of HillerødEnergi to Energi Randers<br />DONG Energy in the preparation of information memorandum in the sale of the gas storage facility at Lille Torup<br />Altor Equity Partners in the acquisition of Wrist Group (bunker oil and ship chartering)<br />The City of Copenhagen and Copenhagen Energy (KøbenhavnsEnergi) in the sale of CE’s distribution and related activities including their 34% share in ENERGI E2 (power generation). Enterprise value of EUR 3.2bn<br />SEAS-NVE in their swap of their 24.07% share in ENERGI E2 to DONG A/S<br />Hilleroed, Elsinore and Roskilde Municipalities in the sale of their combined shareholdings in ENERGI E2<br />Copenhagen Energy in the sale of KE Partner A/S to Eltel Networks Oy (part of IndustriKapital)<br />ENERGI E2 and NarvikEnergi AS in the combined 28% investment in SaltenKraftsamband AS, Norway<br />ENERGI E2 in the acquisition of 33% of the shares in NarvikEnergi, Norway<br />Position<br />Joined Deloitte Corporate Finance in Copenhagen in 2001. Current position is Partner<br />Previous employment<br />Haburi.com, Copenhagen, CFO <br />Damgaard, Copenhagen, Director, Investor Relations<br />Sv. Handelsbanken, Executive Director<br />Unibank, Copenhagen, London, HK & PRC, Vice President<br />Bank of America NT&SA, Copenhagen, VP<br />Hambro’s Bank Plc, London, Credit Analysis<br />Eat or be eaten<br />
  3. 3. Eat or be eatenWay forward; buy or be bought<br />8 December 2010<br />
  4. 4. 4<br />Eat or be eaten<br />Capitalise on the next wave of M&ACross-border flow of funds – understanding the next wave of M&A<br />Key “next wave of M&A” themes<br /><ul><li>Secure energy, resource and food supplies
  5. 5. Infrastructure privatisation/acquisition
  6. 6. Brand acquisition
  7. 7. Global consolidation
  8. 8. Shift in consolidation activity and power to emerging markets
  9. 9. Exposure to high-growth economies for consumer business</li></li></ul><li>5<br />Eat or be eaten<br />New global challengers in key emerging markets will be the future leaders of strategic M&A activity<br />2009 BCG100 New Global Challengers<br /><ul><li>Chian Mobile
  10. 10. China National Chemical Corporation (ChemChina)
  11. 11. China National Offshore Oil Corporation (CNOOC)
  12. 12. China National Petroleum Corporation (CNPC)
  13. 13. China Petroleum & Chemical Corporation (Sinopec)
  14. 14. China Shipbuilding Industry Corporation (CSIC)
  15. 15. China Shipping Group
  16. 16. COFCOCosco Group
  17. 17. Dalian Machine Tool Group
  18. 18. FAW Group
  19. 19. Galenz Group
  20. 20. Gree Electric
  21. 21. Lenovo Group
  22. 22. Li & Fung Group
  23. 23. Midea Group
  24. 24. Shanghai Automotive Industry Corp. (SAIC)
  25. 25. Sinochem
  26. 26. Sinomach (China National Machinery Industry Corp.)
  27. 27. Sinosteel
  28. 28. Sinowel
  29. 29. Suntech Power
  30. 30. Techtronic industries
  31. 31. VTech Holdings
  32. 32. Wanxiang Group
  33. 33. ZTE</li></ul>Argentina<br /><ul><li>Tenaris</li></ul>Brazil<br /><ul><li>Camargo Correa Group
  34. 34. Coteminas
  35. 35. Embraer
  36. 36. Gerdau
  37. 37. JBS-Friboi
  38. 38. Marcopolo
  39. 39. Natura
  40. 40. Odebrecht
  41. 41. Pardigao
  42. 42. Petrobras
  43. 43. Sadia
  44. 44. Vale
  45. 45. Voterantim Group
  46. 46. WEG</li></ul>Chile<br /><ul><li>CSAV
  47. 47. Falabella</li></ul>China<br /><ul><li>Aluminium Corporation of China (Chalco)
  48. 48. Baosteel Group
  49. 49. BYD Group
  50. 50. Chery Automobile
  51. 51. China Communications Constructions Company (CCCC)
  52. 52. China International Marine Containers Group (CIMC)</li></ul>Hungary<br /><ul><li>Gideon Richter</li></ul>India<br /><ul><li>Bajaj Auto
  53. 53. Bharat Forge
  54. 54. Cromto Greaves
  55. 55. Dr, Reddy’s Laboratories
  56. 56. Hindalco Industries
  57. 57. Infosys Technologies
  58. 58. Larsen & Toubro
  59. 59. Mahindra & Mahindra
  60. 60. Reliance Industries
  61. 61. Suzion Energy
  62. 62. Tata Chemicals
  63. 63. Tata Communications
  64. 64. Tata Consultancy Services (TCS)
  65. 65. Tata Motors
  66. 66. Tata Steel
  67. 67. Tata Tea
  68. 68. United Spirits
  69. 69. Vendante Resources
  70. 70. Videocon Industries
  71. 71. Wipro</li></ul>Indonesia<br /><ul><li>IndofoodSuksesMakmur
  72. 72. Wilmar International</li></ul>Kuwait<br /><ul><li>Agility</li></ul>Malaysia<br /><ul><li>MISC Berhard
  73. 73. Petronas</li></ul>Mexico<br /><ul><li>America Movil
  74. 74. Cemex
  75. 75. Femsa
  76. 76. Gruma
  77. 77. Grupo Bimbo
  78. 78. Mexichem
  79. 79. Nemark</li></ul>Russia<br /><ul><li>Basic Element
  80. 80. Evraz Group
  81. 81. Gazprom
  82. 82. Lukoil
  83. 83. Severstai
  84. 84. Sisterma</li></ul>Thailand<br /><ul><li>Charoen Pokphan Group
  85. 85. Thai Union Frozen Products</li></ul>Turkey<br /><ul><li>Koc Holding
  86. 86. Sabanci Holding</li></ul>United Arab Emirates <br /><ul><li>Dubai World
  87. 87. Emaar Properties
  88. 88. Emirates Airline
  89. 89. Etisalat</li></ul>Source: BCG 2009 New Global Challengers Report<br />
  90. 90. 6<br />Eat or be eaten<br />Capitalise on the next wave of M&AFinancial Advisory’s participation in the top global SWFs<br />North America SWF AUM = $56bn<br />Europe SWF AUM = $300bn<br />Asia SWF AUM = $829bn<br />Middle-East, Africa SWF AUM = $1,326bn<br />South America SWF AUM = $32bn<br />Australia/New Zealand SWF AUM = $50bn<br />Note: AUM is YE 2007<br />
  91. 91. Eat or be eaten<br />Going...going...gone<br />Electronic displays<br />Computing and communications<br />Advanced materials<br />Energy storage and green energy production<br />Semiconductors<br />Already lost<br /><ul><li>“Fabless” chips</li></ul>At risk<br /><ul><li>DRAMs
  92. 92. Flash memory chips</li></ul>Already lost<br /><ul><li>Lithium-ion, lithium polymer and NiMH batteries for cell phones, portable consumer electronics, laptops and power tools
  93. 93. Advanced rechargeable batteries (NiMH and Li-ion) for hybrid vehicles
  94. 94. Crystalline and polycrystalline silicon solar cells, inverters and power semiconductors for solar panels</li></ul>At risk<br /><ul><li>Thin-film solar cells (the newest solar-power technology)</li></ul>Already lost<br /><ul><li>Desktop, notebook and netbook PCs
  95. 95. Low-end servers
  96. 96. Hard disk drivers
  97. 97. Consumer-networking gear such as routers, access points and home set-top boxes</li></ul>At risk<br /><ul><li>Blade servers and midrange servers
  98. 98. Mobile handset
  99. 99. Optical-communication components
  100. 100. Core network equipment</li></ul>Already lost<br /><ul><li>LCD monitors, TVs and handheld devices like mobile phones
  101. 101. Electrophoretic displays for Amazon’s Kindle e-reader and electronic signs</li></ul>At risk<br /><ul><li>Next generation “electronic paper” displays for portable devices like e-readers, retail signs and advertising</li></ul>Already lost<br /><ul><li>Advanced composites used in sporting goods and other consumer gear
  102. 102. Advanced ceramics
  103. 103. Integrated circuit packaging</li></ul>At risk<br /><ul><li>Carbon composite components for aerospace and wind energy applications </li></ul>Lighting<br />Already lost<br /><ul><li>Compact fluorescent lighting</li></ul>At risk<br /><ul><li>LEDs for solid-state lighting, signs, indicators and backlights</li></ul>Source: Harvard Business Review July-August 2009<br />Many high-tech products can no longer be manufactured in the US because critical knowledge, skills and suppliers of advanced materials, tools production equipment and components have been lost through outsourcing. Many other products are on the verge of the same fate.<br />7<br />7<br />
  104. 104. 8<br />Eat or be eaten<br />Source: Harvard Business Review, December 2009<br />Mergers and AcquisitionsDo not integrate your acquisitions, partner with them<br />
  105. 105. 9<br />Eat or be eaten<br />Source: Harvard Business Review, December 2009<br />Mergers and Acquisitions Who should partner?<br />
  106. 106. 10<br />Eat or be eaten<br />Source: Harvard Business Review, May 2009<br />How emerging giants are rewriting the rules of M&ATwo approaches to M&A<br />Emerging giants use novel integration techniques and measure performance in light of long-term goals<br />
  107. 107. 11<br />Eat or be eaten<br />A better approach to China’s markets<br />China’s 800-plus cities, 200 of them with population over 1 million are growing at different rates and changing in different ways<br />It is better to organise the markets as cluster groups of cities located within 300 kilometres of 1 or 2 hubs that each represents at least 1% of the country’s GDP<br />Changchunharbin<br />22m POP<br />3.6% GDP<br />9.3% proj. growth<br />Liao Central South<br />22m POP<br />34.3% GDP<br />7.6% proj.growth<br />Jingjinji<br />45m POP<br />10.8% GDP<br />10.5% proj. growth<br />Huhehaote<br />6m POP<br />1.3% GDP<br />9.9% proj. growth<br />Shanghai & Central<br />Shandong Byland<br />49m POP<br />9.0% GDP<br />10.3% proj. growth<br />Different cluster, different consumers<br />People in the Shanghai cluster are less confident about the future, are less likely to prefer Chinese brands and view savings as more important<br />Central<br />31m POP<br />3.8% GDP<br />13.1% proj. growth<br />Nanjing<br />24m POP<br />4.8% GDP<br />11% proj. growth<br />Hefei<br />23m POP<br />2.8% GDP<br />13.3% proj. growth<br />Shanghai<br />35m POP<br />10.8% GDP<br />8.7% proj.growth<br />Yangtze Mid/Lower<br />32m POP<br />4% GDP<br />12.1% proj. growth<br />Hangzhou<br />32m POP<br />6.7% GDP<br />10.5% proj. growth<br />Nanchang<br />12m POP<br />1.7% GDP<br />12.9% proj. growth<br />Hangzhou & Hefei<br />Chengdu<br />27m POP<br />3.2% GDP<br />13% proj. growth<br />Chongqing<br />11m POP<br />1.8% GDP<br />9.9% proj. growth<br />Established markets,up-and-comers<br />The Hefei cluster’s middle-class population is expected to explode by 2015<br />Coast West<br />31m POP<br />4.2% GDP<br />11% proj. growth<br />Guangzhou<br />30m POP<br />6.6% GDP<br />7.4% proj. growth<br />Kunming<br />10m POP<br />1.1% GDP<br />8.7% proj. growth<br />Shenzen<br />16m POP<br />4.3% GDP<br />7.5% proj. growth<br />Source: Havard Business review March 2010<br />
  108. 108. 12<br />Eat or be eaten<br />Contact details<br />Financial Advisory ServicesWeidekampsgade 62300 Copenhagen SMail to:P.O. Box 16000900 Copenhagen C<br />Tel: +45 36 10 20 30Fax: +45 36 10 20 40www.deloitte.dk<br />Hans Henrik PontoppidanPartnerCorporate Finance<br />Direct:Mobile:hpontoppidan@deloitte.dk<br />+45 36 10 34 81<br />+45 20 20 04 81<br />Member of Deloitte Touche Tohmatsu Limited<br />
  109. 109. This document has been prepared by Deloitte Financial Advisory Services. Unless stated in this document the following shall apply to the information. The information, in particular the figures, data and schedules, are preliminary and for discussion purposes only. We do not represent that such information is true, accurate or complete and it should not be relied upon as such. No independent verification exercise has been undertaken in respect of the information. All information, opinions and estimates in this document are Deloitte Financial Advisory Services judgment as at the date of this document and are subject to change without notice. While this information has been prepared in good faith, no representation or warranty, expressed or implied, is made. The information in this document is supplied on the condition that Deloitte Financial Advisory Services, and any partner or employee of Deloitte Financial Advisory Services, are not liable for any error or inaccuracy, whether negligently caused or otherwise, or for any loss or damage suffered by any person due to such an error, omission or inaccuracy as a result of such supply. This document is strictly for internal use and may not be reproduced, distributed or disclosed to any third party or referred to publicly without the prior written consent of Deloitte Financial Advisory Services.<br />Deloitte Touche Tohmatsu LimitedDeloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its Member Firms. <br />© 2010 Deloitte Financial Advisory Services A/S. Member of Deloitte Touche Tohmatsu Limited<br />

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