Mergers 2012 Review

MERGERS
2012 Review
2013 outlook
January 2013

01.04.13 www.bloombergbriefs.com Bloomberg Brief | Mergers 2

Contents M&A highlights: 2012

M&A HIGHLIGHTS: REGIONAL VALUATIONS MONTH ACTIONS
2012 ANALYSIS: Page 11
page 2 Deal volumes, indus- Roche Holding AG made an ultimately unsuccessful $6 billion hostile bid for Illumina
tries, top deals and PRIVATE EQUITY Inc. Roche is reported to be considering renewing its offer in 2013.
GLOBAL top advisers for: Page 11 JAN
SUMMARY Outokumpu OYJ agreed to buy ThyssenKrupp AG’s Inoxum Stainless Steel unit for
Deal volumes, top in- North America SECTOR ANALYSIS $3.5 billion.
dustries and biggest page 7 Volumes and premi- Glencore International Plc offered to buy the 66 percent of Xstrata Plc it didn’t already own,
terminated deals. ums, telecom deals; in what would be the largest deal of the year. In November, Xstrata shareholders approved
page 3 EUROPE, MIDDLE energy acquirers a higher offer for a total deal value of $46.7 billion.
EAST & AFRICA and consumer non- FEB
UPS Inc. agreed to buy TNT Express NV for $6.9 billion. The merger has been held up
COUNTRY BY page 8 cyclical deals.
while EU regulators seek concessions to preserve competition.
COUNTRY page 12.
Map of volume ASIA-PACIFIC GDF Suez offered to buy the 30 percent of International Power Plc it didn’t already
changes from 2011 page 9 TRENDS own for $10.2 billion, winning agreement with a higher offer of $11.0 billion in April.
to 2012. Asian buyers MAR
page 4 LATIN AMERICA & page 13 Cisco Systems Inc. agreed to buy digital video company NDS Group Ltd. from News
CARIBBEAN Corp. and Permira for $5 billion.
GLOBAL TOP 50 page 10 TRENDS
DEALS The impact of deals Coty Inc. made an ultimately unsuccessful $12.8 billion bid for Avon Products Inc.
page 5 on buyers’ share Coty withdrew the offer in May after Avon declined to negotiate by its deadline.
prices. APR
CAPITAL FLOWS page 14 Nestle AG agreed to buy Pfizer Inc.’s nutrition business for $11.9 billion, adding baby
Deal flows between foods to its line-up as the drugmaker focused on research and development.
regions. DEALMAKERS
page 6 Seven top financial Eaton Corp. agreed to buy electricity distribution equipment manufacturer Cooper
advisers in 2012. Industries Plc for $12.8 billion.
page 15 MAY
Marubeni Corp. agreed to buy U.S.-based grain merchandiser Gavilon Group LLC
from a private-equity group led by Soros Fund Management LLC.

Anheuser Busch Inbev NV offered to buy the 25 percent of Mexico's Grupo Modelo
SAB it didn’t already own for $17.2 billion.
Bloomberg Brief Mergers 2012 Review/2013 Outlook
JUN
Newsletter Ted Merz Bloomberg News Dan Moss Bristol-Myers Squibb Co. offered $6.5 billion for Amylin Pharmaceuticals LLC.
Executive Editor tmerz@bloomberg.net Executive Editor dmoss@bloomberg.net
+1-212-617-2309 +1-202-624-1881
China’s Cnooc Ltd. offered $17.4 billion for Canadian energy group Nexen Inc. In
Bloomberg News Managing Editor December, the Canadian government approved the deal, the largest-ever foreign
acquisition by a Chinese company.
Katherine Snyder JUL
ksnyder@bloomberg.net Volkswagen AG agreed to buy the 50.1 percent of Porsche AG it didn’t already own
212-617-5212 for $8.7 billion.
Mergers Newsletter Editors Reporter
Hertz Global Holdings Inc. offered $2.5 billion for Dollar Thrifty Automotive Group.
John E. Morris Scott Johnson Will Robinson The deal was cleared by U.S. antitrust regulators in November, ending a five-year
jmorris89@bloomberg.net sjohnson166@bloomberg.net wrobinson11@bloomberg.net pursuit by Hertz of its rival car rental company.
212-617-0628 +852-2977-4678 212-617-5327 AUG
John Manley Rob Williams Aetna Inc. bought Coventry Health Care Inc. for $5.6 billion, one of several health insur-
jmanley5@bloomberg.net rwilliams80@bloomberg.net ance deals following the approval of U.S. President Barack Obama’s healthcare plans.
+44-(0) 20-3525-8762 212-617-8844
Thai Beverage PCL bid $9.9 billion for Fraser & Neave Ltd, sparking a bidding war for
Contributing Data Editors the Singapore-based property and brewing group.
Carol Chuang Alicia Looney Uvarshanie Nandram SEP
cchuang2@bloomberg.net alooney1@bloomberg.net unandram1@bloomberg.net Liberty Global Inc. offered to buy the rest of Belgium’s Telenet Group Holding NV for
212-617-3642 +1 212-617-8006 212-617-7743 $2.5 billion.
Designers
Rosneft OAO bought out BP and its partners in TNK-BP Ltd. for a total of $54.4 billion.
Katie Porter Rose Marie Constantino Andy Hodgson
The deal awarded BP a 19.75 percent stake in Rosneft.
kporter7@bloomberg.net rconstant2@bloomberg.net ahodgson9@bloomberg.net
212-617-6099 212-617-4484 +44-20-7392-0373 OCT
Walt Disney Co. bought Lucasfilm Ltd. for $4.1 billion, promising a new trilogy of ‘Star
Ian Maready Pekka Aalto Steve Usher
Wars’ movies.
imaready@bloomberg.net pekka2@bloomberg.net susher8@bloomberg.net
212-617-3761 +852-2977-6013 +44-20-3525-8465
Newsletter Business Manager Advertising Reprints & Permissions Overseas Union Enterprise Ltd. offered $12.7 billion for Fraser & Neave Ltd.
Nick Ferris bbrief@bloomberg.net Lori Husted NOv
nferris2@bloomberg.net 212-617-6975 lori.husted@theygsgroup.com Lehman Brothers Holdings Inc. sold its Archstone realty business for $16.1 billion to
212-617-6975 717-505-9701 a group led by Equity Residential.
To subscribe via the Bloomberg terminal type BRIEF <GO> or on the web at:
www.bloombergbriefs.com Intercontinental Exchange Inc. offered $8.2 billion for NYSE Euronext after an earlier
To contact the editors: bbrief@bloomberg.net plan to merge the Big Board with Deutsche Boerse fell through.
This newsletter and its contents may not be forwarded or redistributed without the prior consent of
DEC
Bloomberg. Please contact our reprints and permissions group listed above for more information Freeport McMoran Copper & Gold Inc. agreed to buy Plains Exploration & Produc-
© 2013 Bloomberg LP. All rights reserved. tion Co. and McMoran Exploration Co. for a total of $12.7 billion.

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GLOBAL SUMMARY
Dealmaking Worldwide Did Not Live Up to Hopes
In the first half of 2012, bank executives said on earnings calls that their clients had many deals in the works and that they expected a
surge of deals later in the year. While deals rose in the fourth quarter, the full-year total, $2.23 billion, was down 7.8 percent from 2011.

Volume by Region Volume and Deal Counts by Month
$4,500
Asia-Pacific 300 3,000
$4,000
Latin America-Caribbean
North America 250 2,500
$3,500
EMEA
$3,000 200 2,000

Value - $ Billions
$2,500

Deals
150 1,500
Billions

$2,000
100 1,000
$1,500

$1,000 50 500

$500 0 0

$0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Bloomberg Source: Bloomberg

Emerging markets activity did not make up for declines in deal levels in A sharp rise in deal volume in the fourth quarter was not enough to offset
the U.S. and Western Europe. the low levels in the first three quarters.

Top Industries Largest Terminated Deals
VALUE
TARGET COUNTRY ACQUIRER
($Mln)
$390 Avon Products U.S. Parentes Holding 12,854
$232 Financial (incl. real estate) Illumina U.S. Roche 6,052
Consumer noncyclical Whitehaven Coal Australia Tinkler Group 5,516

$250 Rhoen Klinikum Germany Fresenius SE 4,904
$412 Energy
Oshkosh U.S. Icahn Enterprises 3,245
Communications Sinofert phosphorus stake China Yunnan Yuntianhua 2,587
Industrial Coal assets China Shanxi Meijin Energy 2,335
$260 RONA Canada Lowe's Cos 2,178
Consumer cyclical
$345
APA Sub Group Australia Caisse de Depot-Quebec, et al 2,091
Other
Quest Software U.S. Insight Venture Partners 2,050
$341 Scailex Israel Hutchison Whampoa et al 1,997
$ billions
Source: Bloomberg Georgia Gulf U.S. Westlake Chemical 1,853

Financial services, consumer noncyclical and energy companies were the Source: Bloomberg Note: Terminated in 2012
top targets in 2012.

Global M&A Rebound? Try the new MA!

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Country by country
Deal Volumes Fell in Most Developed Economies Compared With 2011
Many major developed countries saw sharp drops in M&A levels — France was down 74 percent — and even some emerging econo-
mies such as Brazil and Turkey saw declines.
The biggest percentage gainer was Portugal (323 percent), based on three $4 billion-plus deals — for a highway operator, a cement
company and the state-owned company that runs the country’s three main airports. Singapore was up 188 percent because of two bids
for property and drinks company Fraser & Neave Ltd. and Heineken NV’s purchase of Fraser & Neave’s brewery subsidiary. Russian
deal volume rose 129 percent thanks to Rosneft OAO’s $54.8 billion purchase of TNK-BP Ltd. from BP plc and a group of Russian bil-
lionaires. Glencore International Plc’s deal to buy full control of Xstrata Plc pushed Swiss M&A deal volume up 118 percent from 2011.
Multi-billion-dollar deals in banking, agricultural products, media and real estate as well as in the energy and resources industries
pushed up the totals in Canada.
Shadings in the map below indicate the direction and magnitude of the percentage change. Only countries with at least $4 billion of deal
volume in both 2011 and 2012 are included.

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Global top 50 Click on orange arrows for deal advisers

Target EV/
Target Industry Acquirer
Target Target Ticker Acquirer Value (SM) Trailing 12M
Sector Ticker
EBITDA
Xstrata Plc XTA LN Basic Materials Glencore International Plc GLEN LN 46,672 5.2
Sprint Nextel Corp. S US Communications Softbank Corp. 9984 JP 37,834 6.4
T-Mobile USA Inc. 166783Q US Communications MetroPCS Communications Inc. PCS US 32,776 -
TNK-BP Ltd. stakes owned by AAR TNKBP RU Energy Rosneft OAO ROSN RM 28,000 -
TNK-BP Ltd. stake owned by BP Plc TNKBP RU Energy Rosneft OAO ROSN RM 26,380 -
Nexen Inc. NXY CN Energy CNOOC Ltd. 883 HK 17,432 4.1
Grupo Modelo SAB de CV GMODELOC MM Consumer, Non-cyclical Anheuser-Busch InBev NV ABI BB 17,231 12.7
Archstone Enterprise LP 3553139Z US Financial Equity Residential, others - 16,094 -
Cooper Industries Plc CBE US Industrial Eaton Corp Plc ETN US 12,846 12.8
Fraser and Neave Ltd. (offer still pending) FNN SP Consumer, Non-cyclical Overseas Union Enterprise Ltd. - 12,685 25.6
Pfizer Nutrition 401215Z US Consumer, Non-cyclical Nestle SA NESN VX 11,850 -
Archstone Enterprise LP 3553139Z US Financial Lehman Brothers Holdings Inc. LEHMQ US 11,806 -
Plains Exploration & Production Co. PXP US Energy Freeport-McMoRan Copper & Gold Inc. FCX US 10,173 6.1
International Power Plc IPR LN Utilities GDF Suez GSZ FP 10,171 8.4
Ping An Insurance Group Co of China Ltd. 2318 HK Financial Charoen Pokphand Group Co Ltd. 1044Z TB 9,385 -
Fraser and Neave Ltd. (offer still pending) FNN SP Consumer, Non-cyclical Thai Beverage PCL THBEV SP 9,192 25.6
Consolidated Infrastructure Group Ltd. CIL SJ Industrial Shareholders - 8,867 -
Dr Ing hcF Porsche AG 3407753Z GR Consumer, Cyclical Volkswagen AG VOW GR 8,730 -
NYSE Euronext NYX US Financial IntercontinentalExchange Inc. ICE US 8,169 8.4
State Grid Energy Development Co Ltd. 0542902D CH Utilities Shenhua Group Corp Ltd. SHGCLZ CH 8,127 -
Best Buy Co Inc. BBY US Consumer, Cyclical Private Investor - 7,594 2.6
Viterra Inc. VT CN Industrial Glencore International Plc. GLEN LN 7,499 8.6
EP Energy Global LLC EPE US Energy Apollo Global Management LLC, others - 7,150 -
Alibaba Group Holding Ltd., Yahoo! stake ALIBABZ CH Diversified Alibaba Group Holding Ltd. ALIBABZ CH 7,100 -
Sterlite Industries India Ltd. STLT IN Basic Materials Sesa Goa Ltd. SESA IN 6,854 3.8
TNT Express NV TNTE NA Industrial United Parcel Service Inc. UPS US 6,853 10.6
Redecard SA RDCD3 BZ Consumer, Non-cyclical Itau Unibanco Holding SA ITUB4 BZ 6,845 12.6
Sunoco Inc. SUN US Energy Energy Transfer Partners LP ETP US 6,787 4.2
Ralcorp Holdings Inc. RAH US Consumer, Non-cyclical ConAgra Foods Inc. CAG US 6,655 10.6
Alliance Boots GmbH 3609631Z GR Consumer, Non-cyclical Walgreen Co. WAG US 6,596 -
Cequel Communications Holdings LLC 9472287Z US Communications Management group, others - 6,580 -
Amylin Pharmaceuticals LLC AMLN US Consumer, Non-cyclical Bristol-Myers Squibb Co. BMY US 6,486 -
Cairn India Ltd. CAIR IN Energy Sesa Goa Ltd. SESA IN 5,900 5.9
Brisa Auto-Estradas de Portugal SA BRI PL Consumer, Non-cyclical Tagus Holding Sarl 0237690D LX 5,777 11.2
Orascom Telecom Media & Technology OTMT EY Communications Shareholders - 5,653 -
Hankook Tire Co Ltd. 161390 KS Consumer, Cyclical Shareholders - 5,650 -
Actavis Group HF ACT IR Consumer, Non-cyclical Watson Pharmaceuticals Inc. WPI US 5,610 13.4
Gavilon Group LLC 2745841Z US Consumer, Non-cyclical Marubeni Corp. 8002 JP 5,600 -
Coventry Health Care Inc. CVH US Consumer, Non-cyclical Aetna Inc. AET US 5,591 6.3
Cimpor Cimentos de Portugal SGPS SA CPR PL Industrial Camargo Correa SA 899180Z BZ 5,431 7.2
Progress Energy Resources Corp. PRQ CN Energy Petroliam Nasional Bhd PET MK 5,405 32.6
Annington Homes Ltd. 3653359Z LN Financial Terra Firma Capital Partners Ltd. 99484Z LN 5,091 -
ExxonMobil YK 0134298D JP Consumer, Cyclical TonenGeneral Sekiyu KK 5012 JP 5,021 -
NDS Group Ltd. NNDS US Technology Cisco Systems Inc. CSCO US 5,000 12.9
Asia Financial Indonesia Pte Ltd. 204819Z IJ Financial DBS Group Holdings Ltd. DBS SP 4,997 -
Servizi Assicurativi del Commercio Estero 580856Z IM Financial Cassa Depositi e Prestiti SpA 186950Z IM 4,900 -
DuPont Performance Coatings Inc 2121Z AU Basic Materials Carlyle Group LP CG US 4,900 -
Rosneft OAO, 19.75 % stake ROSN RM Energy BP Plc. BP/ LN 4,,799 4.5
Citigroup stake Morgan Stanley Smith Barney 0196898D US Financial Morgan Stanley MS US 4,725 -
Amerigroup Corp. AGP US Consumer, Non-cyclical WellPoint Inc. WLP US 4,555 13.4
Source: Bloomberg

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15


CAPITAL FLOWS
Cross-Border Deals Totaled $1.13 Trillion in 2012, Led by Glencore-Xstrata
Cross-border transactions grew 8.7 percent to $1.13 trillion last year from $1.04 trillion in 2011. The biggest announced deal was U.K.-
based miner and commodities trader Glencore International Plc’s offer for the 66 percent of Switzerland’s Xstrata Plc it didn’t already
own. The final offer, after an increase, was worth $46.7 billion and was approved by shareholders in November.

Global Asia-Pacific
Outflows Inflows Outflows Inflows

Asia Pacific $197,106 $73,501 Asia Pacific $197,106 $73,501

W. Europe $192,014 $206,408 Asia (ex-Japan) $106,719 $63,172

N. America $206,215 $228,884 Japan $107,116 $13,904

EMEA $169,686 $212,050 H.K./China $70,268 $31,788

Americas $196,463 $263,531 India $14,886 $11,249

Latin America $24,254 $65,554 Singapore $21,942 $23,772

E. Europe $6,259 $25,912 Aust./N.Z. $13,115 $40,348

0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%
Source: Bloomberg
Source: Bloomberg

The Asia-Pacific region had the greatest proportion of outbound capital Softbank’s $37.8 billion investment in Sprint-Nextel helped lift Japanese
flows, led by Beijing-based Cnooc’s $17 billion bid for Canada’s Nexen.
.4 cross-border M&A volume 22 percent over 2011. (See also page 13.)

Americas EMEA
Outflows Inflows Outflows Inflows

N. America $206,215 $228,884 ME and Africa $22,304 $21,148

W. Europe $192,014 $206,408
Americas $196,463 $263,531
EMEA $169,686 $212,050
Latin America $24,254 $65,554
E. Europe $6,259 $25,912
Canada $73,436 $62,668
Germany $32,183 $38,485
U.S. $192,745 $219,154
Russia $9,985 $16,427
Brazil $8,856 $24,181 U.K. $82,950 $148,438

Mexico $8,245 $27,757 France $7,378 $20,329

0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%

Canada’s acquisitions of foreign companies grew 13 percent from the The U.K.’s inflows grew 50.2 percent in 2012 as the country emerged from
prior year to about $73.4 billion in 2012 as outflows exceeded inflows. a recession in the third quarter, helped by the London Olympic Games.

INDUSTRY
BI
<GO>

Grocer List: PRICES + BRANDS + DEMOGRAPHICS RESEARCH

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15


North America Click on orange arrows for interactive features

Energy, Telecom Dominate U.S., Canadian Deals
Annual Deal Volume
$2,000
($ billions)
$1,800 Oil Comp.-Exploration &
$1,600 Production
Cellular Telecom
$1,400 $111
$1,200 Real Estate
$1,000 Oper./Development
$693
Building-
$800 $75 Residential/Commercial
$600 Pipelines
$400 $43
Other
$200 $33
$0 $24 ($ billions)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Deal volume fell back from 2011, and is still well below the pre-Lehman Energy and telecom saw the biggest volumes, while real estate was
crash peak of 2007. boosted by Archstone, a legacy of the Lehman collapse.

Top 10 Deals
Target Name Acquirer Name Seller Name DEAL Value ($ mln) Payment Type Deal Status
Sprint Nextel Corp. Softbank Corp. - 37,834 Cash or Stock Pending
T-Mobile USA Inc. MetroPCS Communications Inc. Deutsche Telekom AG 32,776 Cash and Stock Pending
Nexen Inc. CNOOC Ltd. - 17,432 Cash Pending
Archstone Enterprise LP Equity Residential,AvalonBay Communities Inc. Lehman Brothers Holdings Inc 16,094 Cash and Stock Pending
Cooper Industries Plc Eaton Corp Plc - 12,846 Cash and Stock Complete
Pfizer Nutrition Nestle SA Pfizer Inc. 11,850 Cash Complete
Archstone Enterprise LP Lehman Brothers Holdings Inc. Barclays Plc,Bank of America Corp. 11,806 Cash Complete
Plains Exploration & Production Co. Freeport-McMoRan Copper & Gold Inc. - 10,173 Cash and Stock Pending
NYSE Euronext IntercontinentalExchange Inc - 8,169 Cash or Stock Pending
Best Buy Co Inc Former CEO Richard Schulze - 7,594 Cash Pending
Source: Bloomberg

Top 10 Financial Advisers Top 10 Legal Advisers
Market Total Ave Market Total Ave
Deal deal
Adviser Rank Share Deals Deal ($ Adviser Rank Share Deals Deal
Count count
(%) ($ MLN) Mln) (%) ($ MLN) ($ MLN)
Goldman Sachs & Co. 1 21.5 210,778 1,293 163 Skadden Arps Slate Meagher & Flom 1 17.3 169,791 1,124 151
Morgan Stanley 2 20.6 202,105 1,713 118 Wachtell Lipton Rosen & Katz 2 15.1 147,765 2,463 60
Citigroup 3 19.9 194,752 2,140 91 Davis Polk & Wardwell 3 12.8 125,411 1,718 73
JP Morgan 4 19.3 189,130 1,630 116 Simpson Thacher & Bartlett 4 11.3 110,604 1,063 104
Credit Suisse 5 16.6 162,351 1,888 86 Weil Gotshal & Manges LLP 5 11.1 109,209 903 121
Barclays 6 14.4 141,413 1,209 117 Latham & Watkins LLP 6 10.8 105,833 551 192
Deutsche Bank AG 7 12.5 122,937 1,661 74 Kirkland & Ellis 7 10.2 99,739 424 235
Bank of America Merrill Lynch 8 12.2 119,619 1,040 115 Shearman & Sterling LLP 8 9.7 95,346 1,271 75
RBC Capital Markets 9 9.4 91,729 584 157 Morrison & Foerster LLP 9 9.3 90,725 1,210 75
Evercore Partners Inc. 10 8.6 84629 1387 61 Sullivan & Cromwell 10 9.2 90552 1078 84

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15


EUROPE, MIDDLE EAST AND AFRICA Click on orange arrows for interactive features

Glencore-Xstrata, Rosneft-BP Stand Out in Lackluster Year
Annual Deal Volume
$1,800
($ billions)
$1,600 Oil Comp.-Integrated

$1,400
$65 Diversified Minerals
$1,200
Commercial Banks Non-
$1,000
U.S.
$460
$800 $49 Telecom Services

$600
Real Estate
$27 Oper./Development
$400
$21 Other
$200
$20 ($ billions)
$0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

European merger volume has still not risen back to 2004 levels, and is Rosneft’s complex twin deals to buy TNK-BP from BP and its Russian
less than half its pre-recession peak. partners accounted for most of the oil industry merger volume.

Top 10 Deals
Target Name Acquirer Name Seller Name deal Value ($ mln) Payment Type Deal Status
Xstrata Plc Glencore International Plc - 46,672 Stock Pending
TNK-BP Ltd. AAR stakes Rosneft OAO Renova, others 28,000 Cash Pending
TNK-BP Ltd. BP Plc’s stake Rosneft OAO BP PLC 26,380 Cash and Stock Pending
International Power PLC GDF Suez - 10,171 Cash Complete
Consolidated Infrastructure Group Ltd. Shareholders Peregrine Holdings Ltd 8,867 Complete
Dr Ing hcF Porsche AG Volkswagen AG Porsche Automobil Holding SE 8,730 Cash Complete
TNT Express NV United Parcel Service Inc. - 6,853 Cash Pending
Alliance Boots GmbH Walgreen Co. KKR & Co LP 6,596 Cash and Stock Complete
Banco de Valencia SA Kingdom of Spain - 5,823 Cash Pending
Brisa Auto-Estradas de Portugal SA Tagus Holding Sarl - 5777 Cash Pending
Source: Bloomberg

Deal Deal
Count Count
(%) ($ MLN) Mln) (%) ($ MLN) ($ Mln)
Goldman Sachs & Co. 1 33.6 215,634 1,960 110 Linklaters LLP 1 25.7 165,207 933 177
Deutsche Bank AG 2 31.0 198,814 2,259 88 Freshfields Bruckhaus Deringer 2 21.5 137,916 913 151
Barclays 3 29.8 191,509 2,736 70 Clifford Chance LLP 3 14.5 93,331 676 138
Morgan Stanley 4 28.0 179,678 1,762 102 Cleary Gottlieb Steen & Hamilton 4 10.9 70,014 4,118 17
Citigroup 5 24.8 159,310 2,451 65 Skadden Arps Slate Meagher & Flom 5 10.5 67,099 1,428 47
Bank of America Merrill Lynch 6 19.1 122,308 2,308 53 Weil Gotshal & Manges LLP 6 9.6 61,356 1,394 44
Credit Suisse 7 18.9 121,585 2,061 59 Allen & Overy LLP 7 9.1 58,096 370 157
Rothschild 8 18.9 121,263 814 149 Cravath Swaine & Moore 8 8.9 57,375 7,172 8
JP Morgan 9 16.6 106,848 1,444 74 White & Case LLP 9 8.9 56,936 999 57
UBS 10 13.6 87,346 1,386 63 Minter Ellison 10 8.8 56,680 8097 7

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15


ASIA PACIFIC Click on orange arrows for interactive features

Fraser & Neave’s Six-Month Bid Battle Bolsters Slowing Merger Market
Annual Deal Volume
$600
($ billions)
Brewery
$500
Investment Companies
$400 $17
Finance-Credit Card
$300 $75
Oil Comp.-Exploration &
Production
$200
$8 Electric-Integrated

$100
$7 Other
($ billions)
$0 $7
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 $4

Even a boost from the two pending bids for Singapore’s Fraser & Neave Heineken’s $4.4 billion buyout of Fraser & Neave’s stake in Asia Pacific
failed to propel 2012 deal volume above the prior-year figure. Breweries helped the sector top the 2012 rankings.

Top 10 Deals
Payment
Target Name Acquirer Name Seller Name deal Value ($ mln) Deal Status
Type
Fraser and Neave Ltd. Overseas Union Enterprise Ltd. - 12,685 Cash Pending
Ping An Insurance Group Co. of China Ltd. Charoen Pokphand Group Co Ltd. HSBC Holdings Plc 9,385 Cash Pending
Fraser and Neave Ltd. Thai Beverage PCL - 9,192 Cash Pending

Tokyo Electric Power Co Inc. Nuclear Damage Compensation Facilitation Corp. - 8,573 Cash Complete

State Grid Energy Development Co Ltd. Shenhua Group Corp Ltd China State Grid Corp. 8,127 Undisclosed Pending
Cash and
Alibaba (Yahoo!’s stake) Alibaba Group Holding Ltd. Yahoo! Inc. 7,100 Complete
Stock
Sterlite Industries India Ltd. Sesa Goa Ltd. - 6,854 Stock Pending
Cairn India Ltd. Sesa Goa Ltd. Vedanta Resources PLC 5,900 Cash Pending
Hankook Tire Co Ltd Shareholders Hankook Tire Worldwide Co Ltd 5,650 Complete
ExxonMobil YK TonenGeneral Sekiyu KK Exxon Mobil Corp 5,021 Cash Complete
Source: Bloomberg

Deal Deal
Count Count
(%) ($ MLN) Mln) (%) ($ MLN) ($ Mln)
Goldman Sachs & Co 1 19.3 97,197 1,171 83 Mori Hamada & Matsumoto 1 9.6 48,494 354 137
Morgan Stanley 2 18.4 92,697 653 142 Nagashima Ohno & Tsunematsu 2 9.2 46,141 285 162
JP Morgan 3 15.6 78,407 1,705 46 Nishimura & Asahi 3 8.3 41,694 366 114
Credit Suisse 4 13.3 66,850 1,453 46 Freshfields Bruckhaus Deringer 4 6.4 32,267 1,008 32
Nomura Holdings Inc 5 10.3 51,822 432 120 Skadden Arps Slate Meagher & Flom 5 6.0 29,957 999 30
Citi 6 10.0 5,0028 893 56 WongPartnership LLP 6 5.4 27,124 431 63
UBS 7 9.1 45,600 931 49 Shook Lin & Bok 7 5.3 26,436 979 27
Bank of America Merrill Lynch 8 7.6 38,,427 1,921 20 Stamford Law Corp 8 4.5 22,758 759 30
HSBC Bank PLC 9 7.3 36,708 1,530 24 Anderson Mori & Tomotsune 9 4.1 20,683 591 35
Deutsche Bank AG 10 6.6 33,291 951 35 Baker & McKenzie 10 4.1 20,543 223 92

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15


Latin America - CaribBean Click on orange arrows for interactive features

Deal Volumes Sustained by Brewery, Health Care and Financial Takeovers
Annual Deal Volume
$600
($ billions)
Real Estate
$500 Oper/Development
$40 Diversified Operations
$400
$19 Beverages-Wine/Spirits
$300 $397
$17 Oil Comp.-Exploration &
Production
$200 $15
Electric-Generation
$14
$100 Other
($ billions)
$0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Deal volumes in 2012 were close to prior year levels, sustained by AB Modelo dominated brewery deals, while financials included UnitedHealth’s
InBev’s $17.23 billion purchase of the rest of Mexico’s Grupo Modelo. takeover of Brazilian insurer and hospital group Amil through its parent JPLSPE.

Top 10 Deals
Target Name Acquirer Name Seller Name DEAL Value ($ mil.) Payment Type Deal Status
Grupo Modelo SAB de CV Anheuser-Busch InBev NV - 17,231 Cash Pending
Redecard SA Itau Unibanco Holding SA - 6,845 Cash Complete
Oil and Gas properties/Gulf of Mexico Plains Exploration & Production Co. BP PLC 5,500 Cash Complete
JPLSPE Empreendimentos e Participacoes SA UnitedHealth Group Inc. - 3,201 Cash Complete
Grupo Argos SA Shareholders Cementos Argos SA 3,167 - Complete
Rede Energia SA CPFL Energia SA,Equatorial Energia SA - 2,792 Cash Pending
Operations in Colombia Cencosud SA Carrefour SA 2,605 Cash Complete
Consorcio Comex SA de CV Sherwin-Williams Co. - 2,340 Cash Pending
PortX Operacoes Portuarias SA MMX Mineracao e Metalicos SA - 2,091 Stock Complete
EBX Group Co. Mubadala Development Co. - 2,000 Cash Complete
Source: Bloomberg

Deal Deal
Adviser Rank Share Deals Deal Adviser Rank Share Deals Deal
Count Count
(%) ($ MLN) ($ Mln) (%) ($ MLN) ($ Mln)
JP Morgan 1 33.1 39,095 2,443 16 Skadden Arps Slate Meagher & Flom 1 22.4 26,445 2,204 12
Credit Suisse 2 29.7 35,084 731 48 Sullivan & Cromwell 2 21.2 25,066 2,785 9
Bank of America Merrill Lynch 3 22.3 26,333 2,194 12 Mattos Filho Veiga Filho Marrey Quiroga 3 16.3 19,237 427 45
Morgan Stanley 4 19.8 23,312 1,665 14 Freshfields Bruckhaus Deringer 4 16.1 18,996 9,498 2
Barclays 5 19.3 22,731 11366 2 Cravath Swaine & Moore 5 15.9 18,735 9,367 2
Lazard Ltd 6 19.2 22,634 2,058 11 Slaughter and May 6 14.8 17,451 8,726 2
Banco Itau BBA SA 7 17.7 20,850 426 49 Blake Cassels & Graydon LLP 6 14.8 17,451 8,726 2
Goldman Sachs & Co 8 17.4 20,519 977 21 Alston & Bird LLP 8 14.6 17,231 17,231 1
Deutsche Bank AG 9 16.6 19,616 2,180 9 Bennett Jones LLP 8 14.6 17,231 17,231 1
Rothschild 10 13.0 15,282 899 17 Greenberg Traurig LLP 8 14.6 17,231 5,744 3

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15


Valuations
Prices Reflected Sluggish Deal Activity
An increase in deal volume in the second half and rising stock markets were not enough to lift overall valuation multiples for 2012. The
average premium for public targets fell from 30.6 percent to 29.6 percent, according to data compiled by Bloomberg.

Net Income 0-10%

10.01-25%
Free cashflow

25.01-50%
Ebitda
50.01-75%

Book value
75.01-100%
2011 2011
Revenue 2012 2012
>100%

0x 2x 4x 6x 8x 10x 12x 14x 16x 18x 20x 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

Five key valuation multiples fell in 2012 versus 2011. There were fewer very low and very high premiums and more deals
priced at 10 percent-50 percent over the target’s previous closing price.

PRIVATE EQUITY
LBO Volume Remained at Just a Fraction of 2006-2007 Levels
Leveraged buyout activity has not rebounded since the financial crisis. Still, some private equity firms such as Advent International
Corp., Apollo Global Management LP and Carlyle Group LP have continued to pursue large targets. Apollo announced three deals
worth more than $1 billion in 2012. Carlyle announced four over $3 billion, including by far the largest buyout ever of a Chinese com-
pany: Hong Kong-based video-screen advertising company Focus Media Holding Ltd.

Buyout Volume Eased from 2011 Largest LBOs of 2012
900 1800 VALUE
TARGET COUNTRY ACQUIRER
($MLN)
800 1600 EP Energy Global U.S. Apollo Global et al 7,150
← Value ($B)
700 1400 Cequel Communications U.S. CPP, BC Partners 6,580
Deals →
Annington Homes Britain Terra Firma Capital 5,091
600 1200
DuPont Performance Coatings U.S. Carlyle Group 4,900
500 1000 Primaris Retail REIT Canada Ontario Pension Board et al 4,079
Billions

Deals

400 800 United Technologies units U.S., Germany Carlyle Group, BC Partners 3,460
Focus Media Holding Hong Kong Carlyle Group et al 3,427
300 600
Getty Images U.S. Carlyle Group 3,300
200 400 TransUnion U.S. Advent Int'l, GS Capital Partners 3,000

100 200 AOT Bedding Super U.S. Advent International 2,404
Party City U.S. Thomas H Lee Partners 2,300
0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 McGraw-Hill Education U.S. Apollo Global Management 2,249
Source: Bloomberg Ahlsell Sweden CVC Capital Partners 2,404
Source: Bloomberg
Deal volume in 2012 was slightly below 2011 levels and the number of
buyouts fell to 700 from 913.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15


Sector analysis Click on orange arrows for interactive tables

China’s Energy Buys, Emerging-Markets Food & Drink and U.S. Health Insurers Mark 2012
China was a significant net buyer of energy assets in 2012, emerging markets food and drink was in focus as global companies sought
growth and U.S. President Barack Obama’s health care program sparked consolidation in the health insurance sector.

Diversified, Telecom Command Highest Premiums N. American Targets Dominate Telecom Deals
$700 70%
Announced deal value $Bln (lhs)
Telecom Targets by Region Regional Flow of Funds
$600
Announced premium % (rhs)
60% LatAm- Mid-East, Africa in Telecom Deals ($B)
Caribbean $13.9B
$500 50% $870M
North
$400 40%
America
Billions

$300 30% Asia-Paciﬁc Europe
$16.49B
$200 20% Middle
North East/Africa
Europe America
$100 10%
$27B Asia-
$94.76B
Paciﬁc
$0 0%
Latin
America

-$50 $0 $0 $50

Click on bars for interactive features Source: Bloomberg

Financials, consumer goods and energy led in deal volumes. The highest October saw Softbank buy a $37.8 billion stake in Sprint Nextel and
average premiums were in diversified industries and communications. MetroPCS’s merger with Deutsche Telekom’s T-Mobile USA.

China Emerges as Energy Acquirer Drinks, Health Feature in Consumer Non-Cyclicals
VALUE DEAL
TARGET ACquirer seller
Top Energy Acquirers Top Energy Targets ($Bln) STATUS
Grupo Modelo SAB AB InBev NV 17.23 Pending
Fraser and Neave Ltd. OUE Ltd. 12.68 Pending
Pfizer Nutrition Nestle SA Pfizer Inc. 11.85 Complete
U.S.
$96.26B $95.32B Ralcorp Holdings Inc. ConAgra Foods Inc. 6.66 Pending
$128.14B $127.81B Russia
China Alliance Boots GmbH Walgreen Co KKR & Co LP 6.60 Complete
$15.40B Canada Amylin Pharma LLC Bristol-Myers Squibb Co. 6.49 Complete
$13.72B
India Brisa Auto-Estradas SA Tagus Holding Sarl 5.78 Pending
$31.45B $58.03B Australia
$58.06B Actavis Group HF Watson Pharma Inc. Novator EHF 5.61 Complete
$62.27B
$45.75B Others
$14.55B Gavilon Group LLC Marubeni Corp. Soros FM LLC 5.60 Pending
Coventry Health Care Inc. Aetna Inc. 5.59 Pending
Amerigroup Corp. WellPoint Inc. 4.56 Complete
Lincare Holdings Inc Linde AG 4.40 Complete
Source: Bloomberg
Source: Bloomberg
Cnooc’s $17.4 billion agreed offer for Canada’s Nexen helped make AB InBev sought growth in Mexico; Heineken and Kirin competed for the
China the third largest energy acquirer in 2012. drinks units of Singapore’s Fraser & Neave.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15


Trends
Asian Buyers Emerge as a Major Factor in Global M&A
China has emerged as a big driver of global M&A over the past six years. Chinese companies came to the fore just as the financial crisis
curbed mergers in much of the rest of the world, and Chinese buying, both domestic and foreign, has held at a fairly constant level since
2007. (The chart below left includes both Mainland and Hong Kong acquirers.)
Japanese companies have re-emerged as major players as they see overseas acquisitions as a vehicle to sustain growth, and the yen’s
rise against the dollar since 2009 has made foreign expansion more attractive.

Chinese Corporate Acquisitions Foreign Acquisitions by Japanese Companies
$60 Softbank $37B 70
$160 ← Deal volume ($B)
investment in Sprint-
$/yen (inverted scale) → Nextel 80
$140 $50
Target outside China & Hong Kong
Includes Softbank's 90
$120
$40 $37.8 billion investment in
Target in China & Hong Kong Sprint-Nextel
$100 100
$30
$80
Billions

110

$60 $20
120
$40 $10 130
$20
$0 140
$-
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Japanese acquirers, global targets ex Japan

Chinese corporate purchases, domestic and foreign, have remained A rising yen through mid-2012 and slow domestic growth prospects have
steady through the financial crisis and after. spurred outbound Japanese dealmaking.

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