An Acuris Company Finding the opportunities in mergers and acquisitions Global & Regional M&A Report Q1-Q3 2018 Including League Tables of Legal Advisors mergermarket.com An Acuris Company Content Overview 3 Global 4 Europe 9 US 14 Latin America 19 AsiaPacific (excl. Japan) 24 Japan 29 Middle East & Africa 34 M&A and PE League Tables 39 Criteria & Contacts 74 mergermarket.com Mergermarket Global & Regional Global Overview 3 M&A Report Q1 VTB Global Overview Regional M&A Comparison North America US$ 1.25tn +26.5% vs. YTD 17 Inbound US$ 179.3bn -17% Outbound US$ 269.2bn -7.1% EMU US$ 303.4bn +25.7% Latin America US$ 55.9bn +5.1% vs. YTD 17 Inbound US$ 24.6bn -10.1% 29.1% Outbound US$ 1.9bn -74.9% Ind. & Chem. US$ 21.9bn +151.2% Europe US$ 792.7bn +21.3% vs. YTD 17 45.7% 1.1% Inbound US$ 381.4bn +36.9% 20.3% Outbound US$ 148.2bn -14.5% PMB US$ 136.5bn +116.4% 1.7% MEA US$ 46.7bn -8.7% vs. YTD 17 Inbound US$ 32.7bn -4.2% Outbound US$ 20.8bn -42.1% EMU US$ 14.7bn +59% APac (ex. Japan) US$ 551.7bn +22.3% vs. YTD 17 Inbound US$ 78.3bn +25.9% 2.1% Outbound US$ 128.9bn +73.9% Ind. & Chem. US$ 93.1bn +51.6% Japan US$ 30.7bn -10.4% vs. YTD 17 Inbound US$ 1.9bn -89.6% Global M&A US$ 2.72tn +22.3% vs. YTD 2017 Outbound US$ 128.1bn +130.1% Technology US$ 7.4bn -43.2% Cross-border US$ 1.05tn +11.0% vs. YTD 2017 The % values on the map indicate Top sector: EMU US$ 541.5bn +36.8% vs. YTD 2017 market shares in global M&A mergermarket.com MMeerrggeerrmmaarrkkeett Global & Regional Global Analysis 4 M&A Report Q1-Q3 2018 Global Value Deal details US$ 2.72tn (US$bn) Announce- Bidder company Target company Target Target sector ment date geography 79.7 8-May-18 Takeda Pharmaceutical Shire Plc Republic of Pharma, Medical & Company Limited Ireland Biotech Value of M&A in Q1-Q3 2018, 22.3% ahead of YTD 2017 67.6 8-Mar-18 Cigna Corporation Express Scripts USA Business Services Holding Company 60.8 29-Apr-18 T-Mobile USA Inc Sprint Corporation USA Telecoms -35.4% 32 59.6 01-Aug-18 Energy Transfer Energy Transfer USA Energy, Mining & Equity LP Partners LP Utilities (97.64% Stake) Value decrease from Number of megadeals 51.5 25-Apr-18 Comcast Corporation Sky Plc United Media Kingdom Q2 2018 to Q3 2018 (> US$ 10bn) announced this year, two more than the 2017 total mergermarket.com Mergermarket Global & Regional Global Analysis 5 M&A Report Q1-Q3 2018 Global “Following a frenetic first half • Following a frenetic first half of the year, Q3 saw subdued • Changing consumer habits continue to impact corporate M&A activity as growing geopolitical tensions, trade wars and decision making, highlighted by two of the most high-profile of the year, Q3 saw subdued protectionism dampened spirits and caused corporates to deals to occur in Q3. Coca-Cola’s US$ 5.1bn acquisition of pause over the summer. A total US$ 703.2bn changed hands Costa and the US$ 3.2bn takeover of SodaStream by PepsiCo M&A activity as growing in Q3, the lowest quarterly value since Q1 2016 (US$ 627.9bn) demonstrate how increasing consumer health-consciousness and 35.4% lower than Q2 (US$ 1.09tn). There was a distinct and environmental ethics have caused firms to rethink existing geopolitical tensions, trade lack of big-ticket deals conducted over the last three months, business models with moves towards healthier and greener which dominated the headlines in H1. Just four deals worth options. They represent the largest respective leisure and wars and protectionism more than US$ 10bn were recorded during the third quarter consumer deals in Q3. The trend looks set to continue, as after 28 such deals were announced in H1. The largest deal Coca-Cola and Pepsi are also among those reportedly set dampened spirits and conducted in the last three months saw Energy Transfer to bid for GlaxoSmithKline’s nutritional foods unit, which is Equity acquire 97.64% of Energy Transfer Partners for US$ expected to be sold for more than US$ 4bn. Following a caused corporates to 59.6bn. Yet despite the quarterly drop in activity, 2018 has to stellar 2017 (US$ 380.8bn, 2248 deals), the Consumer sector date registered the second highest value on record behind has failed to quite live up to the heights so far this year (US$ pause over the summer” 2007 (US$ 2.94tn) and with US$ 2.72tn across 13,575 deals 181.4bn, 1,409 deals). announced so far. • While the majority of sectors have seen laboured activity • With macro events playing a larger part in steering in the last three months, the Energy, Mining & Utilities (EMU) M&A this year, companies have continued looking closer sector has gone from strength to strength, recording the Jonathan Klonowski, to home instead of conducting high-profile cross-border fifth consecutive quarter over US$ 100bn. The US$ 194.9bn deals. With tariffs introduced by the US and China and announced in Q3 represented the highest quarterly value Research Editor (EMEA) political protectionism creeping further into deal making in the sector since Q4 2016 (US$ 250.5bn) and pushed the considerations, advisors are having to contend with much YTD figure to US$ 541.5bn – already surpassing the full-year harsher conditions. This is now leading corporates to 2017 value (US$ 531.7bn). Confidence appears to be rife at consider more defensive domestic consolidation, bulking up the moment with the sector appearing to be towards the top in challenging times, while the deals will receive much lower of the cycle, particularly in the US. A total of US$ 123.8bn levels of scrutiny. Consequently, domestic M&A increased by (85 deals) was spent on US EMU assets in Q3, accounting 30.6% on YTD 2017 to US$ 1.67tn – its highest YTD value on for a 63.6% share of the sector’s global value, with four of record. The US dominated global M&A once again, drawing in the five largest deals in the sector targeting the US. Trump’s 47.5% of the global Q3 value, almost seven percentage points pro-fossil fuel rhetoric and rising commodity prices appear to higher than that seen in 2017 (40.9%), with US$ 333.9bn be pushing the sector towards its highest full-year value on announced in Q3. This pushed the country’s YTD value to US$ record. 1.14tn, 25.7% higher than YTD 2017 and the second highest YTD figure on Mergermarket record. mergermarket.com Mergermarket Global & Regional Global Analysis 6 M&A Report Q1-Q3 2018 US$ 703.2bn 14.6% 2.4x Industrials & Chemicals (US$ Media M&A (US$ 111.2bn) increase vs Q3 2018 value, the lowest Q3 355bn) value increase compared to YTD 2017 (US$ 46.5bn) YTD 2017 (US$ 309.7bn) figure since 2013 (US$ 656.9bn) US$ 541.5bn 38.6% 30.6% Value of Energy, Mining & Utilities M&A, already 1.8% higher than the full-year 2017 value Cross-border share of global M&A, Domestic M&A value (US$ 1.67tn) four percentage points lower than increase vs YTD 2017, reaching its in YTD 2017 highest YTD value on record mergermarket.com Mergermarket.com Mergermarket Global & Regional Global Analysis 7 M&A Report Q1-Q3 2018 Chart title 1 Chart title 1 ChaGrlto tbitalel Q2uarterly Breakdown Trend ChGarlto tbitalle S 2ector Breakdown Trend 2013 - 2018 Q1-Q3 2017 vs Q1-Q3 2018 1100 20000 4000 1000 18000 3500 900 1,199.6 16000 800 3000 824.7 985.1 14000 933.3 700 2500 12000 n) n) 703.2 $b 600 b S e (US$ 2000 570.3 853.3 870.3 10000 Deal C alue (U 500 al Valu 873.3 718.0 8000 ount Deal V De 1500 400 1088.3 656.9 1,039.6 751.0 6000 300 963.7 1000 741.9 560.4 4000 200 500 931.6 570.7 760.6 627.9 758.1 2000 100 444.0 0 0 0 2013 2014 2015 2016 2017 2018 Energy, Industrials Technology Pharma, Business Other Mining & Utilities & Chemicals Medical Services & Biotech Q1 Q2 Q3 Q4 Q1-Q3 2017 Q1-Q3 2018 Deal Count mergermarket.com Mergermarket Global & Regional Global Analysis 8 M&A Report Q1-Q3 2018 Global League tables Legal advisor league table by value Ranking Q1-Q3 2018 Q1-Q3 2017 Regional ranking comparison Q1-Q3 Q1-Q3 Company name Value Deal % Value Value Europe US Asia Japan Middle Latin 2018 2017 (US$m) count change (US$m) Pacific East & America Africa 1 3 Davis Polk & Wardwell 360,087 99 15.6% 311,562 3 9 13 6 3 2 2 8 Freshfields Bruckhaus Deringer 352,677 154 56.8% 224,933 1 13 3 44 17 224 3 7 Latham & Watkins 343,198 237 43.5% 239,238 8 4 41 2 34 21 4 1 Skadden Arps Slate Meagher & Flom 332,039 145 -9.9% 368,553 22 1 51 16 86 52 5 6 Cleary Gottlieb Steen & Hamilton 321,108 68 24.2% 258,479 15 5 55 17 1 6 6 11 Linklaters 294,521 137 42.2% 207,117 2 36 5 7 13 14 7 5 Sullivan & Cromwell 288,883 115 7.2% 269,536 27 3 6 28 16 50 8 10 White & Case 279,086 175 31.2% 212,724 37 6 75 20 12 7 9 13 Wachtell, Lipton, Rosen & Katz 277,347 62 53.6% 180,568 76 2 61 25 11 - 10 9 Simpson Thacher & Bartlett 267,805 113 25.5% 213,429 38 7 12 24 81 26 11 4 Cravath, Swaine & Moore 264,642 50 -13.8% 307,104 24 8 63 22 25 222 12 22 Fried Frank Harris Shriver & Jacobson 239,864 64 154.7% 94,183 13 12 25 1 10 - 13 24 Allen & Overy 224,581 202 151.6% 89,258 7 26 9 26 14 81 14 20 Herbert Smith Freehills 218,846 135 86.9% 117,103 6 23 2 46 18 33 15 2 Kirkland & Ellis 208,088 416 -39.5% 344,015 19 10 19 45 40 111 16 15 Clifford Chance 203,035 162 29.3% 156,988 5 29 17 66 5 97 17 14 Weil Gotshal & Manges 192,408 166 11.0% 173,366 36 11 42 14 2 16 18 23 Slaughter and May 190,388 44 105.2% 92,770 4 40 27 9 44 - 19 18 Gibson Dunn & Crutcher 163,678 90 34.8% 121,456 25 20 26 27 24 82 20 35 DLA Piper 151,650 394 124.5% 67,536 20 24 60 19 49 28 mergermarket.com Mergermarket Global & Regional Europe Analysis 9 M&A Report Q1-Q3 2018 Europe Value Deal details US$ 139.1bn (US$bn) Announce- Bidder company Target company Target Target sector ment date geography 79.7 8-May-18 Takeda Pharmaceutical Shire Plc Republic of Pharma, Medical & Company Limited Ireland Biotech M&A targeting Europe in Q3, 63.8% down versus 51.5 25-Apr-18 Comcast Corporation Sky Plc UK Media Q2 (US$ 384.7bn) 46.6 12-Mar-18 E.ON SE innogy SE Germany Energy, Mining & Utilities 21.3% 19.8% 39.6 23-Mar-18 Consortium formed by Abertis Spain Construction ACS SA, Atlantia SpA Infraestructuras SA and Hochtief AG YTD value (US$ 792.7bn) European share of global 27.4 11-May-18 China Three Gorges Energias de Portugal Energy, Mining & Coporation Portugal SA Utilities increase compared to M&A value in Q3, the (76.73% Stake) YTD 2017 (US$ 653.3bn) lowest quarterly figure since Q2 2009 (19.7%) mergermarket.com Mergermarket Global & Regional Europe Analysis 10 M&A Report Q1-Q3 2018 Europe “Private equity was a • While traditionally a slow quarter for the continent, • In contrast to global trends, cross-border M&A has been European M&A faltered significantly in Q3, recording the much more active than domestic activity. Foreign investment rare bright spot in Q3, as lowest quarterly value since Q1 2013 (US$ 136.3bn). The last has driven European dealmaking over the summer, with intra- three months saw US$ 139.1bn change hands across 1,428 European activity stuttering. Of the top ten deals targeting investors look to deploy deals, 63.8% lower than the US$ 384.7bn and 1,951 deals the continent, nine were conducted by foreign investors in post-crisis record set in Q2. After an opening six months Q3, including CK Hutchison’s US$ 9.5bn acquisition of 50% the vast amounts of dry- littered with blockbuster transactions, the third quarter saw in Wind Tre, and the US$ 6.7bn takeover of Jardine Lloyd no megadeals (> US$ 10bn) take place, the largest being US$ Thompson by Marsh & McLennan. Asian and US investments powder still available” 9.5bn, meaning Europe represents just 19.8% of global M&A took the lion’s share, together accounting for 43.3% of the – its lowest quarterly share since Q2 2009 (19.7%). While region’s YTD M&A value. Following six consecutive quarters political uncertainty has been the ‘new norm’ for a number above the US$ 100bn mark, intra-European M&A slipped of years in Europe, the wider geopolitical trend appears to to US$ 59bn in Q3. This represented a 58.9% drop in value Jonathan Klonowski, have caused corporates to take stock over the summer – and compared to the US$ 143.6bn recorded in Q2. It was the how Brexit negotiations conclude and the future relationship lowest Q3 value since the financial crisis. Research Editor (EMEA) between the UK and the rest of the EU will undoubtedly be • Private equity activity was a rare bright spot in Q3, as closely observed. investors look to deploy the vast amounts of dry-powder • Europe’s three largest markets all recorded values dropping still available. The US$ 37.4bn (289 buyouts) recorded in by more than half versus those seen in Q1 and Q2 – with Q3 means Europe has seen more than US$ 25bn spent France, Germany and the UK all failing to retain the heights by private equity firms in each of the last eight successive set earlier in the year. Combined, they represent 44.1% of quarters. There were eleven buyouts worth at least US$ 1bn European M&A value this year resulting in the significant announced in Q3, including Global Infrastructure Partners’ fall in the continent’s M&A figures. There still appears to be US$ 5.9bn 50% takeover of North Sea off-shore wind farm, a number of high-profile situations in the pipeline, which Hornsea 1, from Orsted. Sponsors are increasingly looking will comfort dealmakers. For example, CVC has reportedly towards listed targets in order to find value and there were Barclays, Credit Suisse and Bank of America Merrill Lynch do three multi-billion take-private transactions recorded in Q3. work on its duel-track exit of Domestic & General, thought to The largest saw Morgan Stanley Infrastructure offer to acquire be worth over US$ 3bn. Whether Q3 was simply a blip, or is the remaining 71% stake in German rail logistics firm VTG for a glimpse of a more prolonged downturn remains to be seen, US$ 3.2bn. and European dealmakers will keep a watchful eye over how the continent finishes the year. mergermarket.com