China Flexes Its M&A Muscles

Julyl 15 - N.Y. Times Blog - The Olympics will give China a chance to celebrate its status as a political and economic heavyweight. The games also come as the Asian nation has been raising its profile in the deal-making business.

While the volume of mergers and acquisitions around the world was down 30 percent in the first half of the year compared with the same time in 2007, transaction volumes were actually up 5 percent in Asia, in large part because of aggressive buying by Chinese companies. Read More.

Private equity Asia – the market today

June 23 - FinanceAsia.com - Asia has been an area of focus for a number of global and local private equity players for many years. The credit crunch has prompted an even larger number of financial sponsors from the US and Europe, and the advisers who look to work with them, to ramp up their Asian presence and make it a key market for their business. Of course, simply increasing presence and capital available in Asia will not be enough for private equity players to succeed in the region.

Asia continues to present some formidable challenges to private equity investment. While these vary from country to country, generally speaking they include a combination of cultural, commercial and regulatory factors that get in the way of successfully investing and successfully exiting in a time honoured fashion. In many markets, and in particular in the two markets which dominate Asian investing - China and India - this means that even the basic LBO deal model that has served private equity so well in the US and Europe often cannot be used. Having said that, certain innovative (and highly structured) solutions have been developed to overcome this issue in India. Read More.

M&A Activity Down but Not Out: Strong Cross-Border Deal Environment, Middle Market and Corporate Deal Activity and Robust Sectors Bolster M&A Market

June 16 - PRNewswire - With approximately US$1 trillion in global deal volume recorded during the first 19 weeks of 2008 vs. US$1.4 trillion during the same time last year, total transaction volume so far in 2008 has fallen below the record highs of 2007. However, merger and acquisition activity is expected to stabilize throughout the remainder of 2008 and the first half of 2009, according to Ernst & Young LLP's Transaction Advisory Services group.

"PE firms and corporations still remain armed with tremendous arsenals of cash to conduct transactions once the lending environment is restored,"said John O'Neill, Ernst & Young's Americas Director of Private Equity. "Once the overhang from the credit crunch is gone and lenders return to the transactions table and sellers adjust to more rational price expectations, we expect to see this cash funneled directly into the deal market." Read More.

Analytics to see rise in M&A activities

June 16 - Business Standard (India) - Market research and analytics, a relatively new entrant into the knowledge process outsourcing industry, is expected to witness a spate of mergers and acquisitions in the coming days.

The M&A activity in the area will see companies acquiring small and niche players in the US and Europe to improve their front-end capabilities and consolidation in the domestic market, largely dominated by over 110 small-size companies in the revenue bracket of $2-$10 million. Read More.

Transportation/logistics M&A not on track to match 2007 levels

May 16 - Stockhouse - Both deal volume and value in the transportation and logistics industry declined during the first quarter of 2008, according to the PricewaterhouseCoopers LLP Q1 2008 edition of Intersections: Global Transportation & Logistics Mergers and Acquisitions Analysis. Global deal activity is not on track to match the levels seen in 2007; however, the 45 deals (worth at least $50 million each) announced in the first quarter is on track to exceed 2006 levels.The credit markets and slowing deal activity in the United States significantly affected deal volume in the first quarter of the year. When excluding deals in which a U.S. entity was the acquirer or target, the number of deals (38 deals) is on pace to exceed both 2006 and 2007 levels (119 and 142 deals respectively), indicating that a concern over an economic slowdown in the United States may be lowering the attractiveness of U.S. targets - as well as the willingness and ability of U.S. acquirers - to make deals, according to the PwC analysis. Read More.

M&A Deal Activity in Industrial Products Slows

May 14 - Modern Distribution Management - Weakness in the U.S. economy continues to affect M&A deal activity and value in the industrial products sectors, specifically industrial manufacturing, chemicals, and metals, according to a series of PricewaterhouseCoopers LLP first quarter M&A reports. While deal activity remains steady, deal volume and value is not on pace to exceed 2007 levels; however, the number of deals announced during the quarter is on track to meet or exceed 2006 levels.

The slowdown in the pace of large deals announced in the first quarter is a direct reflection of the difficult financing environment. Only the transportation & logistics sector is on pace to exceed the level of large deals in both 2006 and 2007. Deal interest for targets in Asia has been particularly strong during the quarter across each subsector. Additionally, the weak U.S. dollar is driving the increased interest in U.S. targets by cross-border acquirers. Read More.

India's Global M&A Boom

Indian corporations, established at home and seeking new markets, are flush with cash and spending it abroad. But have they gone overboard?

Bharti Airtel, India's largest telecom player, is in the midst of talks to acquire a 51% stake in South African telecom major MTN in a deal that could be worth $20 billion. It's unclear whether Bharti's bid will succeed, but plenty of other Indian companies have been on a global shopping spree. On May 1, Essar Steel Holdings announced its third overseas acquisition in a year—the Nasdaq-listed Esmark for $1.1 billion. In March, Tata Motors acquired Jaguar and Land Rover from Ford. And investment bankers say there are 10 more acquisitions by Indian companies in the pipeline over the next six months. Read More.

India comes of age in M&A, but not always smooth

May 9 - Reuters - Bharti Airtel's overtures towards South African telco MTN Group, which could lead to India's biggest foreign takeover, are a sign that big Indian firms are hungry for deals and undaunted by a global credit crisis that has dented M&A activity around the world.

While Bharti shares have been hit as analysts query the mobile firm's ability to fund a deal that could top $20 billion, few doubt there will be more acquisitions by increasingly outward-looking Indian firms.

"Indian corporates have come of age," said Pramit Jhaveri, head of investment banking at Citi India, which advised Tata Motors on its $2.3 billion buy of Ford Motor's Jaguar and Land Rover brands in March. Read More.

A little perspective on surging oil, mining, utility M&A

April 2 - Corporate Dealmaker Blog (The Deal) - While the world laments the death of M&A given the credit crunch, financial institutions crumbling and the gyrating stock market, oil and gas, power and mining deals are thriving. According to three separate reports over the past month by PricewaterhouseCoopers, M&A value levels were up .3% in the oil and gas industry last year to $292.2 billion, up 25% in power to $372.5 billion and up 18% in mining to $158.9 billion.

The figures aren't a big surprise, as demand for energy and natural resources in developing countries like China and India continues to grow and companies' profits continue to surge on record commodity prices. Read More.

US opposes M&A rules

March 31 - The Times of India (New Delhi) - The US has asked India to remove the problematic rule in its new competition law that requires foreign companies to obtain government approval for mergers and acquisitions, including those taking place outside the country. In a report submitted to the Congress, the US trade department has said it has taken up the issue with the Indian government to change the new regulation governing M&As under the amended Competition Act.

"The United States is working with industry, foreign governments, and Indian companies and industry groups to persuade the government to promulgate regulations under the new law to correct the most problematic aspects of the M&A provisions," the national trade estimate report 2008 has said. Read More.

The International Mergers & Acquisitions Review 2008 Will Provide A Far-Reaching Discussion And Analysis Of The Global M&A Market

March 27 - Business Wire - Research and Markets has announced the addition of “The International Mergers & Acquisitions Review 2008” to their offering.

The International Mergers & Acquisitions Review 2008 will provide a far-reaching discussion and analysis of the global M&A market, written by leading experts from investment banks, law firms and consultants. The next 12 months look like being eventful with several major M&A deals in the pipeline and increased activity returning to the sector.

The International Mergers & Acquisitions Review 2008 will provide the reader with a unique insight into the global M&A market by highlighting the opportunities as well as the pitfalls that face M&A practitioners in this ever changing dynamic arena. Read More.

Canadian banks scouting for buying opportunities

March 27 - Dealscape Blog (The Deal) - Outperforming their American rivals these days -- thanks to the U.S. credit crisis -- Canada's banks are on the prowl for acquisitions south of the border -- but don't expect them to ride to the aid of troubled U.S. banks. Reuters reported Wednesday that Royal Bank of Canada, the country's largest lender, is cautiously eyeing the M&A landscape to the south, though it is not interested in buying an investment or corporate bank, but rather wealth management and private banking.

"Yes, we are interested in being an opportunistic buyer, but not in the capital markets side of the business," RBC president and CEO Gordon Nixon told a Canadian financial services conference in Toronto. Although RBC is primarily looking at wealth managers, Nixon added, however, that banks are always considering large, transformational deals. Read More.

Many Middle Market Companies With Global Operations Have Found Success and Intend to Expand Overseas, KPMG Survey Finds

58 percent of US middle market execs surveyed plan to expand globally in next five years, with downturn in U.S. economy possibly accelerating rate of expansion

March 11 - PRNewswire - Overseas markets are proving fruitful for middle market companies and, facing a declining U.S. economy, many are intending to expand globally, according to a survey by KPMG LLP, the U.S. audit, tax and advisory firm.

KPMG's Global Enterprise Institute, dedicated to global middle market companies, surveyed 1,013 executives from middle market companies in 10 cities across the country in December and January to gauge success overseas, to assess plans for future expansion and to better understand key challenges and risks. In doing so, KPMG found that 58 percent of middle market executives plan to expand their global presence in the next five years, compared with 33 percent who expressed that they will maintain their current size. Read More.

Many Middle Market Companies With Global Operations Have Found Success and Intend to Expand Overseas, KPMG Survey Finds

March 11 - PRNewswire - Overseas markets are proving fruitful for middle market companies and, facing a declining U.S. economy, many are intending to expand globally, according to a survey by KPMG LLP, the U.S. audit, tax and advisory firm.

KPMG's Global Enterprise Institute, dedicated to global middle market companies, surveyed 1,013 executives from middle market companies in 10 cities across the country in December and January to gauge success overseas, to assess plans for future expansion and to better understand key challenges and risks. In doing so, KPMG found that 58 percent of middle market executives plan to expand their global presence in the next five years, compared with 33 percent who expressed that they will maintain their current size.

In addition, 41 percent of the surveyed executives felt that their company has been successful at achieving its global expansion objectives over the past two years, compared to 20 percent who indicated limited success. The global aspect of their business strategy was also expected to increase, with 39 percent indicating that global expansion is an integral part to their company's growth strategy. Read More.

Forget Those Big Deals (and Headlines): Private Equity Firms Are Shopping the Middle Market

March 5 - Knowledge@Wharton - Big buyout firms like the Blackstone Group and Kohlberg Kravis Roberts do headline-grabbing transactions and collect eye-popping paychecks. But when the economy slows down and lenders turn wary, those mega-deals are the first to dry up.

Meanwhile, the modest middle market -- typically deals in the $500 million to $1 billion range -- keeps plugging along, according to investors who gathered at the 2008 Wharton Private Equity Conference. These transactions may not get talked up on CNBC's "Squawk Box"or written about in Barron's, but they also don't depend on the availability of cheap credit and the lending appetite of big banks like Citigroup and Bank of America. In fact, the middle-market specialists who spoke on a panel titled, "Middle Market: Calmer Waters or Sea of Competition?" argued that they are, to some extent, insulated from the current credit crisis and other economic ups and downs. Read More.

RSM to conduct survey on SMEs

March 3 - The Star Online (Malaysia) - RSM Strategic Business Advisors Sdn Bhd plans to conduct a survey on Malaysian small and medium-sized enterprises (SMEs) and the middle market players by next month.

Executive director Girish Ramachandran said that having reported on the global front for middle enterprises, the local middle market enterprise survey was part of its efforts to create a value-added report in Malaysia.

“Our business strategy is to complement and drive the potential market growth of the local middle market enterprises,” he told StarBiz. Read More.

Cross-border M&As since 2002 to attract cap gains tax

March 1 - The Economic Times (India) - On the face of it, nothing seems to have changed for India Inc. Buoyant tax revenues and better compliance haven’t influenced the finance minister enough to prune the corporate tax rate, or even the surcharge. But, for overseas firms, acquiring companies in India just got costlier.

The FM may not have spelled it out in his speech, but the Budget fine-print reveals that the government has opened the doors for taxing cross-border deals. And that too with retrospective effect from June 2002.

The onus of paying capital gains tax on an acquisition in India will now rest with the buyer. The buyer is expected to deduct tax at source and failure to do so would leave him liable to pay the tax. Read More.

South Korea firms in quest for more M&A deals in U.S.

February 29 - Reuters - South Korean companies are hunting for U.S. acquisitions as subprime woes throw up opportunities to move into a market in which they would otherwise have to start from scratch, a senior investment banker said on Friday.

Demand ranges from manufacturers to banks and size from $100 million all the way up to $5 billion, ChunKee Lee, who leads Credit Suisse' South Korean operations, told Reuters in an interview.

"We do a lot of cross-border deals. Something that hadn't happened a few years ago," he said. "There are a lot of opportunities, particularly in the United States." Read More.

Why M&A Is Back, for Now

What's behind the new urge to merge? The November election, for starters

February 22 - BusinessWeek - Despite a credit crunch and recession worries, the dealmakers have returned to Wall Street.

Their current run includes Microsoft's $44 billion bid for Yahoo!. Major U.S. air carriers are reportedly talking about mega-mergers. And a wave of smaller deals has hit the headlines, including Reed Elsevier's $4 billion buyout of ChoicePoint.

So far it's a pale imitation of 2007, when private equity firms used cheap credit to gobble up company after company. That pumped up the stock market in the first half of the year, just before the credit crunch took it down again. Read More.

PE deals outnumber M&A transactions in Jan 2008: Study

February 25 - The Financial Express - Private equity placements are finding favour with India Inc with the number of such transactions surpassing that of merger and acquisition deals in the first month of this year.

Indian Companies announced as many as 60 private equity deals as against 56 M&A transactions, according to the data compiled by global consultancy firm Grant Thornton. However, the total value of PE deals was lower at 2.05 billion dollars compared to 3.01 billion dollars in M&As transactions. Read More.