Groups » M&A Lawyers
M&A Activity
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Tom Mclain
Jul 24 2008, 12:52 PMAlthough this group is small, it is certainly diverse, with 6 members representing 5 different countries. I am interested in hearing about your personal view of the level of M&A activity in your jurisdiction.
From my persepctive in the Southeast region of the US, there is still deal activity, but the dollars amounts are relatively small. I would describe the transactions that I am seeing as strategic "fill-ins" - companies making acquisition to round out there business. There are larger deals out there, but they seem to be taking much longer to get traction.
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Prashant Bezboruah
Jul 24 2008, 04:24 PMM&A activity is growing in India. It was a little slow in 2007 but it seems like 2008 will be a good year for M&A in India. This would of course depend on the growth rate of the economy, further liberalization of the economy, increase in sectoral caps in certain industries and also inflation which is really high right now. However for the moment Capital Market transactions are not doing that well because of the stock market fluctuations. Lot of companies have decided to postpone their IPOs.
The trend is also moving in India towards outward M&A activity for example the $8 billion Tata Steel acquisition of Corus and the Tata bid for Jaguar. I see this increasing. A number of family run companies are now looking at outside investment and at divesting their stakes in favour of external investors. For example Ranbaxy.
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Jul 25 2008, 12:58 PMIn a deal that closed last month, I represented a Belgium company making an acquisition in the US. With the weakening dollar, I suspect that we will continue to see an increase in inbound transactions like that one. So, like Prashant, I suspect that there may be an up tick in cross-border transactions.
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Flavio Picchi
Aug 05 2008, 07:37 PMHere in Brazil, M&A activity is growing and growing. Despite the worldwide economic crisis - here reflected in losses at São Paulo Stock Exchange (73k points in May to 58k now) - many M&A opportunities are still here. In 2007 there were many IPOs, so Brazilian companies with intense activities in the internal market are capitalized and buying.
Presently, I working in a corporate aquisition of a highly-regulated industry Brazilian company by Japanese investors. The figures are not so high (a stake of USD 4MM), but it's the second deal I do in my own law firm - so this is an exciting professional achievement and a great professional challenge.
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Milena Hu
Aug 08 2008, 02:11 PMHello, Tom, Thank you for your invitation.
I am from Taiwan and served in a large computer manufacturing company as in-house counsel for several years. Now I am a new student in Chicago for LLM program at Northwestern University. The technology industrty in Taiwan is highly interested in M&A with companies in Taiwan, China or other countries around the world. I think it will not be difficult to find a compnany who wants to join in M&A, either to be the buyer or seller. It will not be difficult either to negotiate the price, if you have done a lot of research and try to find the solution to meet the both parties' demands. I think the most difficult issue is you have to figure out what is the real purpose of the both companies. To unite with other company for compete, to gain financial resources, or to sell out a company which is not capable to make profits? Sometimes it's really hard to find out the truth. Because everybody wears a mask, and there is a lot of mysteries hidden behind the financial statement and meetings.
Some M&A case of our company is evaluated by the society to be successful, I don't think so. Some is evaluated to be wrong, I am not sure. What is successful? What is wrong? It depends on what is the purpose that the company is going to pursue.
I am going to take the course M&A. Do you think it will be helpful to clarify my confusion? Or any of you could share your experience with me.
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Aug 11 2008, 01:25 PMMilena:
You sound as if you have a good grasp of M&A activity already, so I don't how my experience can help you. Nevertheless, let me comment on some of what you say from a US perspective.
Your summary of the reasons for M&A transactions is a good one. In my view, the buyer in transactions typically falls into one of two categories: strategic or financial. Strategic buyers are buyers that are already in the industry of the company they are acquiring or wish to move into that industry as a result of their business plan. Financial buyers are just looking for opportunities that will provide a return on their investment. Either type of buyer may be interested in a struggling or failing company because they see an opportunity to turn it around. In my experience, identifying the type of buyer is usually easy to do. However, as you point out, unraveling financial statements and determining the true value of a business can be difficult and takes a well-matched team of attorneys, accountants, and people with business expertise. In any event, whether you are representing the buyer or the seller, I think it is important to deduce as much as you can regarding the motivations of the other party.
As for the social implications of M&A transactions, the news media and Hollywood love to focus on the negative impacts of transactions – inevitably, someone will loose a job. In the US, serious public pressure against a transaction is relatively rare. Of course, transactions here are also subject to review by governmental authorities to insure that anti-competitive effects of the transaction are non-existent or insignificant.
Thank you for joining the M&A group and thank you for posting a comment. As I have mentioned, it would be wonderful if the M&A group became a good resource for its members. Feel free to post other comments her or contact me directly. Good luck with your LLM at Northwestern University.
Tom
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J. M.
Aug 27 2008, 04:25 PMHi everyone! I just found this article about the growing international M&A activity of Indian companies:
India Inc M&A volume surges to $17.8 bn
ONGC Videsh's takeover of Imperial Energy Corp has propelled the volume of India Inc's merger and acquisitions in the pipeline to $17.8 billion so far this year, says a report.
M&A volume of $17.8 billion is the second highest year-to-date volume on record after 2007, deal tracking firm Dealogic said in its report.
Corporate India had announced M&A deals worth $18.4 billion in the same period last year, it added.
The average deal size also witnessed a jump of 6 per cent. "The average deal size was 174 million dollars till date in 2008, while for the full year of 2007, it stood at $164 million," Dealogic analyst Kaushik Punjabi said.
"The acquisition of Imperial Energy Corp by ONGC Videsh for $2.6 billion was the largest Indian outbound deal this year and the third largest Indian outbound deal on record," Punjabi added.
A sectoral analysis of cross border deals shows that oil and gas was the most targeted industry by the Indian acquirers on cross border deal segment so far this year as it accounted for deals worth $3.2 billion.
Metal and steel followed suit with $2.6 billion and auto and truck was the third most targeted space.
The UK was the most targeted nation by India Inc in 2008 year-to-date, accounting deals worth $ billion.
While, the US was the second most targeted nation ($4.9 billion), followed by Spain ($1.4 billion).
http://www.business-standard.com/india/storypage.php?tp=on&a...[Edited Aug 27 2008]
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Karel Frielink
Aug 28 2008, 09:49 PMCuracao is just a tiny island in the Caribbean Sea. However, the Curacao tourism and hotel industry is booming and there are several foreign, strategic buyers/investors. My firm plays an important part in, e.g., the development of a large beach & golf resort (tax & corporate). The financial services industry is still growing. Tax treaties are negotiated and concluded to increase the competitiveness of the Netherlands Antilles. I expect to see an increase in M&A activity as well.
Karel
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Aug 28 2008, 11:17 PMHi
ONGC has been trying for a long time to acquire companies outside India. This is one time that they have been successful in such a big deal. I see much more happening from the Indian side in the world markets in 2008.
FYI I was also part of the team representing the Selling Shareholder in the divestment of part of the Government of India stake in ONGC. I was involved with the due diligence of the company and also drafting of certain sections of the offer document. It was one of the largest transactions I have ever worked on during my career. :)
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