Bloomberg Brief - Mergers Year End Supplement 2013

2013 Year end

review

Mergers

TIMeLINeHighlights of the year in M&A. Page 3

The YeAr AT A gLANCeDeal volumes and breakdowns by sector and region. Page 4

gLOBAL TOP 50The largest transactions. Page 5

BehIND The heADLINesAnalysis of deal size, valuations, investors’ reactions and terminated deals. Page 6

MArKeT DrIVers The background to this year’s deals: rising stock markets, cheap debt, a robust IPO mar-ket and cash-rich balance sheets. Page 8

regIONsActivity levels, sector breakdowns, top deals and advisers. — North America. Page 10 — Europe, Middle East & Africa. Page 11 — Asia Pacific. Page 12 — Latin America & Caribbean. Page 13

PrIVATe eQUITY New investments, exits by sale, financing and IPO exits. Page 14

JOhN MALONe’s BUsY YeAr The cable industry veteran was behind a string of the biggest deals in Europe and the U.S. A chart of Malone’s deals and attempted deals last year. Page 16

DeALMAKer PrOFILes Seven bankers who played key roles in major mergers in 2013. Page 17

CONTeNTs

INTrODUCTION

For the third year running, all the founda-tions seemed to be in place at the outset of 2013 for a surge in merger activity: rising stock prices, an abundance of cash on corporate balance sheets and financ-ing costs at historic lows. When the tallies were made, last year didn’t quite live up to its billing, with total deal volumes up only slightly year on year. Scratch the biggest deal of the year off the list — the long-expected $130 billion buyout by Verizon Communications Inc. of Vodafone Group Plc’s 45 percent stake in Verizon Wireless — and the yearly total would be down a hair from 2012 (page 4).

Still, there were signs of building mo-mentum, including more deals over $500 million, even if mega-deals were still few and far between (page 6). In the private

A Year That Didn’t Live Up to expectations

equity sphere, six new deals worth more than $5 billion were announced, up from three in each of the previous two years (page 14). The biggest, for HJ Heinz & Co. and Dell Inc., were far above that threshold, at $27.4 billion and $16.4 bil-lion, respectively.

In addition to rich stocks, cash and cheap debt, a third force was at work to stir up deals: activist investors. They made their presence felt in 2013, sometimes promoting transactions and other times opposing take-over offers they considered too stingy. The $6.7 billion buyout of BMC Software Inc. by Bain Capital LLC and Golden Gate Capi-tal in September grew out of a campaign by activist Paul Singer’s Elliott Management Corp. in 2012. Likewise, QEP Resources Inc. agreed in December to separate its

natural gas gathering and processing businesses, a goal of Jana Partners LLC, which disclosed a stake in October.

Consolidation in the telecommunica-tions industry in Europe and the U.S. in 2013 gave a lift to dealmaking. It shows every sign of continuing this year judg-ing by activity this month. John Malone-controlled Liberty Media Inc. and Charter Communications Inc., in which Liberty has a big stake, kicked off 2014 with hefty new offers for Sirius XM Holdings Inc. (the remaining 47 percent for $10.6 billion) and Time Warner Cable Inc. ($61.3 billion) (page 16).

Signs, perhaps, that 2014 will deliver on the promise of a return of large-scale dealmaking.

— John E. Morris

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Dec. 9: Sysco Corp. agreed to acquire US Foods from its private-equity owners.

NOTABLe 2013 M&A eVeNTs

Aug. 25: Amgen Inc. agreed to buy Onyx Pharmaceuticals Inc. in a $10.4 billion deal.

Aug. 9: America Movil SAB said it planned to buy the rest of Royal KPN NV for $10 billion.

APR.

Jan. 14: Bloomberg News reported that Dell Inc. held buyout talks with private-equity firms.

May 10: Icahn and Southeastern Asset Management Inc. proposed an alternative deal for Dell shareholders that would let them keep their equity stakes.

May 6: BMC Software Inc. agreed to be taken private by Bain Capital LLC and Golden Gate Capital in a $6.9 billion deal.

May 20: Yahoo! Inc. said it would buy Tumblr Inc. for about $1.1 billion.

May 29: Shuanghui International Holdings Ltd. agreed to acquire Smithfield Foods Inc. in the biggest Chinese takeover deal of a U.S. company.

June 24: Vodafone Group Plc won a bidding contest for Kabel Deutschland Holding AG, paying $10.1 billion.

June 27: Bloomberg News reported John Malone was exploring ways Charter Communications Inc. could acquire Time Warner Cable Inc.

July 15: Loblaw Cos. said it would buy Shoppers Drug Mart Corp. for about $12 billion.

July 29: Perrigo Co. agreed to buy Elan Corp. for $8.6 billion.

July 31: Bill Ackman’s Pershing Square Capital Management LP amassed a 9.8 percent stake in Air Products & Chemicals Inc., Ackman said.

Aug. 13: Carl Icahn said he built up a stake in Apple Inc. and discussed his support for a larger stock buyback with its Chief Executive Officer Tim Cook.

Sept. 23: BlackBerry Ltd. received a tentative buyout offer from a group led by Fairfax Financial Holdings Ltd that was terminated two months later.

Sept. 30: Blackstone Group LP’s Steve Schwarzman said in an interview that his 1994 decision to sell what’s now BlackRock Inc. was a “heroic mistake.”

Oct. 9: Men’s Wearhouse Inc. rejected a takeover offer from Jos. A. Bank Clothiers Inc.

Oct. 16: America Movil withdrew its offer for Royal KPN and determined it couldn’t expand its stake to more than 50 percent.

Oct. 30: Dell’s buyout by Michael Dell and Silver Lake was completed.

Nov. 1: Bloomberg News reported AT&T Inc. executives were preparing for a potential takeover of Vodafone Group Plc in 2014.

Nov. 12: American Airlines and US Airways reached an agreement with the U.S. Justice Department over the government’s bid to block their merger.

Feb. 5: Dell said it planned to go private in a leveraged buyout led by Michael Dell and Silver Lake Management LLC.

Feb. 6: Liberty Global Inc. agreed to buy Virgin Media Inc.

Feb. 14: Berkshire Hathaway Inc. and 3G Capital agreed to buy HJ Heinz Co. for about $23 billion. The same day, AMR Corp and US Airways Inc. announced their merger.

March 19: John Malone’s Liberty Media Corp. said it would buy more than 25 percent stake in Charter Communications Inc.

March 25: Dell said it got competing buyout proposals from Blackstone Group LP and Carl Icahn.

April 12: Joh. A. Benckiser SE said it would buy coffee roaster D.E. Master Blenders 1753 NV for about $10 billion.

April 15: Thermo Fisher Scientific Inc. agreed to buy Life Technologies Corp. for $13.6 billion.

Jan. 31: The U.S. Justice Department filed an antitrust suit to block Anheuser-Busch InBev NV’s takeover of Grupo Modelo SAB. The buyer made concessions and the deal was completed in June.

JAN. FEB. MAR.

MAy JuN.

AuG.

Sept. 3: Microsoft Corp. said it would buy Nokia Oyj’s handset business for $7.2 billion.

SEP.

OCT. NOV. DEC.

JuLy

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17


0%

20%

40%

60%

80%

100%

2007 2008 2009 2010 2011 2012 2013

Middle East &Africa

LatAm &Caribbean

Europe

Asia Pacific

North America

Source: Bloomberg

Deal Volume by Region

0%

20%

40%

60%

80%

100%

2007 2008 2009 2010 2011 2012 2013

Utilities

Technology

Industrial

Financial/RE

Energy

Diversified

Consumer Noncycl

Consumer Cycl

Communications

Basic Materials

Source: Bloomberg

Deal Volume by Sector

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

2007 2008 2009 2010 2011 2012 2013Source: Bloomberg DMON

Billi

ons

Verizon Wireless deal contributed

$130B

The Pace of DealmakingGlobal mergers and acquisitions value climbed just four percent last year as a single transaction pushed total M&A value ahead of the 2012 pace: Vodafone Group Plc’s $130 billion sale of its stake in Verizon Wireless to Verizon Communications Inc.

Verizon’s mega-deal with Vodafone was the largest M&A transac-tion in a decade, accounting for more than 5 percent of last year’s aggregate transaction value. If it hadn’t been announced last year, total M&A would have matched the $2.2 trillion worth of deals from 2010, the first full year of economic recovery after the global recession in 2009.

Although dealmaking hasn’t approached its 2006-2007 peak, it has remained steady, averaging about $2.3 trillion a year since the end of the economic downturn, keeping it ahead of the M&A activity levels of the early 2000s.

The energy sector accounted for a smaller portion of global trans-actions than it has in the past three years. None of last year’s 10 largest M&A moves were energy deals.

Communications deals made up a much larger share of last year’s activity. Aside from Verizon’s giant purchase, Liberty Global Plc bought Virgin Media Inc. for $21.6 billion and adver-tising companies Omnicom Group Inc. and Publicis Groupe SA agreed to combine.

Financial acquirers, rather than strategic buyers, made two of the year’s 10 biggest deals. Berkshire Hathaway Inc. and 3G Capital bought HJ Heinz Co. for $27.4 billion, while Michael Dell and Silver Lake Management LLC completed a $16.4 billion take-private of Dell Inc.

For a third year North America was the dominant region for deals, accounting for more than 40 percent of global activity. Nearly ev-ery transaction of $10 billion or more included a North American participant.

Among the largest exceptions were a pair of European telecom trades: Spain’s Telefonica SA agreed to buy the E-Plus German wireless unit of the Netherlands’ Royal KPN NV in a $11.3 bil-lion deal and Vodafone bought German cable operator Kabel Deutschland Holding AG for $11.2 billion.

The sale of Vodafone’s stake in Verizon Wireless Pushed 2013’s Total Ahead of 2012

The YeAr AT A gLANCe BY WILL ROBINSON

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17


gLOBAL TOP 50 Click on for deal advisers

ANNOUNCeD TArgeT COUNTrY TArgeT INDUsTrY ACQUIrer COUNTrY VALUe ($M)

9/2/13 Verizon Wireless (45% Vodafone stake) US Telecommunications Verizon Communications Inc US 130,100 2/14/13 HJ Heinz Co US Food Berkshire Hathaway, 3G Capital Multi 27,403 7/12/13 Caisse des Depots, Republic of France units FR Finance Bpifrance FR 23,406 2/5/13 Virgin Media Inc US Telecommunications Liberty Global PLC GB 21,627 7/28/13 Omnicom Group Inc US Advertising Publicis Groupe SA FR 19,420 2/12/13 NBCUniversal LLC US Media Comcast Corp US 16,700 2/5/13 Dell Inc US Computers MSD Capital LP, Silver Lake Mgmt US 16,436 4/15/13 Life Technologies Corp US Healthcare-Products Thermo Fisher Scientific Inc US 15,901 10/2/13 Portugal Telecom SGPS SA PT Telecommunications Oi SA BR 14,297 7/15/13 Shoppers Drug Mart Corp CA Retail Loblaw Cos Ltd CA 13,007 4/16/13 National Bank of Greece SA GR Banks Hellenic Financial Stability Fund GR 12,853 7/23/13 E-Plus Mobilfunk GmbH & Co KG DE Telecommunications Telefonica Deutschland Holding AG DE 11,296 6/24/13 Kabel Deutschland Holding AG DE Media Vodafone Group PLC GB 11,186 4/23/13 Piraeus Bank SA GR Banks Hellenic Financial Stability Fund GR 10,967 1/18/13 Orascom Construction Industries EG Engineering OCI NL 10,488 5/29/13 NV Energy Inc US Electric Berkshire Hathaway Inc US 10,366 10/23/13 Cole Real Estate Investment Inc US REITS American Realty Capital Properties Inc US 9,846 6/14/13 Taikang Asset Management Co Ltd CH Finance PetroChina Co Ltd CN 9,787 4/12/13 DE Master Blenders 1753 NV NL Beverages Joh A Benckiser SE AT 9,615 4/27/13 Former Fortis structured credit assets BE Finance Credit Suisse, Lone Star Funds Multi 8,723 5/27/13 Bausch & Lomb Inc US Healthcare-Products Valeant Pharmaceuticals Int'l Inc US 8,700 6/30/13 Onyx Pharmaceuticals Inc US Pharmaceuticals Amgen Inc US 8,531 12/9/13 US Foods Inc US Food Sysco Corp US 8,374 11/22/13 Galeao airport concession BR Infrastructure Odebrecht SA, Changi Airport Group etc BR 8,308 5/20/13 Warner Chilcott PLC IE Pharmaceuticals Actavis plc US 7,809 6/11/13 Eurobank Ergasias SA GR Banks Hellenic Financial Stability Fund GR 7,753 7/30/13 Health Management Associates Inc US Healthcare-Services Community Health Systems Inc US 7,527 6/3/13 Dubai Aluminium Co Ltd AE Metal Fabricate Emirates Aluminium Co Ltd AE 7,500 5/31/13 SM Land Inc PH Real Estate SM Prime Holdings Inc PH 7,330 9/3/13 Nokia's Devices & Services business FI Technology Microsoft Corp US 7,165 5/29/13 Smithfield Foods Inc US Food Shuanghui International Holdings Ltd HK 6,955 11/5/13 Maroc Telecom MA Telecommunications Emirates Telecommunications Corp AE 6,810 9/24/13 Tokyo Electron Ltd JP Semiconductors Applied Materials Inc US 6,794 5/6/13 BMC Software Inc US Software GIC Special Investments et al Multi 6,736 9/9/13 Molex Inc US Electrical Equip Koch Industries Inc US 6,528 12/9/13 BRE Properties Inc US REITS Essex Property Trust Inc US 6,334 7/29/13 Elan Corp PLC IE Pharmaceuticals Perrigo Co Plc US 6,199 9/9/13 Neiman Marcus Group LLC/The US Retail Canada Pension Plan Inv Bd, Ares Mgmt Multi 6,000 11/20/13 Eagle Ford assets US Energy Devon Energy Corp US 6,000 5/9/13 Alpha Bank AE GR Banks Hellenic Financial Stability Fund GR 5,994 7/26/13 Activision Blizzard Inc US Software Activision Blizzard Inc US 5,830 6/12/13 Canada Safeway Ltd CA Food Empire Co Ltd CA 5,694 10/10/13 PVR Partners LP US Pipelines Regency Energy Partners LP US 5,629 12/16/13 LSI Corp US Semiconductors Avago Technologies Ltd SG 5,596 7/2/13 Bank of Ayudhya PCL TH Banks Mitsubishi UFJ Financial Group Inc JP 5,505 7/2/13 Kashagan caspian oil project (8.4%) KZ Energy KazMunayGas National Co JSC KZ 5,400 4/12/13 Port Kembla, Port Botany AU Infrastructure Hesta AG, Industry Funds Mgmt Pty Ltd et al AU 5,325 12/16/13 International Lease Finance Corp US Finance AerCap Holdings NV NL 5,088 2/1/13 SNS REAAL NV NL Banks Kingdom of the Netherlands NL 5,058 9/30/13 Brookfield Office Properties Inc US Real Estate Brookfield Property Partners LP US 5,037

Source: Bloomberg

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17


http://www.bloomberg.com/quote/BAC:US

0x 2x 4x 6x 8x 10x 12x 14x 16x 18x 20x 22x

Revenue

Book value

Ebitda

Freecashflow

Net Income

Source: Bloomberg

2012 2013

2011

Valuations Rebounded After a Dip in 2012

-200%

0%

200%

400%

600%

800%$0-$50M$50M-$500M$500M-$5B>$5B

Source: Bloomberg

Rebased to Q1 2002

Change in number of deals:

Large-But-Not-Mega Deals Increased

0

10

20

30

40

50

$0

$250

$500

$750

$1,000

$1,250

$1,500>$5B$500M-$5B$50M-$500M$0-$50MDeals > $5B (right)

Source: Bloomberg

Billi

ons

Deal volume (left):

Source: Bloomberg

Billi

ons

Deal volume (left):

A Rise in Mega Deals Wasn’t SustainedThe number of deals worth more than $5 billion spiked during the second-quarter of last year to the highest in more than two years. Life Technologies Corp.’s $15.9 billion sale to Thermo Fisher Scientific Inc., Kabel Deutschland AG’s takeover and Berkshire Hathaway Inc.’s $10.4 billion purchase of NV Energy Inc. were among the large M&A deals announced between April and June.

The number of very large deals tapered off in the second half of the year.

Transactions between $500 million and $5 billion rose steadily as 2013 progressed. December alone featured 80 deals in that size range, versus just 60 in January.

The prices paid by buyers as measured by five key valuation multiples rebounded last year from a dip in 2012. Three of the five metrics — average multiples of net income, free cashflow and book value — were higher than they were in 2011 as well. Aver-age Ebitda and revenue multiples rose but didn’t match the level of two years earlier.

Analysis of Deal size Distributions, Valuation Multiples and Market reactions

BehIND The heADLINes BY JOhN E. MORRIS, WILL ROBINSON aNd aLIcIa LOONEY

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17


The Deals That Weren’t: Largest Deals Terminated Last year

-12

-10

-8

-6

-4

-2

0

2

4

6

North America ex Mexico

Europe

Source: Bloomberg MA

% c

hang

e on

ann

ounc

emen

t

Investors Continue to Reward AcquirersAcquirers benefitted, on average, when they announced deals, continuing a trend of the past two years. Sysco Corp. climbed 10 percent after it announced an $8.4 billion deal to buy uS Foods from private-equity firms KKR & Co. and Clayton, Dubil-ier & Rice LLC in September. After disclosing plans to purchase Virgin Media Inc., Liberty Global Plc rose more than 30 percent during the remainder of last year.

On average, North American companies that announced acquisi-tions saw their shares gain 2.8 percent in 2013 versus 2.7 percent the year before, according to data compiled by Bloomberg. In Europe last year the average gain after an announcement was 2.5 percent, up from 1.5 percent in 2012. The figures are based on acquirers with market capitalizations over $500 million.

Behind the headlines: analysis

ANNOUNCeD TerMINATeD TArgeT COUNTrY INDUsTrY ACQUIrer VALUe ($M)

4/15/13 6/18/13 Sprint US Telecommunications DISH Network 37,723

8/9/13 10/16/13 Royal KPN NL Telecommunications America Movil 22,695

3/25/13 4/19/13 Dell US Computers Blackstone Group et al 21,228

4/2/12 5/14/12 Avon US Cosmetics/Personal Care Joh A Benckiser 12,854

11/15/12 1/21/13 Fraser and Neave SG Beverages OUE, Orange Circle Investments 12,685

3/25/13 9/9/13 Dell US Computers Icahn Enterprises 10,380

3/20/13 4/11/13 Cole REIT US REITS American Realty Capital Properties 9,822

1/8/13 6/26/13 Clearwire US Telecommunications DISH Network 9,507

2/25/13 6/18/13 Elan IE Pharmaceuticals Royalty Pharma 7,777

8/6/12 3/1/13 Best Buy US Retail Richard Schulze 7,594

5/10/13 7/22/13 China Resources Gas HK Gas China Resources Power 7,065

Source: Bloomberg MA Deals announced in 2012 or 2013 and terminated in 2013

who’s buying who?

companies driving m&a in 2014: ma <g

o>

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17


$0

$200

$400

$600

$800

$1,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Middle-East & Africa Latin America

Asia Pacific Europe

North America

Source: Bloomberg

The IPO Market Offered an Alternative to M&A

0%

5%

10%

15%

20%

25%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

High Grade

High Yield

Source: Bank of America Merrill Lynch

Interest Rates Remained Low

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

2008 2009 2010 2011 2012 2013

S&P500 FTSE100

DAX HK Hang Seng

Source: Bloomberg

Change since Jan. 2008:

Stocks RoseU.S. and European stocks gained last year. The Standard & Poor’s 500 index climbed 30 percent last year. Germany’s DAX Index, an equity benchmark for Europe’s largest economy, rose about 25 percent.

Buyers also benefitted from cheap borrowing costs and plentiful credit.

HJ Heinz Co. obtained $14.1 billion in financing from JPMorgan Chase & Co. and Wells Fargo & Co. in February to support its buyout — the biggest financing to fund an acquisition since 2007.

Then Verizon Communications Inc. sold $49 billion of debt Sept. 11 in the biggest corporate bond deal ever to help it fund the buyout of Vodafone Group Plc’s Verizon Wireless stake.

Initial public offerings picked up in 2013 as M&A activity remained somewhat constant. The number of deals increased almost five percent from 2012 and aggregate value was the highest in three years. That provided exit routes for private-equity, venture-backed and other privately held companies that in other circumstances might have been sold.

Blackstone Group LP took Hilton Worldwide Holdings Inc. public in December, six years after acquiring it for $26 billion at the end of the buyout boom.

heady stock Markets, Cheap Debt, Mountain of Cash Didn’t Produce expected surge in M&A

MArKeT DrIVers cOMpILEd BY JOhN E. MORRIS, WILL ROBINSON, aNthONY FaSaNELLa aNd aLIcIa LOONEY

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17


$0$500

$1,000$1,500$2,000$2,500$3,000$3,500$4,000$4,500

Source: Bloomberg Cash and cash equivalents at U.S. companies at quarter ended.

Billi

ons

Source: Bloomberg

Billi

ons

+18% +6% +13%

Corporations Continued to Stockpile CashContinuing a trend that has held steady since the financial crisis, corporations accumulated more cash on their balance sheets that could, in theory, be used for acquisitions. American compa-nies reported $4.2 trillion of cash and cash equivalents on their books at the end of the third quarter, according to data compiled by Bloomberg. That was up 18 percent from a year earlier, and 40 percent higher than the total reported in September 2010.

0%

10%

20%

30%

40%

50%

60%

70%

80%

Proportion of all-cash deals


The Portion of All-Cash Deals Remained HighThe portion of deals paid for entirely in cash fell to 60.3 percent last year from a high of 66.3 percent in 2012. Still, that figure was high by historical standards. All-cash acquisitions peaked in the third and fourth quarters of 2012, when they accounted for more than 70 percent of all deals.

Market driVers

ma su<go>: top m&a buyers in europe: ma <

go

>

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17


15%

5%

4%

4%

3% 69%

Cellular telecom

Real estate

Computers

Oil E&P

Food

Other


NOrTh AMerICA

Telecoms, Media and Tech sectors Yielded the Biggest Deals

TArgeT ACQUIrer seLLer DeAL VALUe ($ MLN) PAYMeNT TYPe DeAL sTATUs

Verizon Wireless (Vodafone stake) Verizon Communications Inc Vodafone Group PLC 130,100 Cash, Stock & Debt Pending

HJ Heinz Co Berkshire Hathaway Inc, 3G Capital Inc - 27,403 Cash Complete

Omnicom Group Inc Publicis Groupe SA - 19,420 Stock Pending

NBCUniversal LLC Comcast Corp General Electric Co 16,700 Cash and Stock Complete

Dell Inc Michael Dell, Silver Lake Management LLC - 16,436 Cash Complete

Life Technologies Corp Thermo Fisher Scientific Inc - 15,901 Cash Pending

Shoppers Drug Mart Corp Loblaw Cos Ltd - 13,007 Cash or Stock Pending

NV Energy Inc Berkshire Hathaway Inc - 10,366 Cash Complete

Cole Real Estate Investment Inc American Realty Capital Properties Inc - 9,846 Cash or Stock Pending

Bausch & Lomb Inc Valeant Pharmaceuticals International Inc Warburg Pincus LLC et al 8,700 Cash CompleteSource: Bloomberg

Top Financial Advisers Top Legal Advisers

ADVIser rANK shAre (%)

TOTAL DeALs

($ MLN)

AVe DeAL

($ MLN)

DeAL COUNT

BofA Merrill Lynch 1 33.5 352,455 3,119 113

Goldman Sachs & Co 2 32.3 339,737 2,084 163

JP Morgan 3 31.6 331,956 2,573 129

Morgan Stanley 4 27.3 286,629 2,239 128

Barclays 5 25.1 264,245 2,565 103

UBS 6 18.8 197,803 3,470 57

Guggenheim Capital LLC 7 12.6 132,825 66,413 2

PJT Capital LLC 8 12.4 130,100 130,100 1

Citi 9 12.3 128,828 1,516 85

Deutsche Bank AG 10 11.2 118,130 2,188 54

Source: Bloomberg


TOTAL DeALs

($ MLN)

AVe DeAL

($ MLN)

DeAL COUNT

Wachtell Lipton Rosen & 1 28.0 294,402 4,600 64

Davis Polk & Wardwell 2 24.2 254,081 3,970 64

Simpson Thacher & Bartlett 3 24.0 252,760 2,319 109

Weil Gotshal & Manges LLP 4 22.5 236,973 2,418 98

Jones Day 5 18.0 189,401 799 237

Slaughter and May 6 17.6 185,338 26,477 7

Osler Hoskin & Harcourt LLP 7 17.0 178,944 1,924 93

Debevoise & Plimpton LLP 8 16.8 176,423 5,041 35

Latham & Watkins LLP 9 16.4 172,731 919 188

Hogan Lovells 10 16.1 168,743 3,245 52

Source: Bloomberg

0

5,000

10,000

15,000

$0

$500

$1,000

$1,500

$2,000 ← Value Deal count →

Source: Bloomberg

Billi

ons

Top 10 Deals

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17


8%

5%

5%

4%

3%

74%

Commercial banks

Telecoms

Real estate operations

Telephone - integrated

Finance - commercial

Other


eUrOPe, MIDDLe eAsT AND AFrICA

Bailouts, government Divestitures Topped even Biggest Telecoms Deals

TArgeT ACQUIrer seLLer DeAL VALUe ($ MLN)

PAYMeNT TYPe DeAL sTATUs

Investment operations Bpifrance (new entity) Caisse des Depots, Republic of France 23,406 Cash Complete

Virgin Media Inc Liberty Global PLC - 21,627 Cash and Stock Complete

Portugal Telecom SGPS SA Oi SA - 14,297 Stock Pending

National Bank of Greece SA Hellenic Financial Stability Fund - 12,853 Cash Complete

E-Plus Mobilfunk GmbH & Co KG Telefonica Deutschland Holding AG Koninklijke KPN NV 11,296 Cash and Stock Pending

Kabel Deutschland Holding AG Vodafone Group PLC - 11,186 Cash Complete

Piraeus Bank SA Hellenic Financial Stability Fund - 10,967 Cash Complete

Orascom Construction Industries OCI - 10,488 Cash or Stock Pending

DE Master Blenders 1753 NV Joh A Benckiser SE - 9,615 Cash Pending

RPI portfolio asset Credit Suisse Group, Lone Star Funds Royal Park Investments SA 8,723 Cash PendingSource: Bloomberg



TOTAL DeALs

($ MLN)

AVe DeAL

($ MLN)

DeAL COUNT

Goldman Sachs & Co 1 26.4 179,334 1,793 100

Morgan Stanley 2 22.7 154,596 1,982 78

JP Morgan 3 18.1 122,809 1,949 63

BNP Paribas Group 4 14.6 99,196 1,210 82

Barclays 5 13.9 94,423 1,475 64

Deutsche Bank AG 6 12.6 85,780 1,384 62

Citi 7 12.6 85,686 1,260 68

BofA Merrill Lynch 8 11.9 80,819 1,443 56

Lazard Ltd 9 11.7 79,453 946 84

Credit Suisse 10 10.3 70,371 1,257 56

Source: Bloomberg


TOTAL DeALs

($ MLN)

AVe DeAL

($ MLN)

DeAL COUNT

Linklaters LLP 1 14.8 99,323 588 169

Allen & Overy LLP 2 13.1 87,877 486 181

Freshfields Bruckhaus Deringer 3 12.1 81,241 454 179

Shearman & Sterling LLP 4 6.6 44,429 1,111 40

White & Case LLP 5 6.0 40,381 439 92

Bredin Prat 6 5.8 38,810 1,848 21

De Brauw Blackstone Westbroek 7 5.5 37,216 1,201 31

Clifford Chance LLP 8 5.4 36,309 288 126

Skadden Arps 9 5.2 35,076 1,032 34

Hengeler Mueller 10 5.2 35,053 1,252 28

Source: Bloomberg

0

2,000

4,000

6,000

8,000

10,000

12,000

$0

$300

$600

$900

$1,200

$1,500

$1,800 ← Value Deal count →

Source: Bloomberg

Billi

ons

Top 10 Deals

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17


11%

4% 3%

3%

3%

76%

Real estate operations

Commercial banks

Buildings

Investment cos.

Real estate mgmt

Other


AsIA PACIFIC

Consolidation in Property, energy and Financial sectors Pushed Up Volume Modestly



Taikang Asset Management Co Ltd PetroChina Co Ltd - 9,787 Cash Pending

SM Land Inc SM Prime Holdings Inc - 7,330 Stock Pending

Tokyo Electron Ltd Applied Materials Inc - 6,794 Stock Pending

Bank of Ayudhya PCL Mitsubishi UFJ Financial Group Inc - 5,505 Cash Complete

Kashagan caspian oil project KazMunayGas National Co JSC ConocoPhillips 5,400 Cash Complete

Port Kembla, Port Botany Australia Hesta AG, Industry Funds Mgmt Pty et al - 5,325 Cash Complete

Kashagan caspian oil project China National Petroleum Corp KazMunayGas National Co 5,000 Cash Pending

GD Midea Holding Co Ltd Midea Group Co Ltd - 4,924 Stock Complete

Beijing Xinwei Telecom Technology Co Beijing Zhongchuang Telecom Test Co - 4,393 Stock Pending

Siam Makro PCL CP ALL PCL SHV Holdings NV 4,083 Cash CompleteSource: Bloomberg



TOTAL DeALs

($ MLN)

AVe DeAL

($ MLN)

DeAL COUNT

Morgan Stanley 1 8.3 41,767 597 70

UBS 2 7.6 38,298 766 50

Goldman Sachs & Co 3 7.3 36,524 529 69

JP Morgan 4 6.1 30,712 749 41

Macquarie Group Ltd 5 4.9 24,734 538 46

BofA Merrill Lynch 6 4.5 22,802 671 34

Barclays 7 4.3 21,715 987 22

HSBC Bank PLC 8 4.2 21,178 784 27

Nomura Holdings Inc 9 3.5 17,611 210 84

CITIC Securities Co Ltd 10 3.4 17,243 663 26

Source: Bloomberg


TOTAL DeALs ($ MLN)

AVe DeAL

($ MLN)

DeAL COUNT

Nishimura & Asahi 1 5.8 29,193 343 85

Baker & McKenzie 2 5.1 25,515 287 89

Herbert Smith Freehills 3 5.0 25,091 358 70

King & Wood Mallesons 4 4.5 22,708 307 74

Mori Hamada & Matsumoto 5 4.3 21,897 153 143

Linklaters LLP 6 3.7 18,782 606 31

Allen & Overy LLP 7 3.7 18,514 343 54

Freshfields Bruckhaus Deringer 8 3.1 15,827 396 40

Allens 9 3.1 15,551 311 50

Kim & Chang 10 2.8 14,377 158 91

Source: Bloomberg

0

2,000

4,000

6,000

8,000

10,000

12,000

$0

$100

$200

$300

$400

$500

$600 ← Value Deal count →

Source: Bloomberg

Billi

ons

Top 10 Deals

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17


9%

7%

7%

7%

4% 67%

Airport development

Oil E&P

Investment cos.

Buildings

Schools

Other


LATIN AMerICA & CArIBBeAN

Deal Volumes slid for Third straight Year



Galeao airport concession Odebrecht SA, Changi Airport Group etc Republic of Brazil 8,308 Cash Pending

LNG Portfolio Royal Dutch Shell PLC Repsol SA 4,100 Cash Complete

Zenda & Seara Brasil assets JBS SA Marfrig Alimentos SA 2,726 Undisclosed Complete

Anhanguera Educacional Participacoes SA Kroton Educacional SA - 2,703 Stock Pending

Petrobras Energia Peru SA China National Petroleum Corp Petroleo Brasileiro SA 2,600 Undisclosed Pending

MMX Porto Sudeste Ltda Mubadala Development Co PJSC et al MMX Mineracao e Metalicos SA 2,246 Cash Pending

HSBC Panama Unit Bancolombia SA HSBC Holdings PLC 2,234 Cash Complete

Vale SA Cemig Geracao e Transmissao SA - 1,896 Undisclosed Pending

Spaipa S/A Industria Brasileira de Bebidas Coca-Cola Femsa SAB de CV - 1,855 Cash Complete

Diagnosticos da America SA Cromossomo Participacoes II SA - 1,855 Cash PendingSource: Bloomberg



TOTAL DeALs

($ MLN)

AVe DeAL

($ MLN)

DeAL COUNT

Credit Suisse 1 25.7 26,158 747 35

Banco BTG Pactual SA 2 18.4 18,745 329 57

Goldman Sachs & Co 3 16.4 16,692 879 19

Bradesco BBI SA 4 15.4 15,657 626 25

Banco Itau BBA SA 5 14.4 14,624 348 42

Citi 6 8.8 8,971 528 17

Morgan Stanley 7 8.2 8,306 519 16

Banco Santander SA 8 7.3 7,450 497 15

Deutsche Bank AG 9 6.8 6,921 769 9

BofA Merrill Lynch 10 6.7 6,847 527 13

Source: Bloomberg


TOTAL DeALs

($ MLN)

AVe DeAL

($ MLN)

DeAL COUNT

Souza Cescon Barrieu 1 17.2 17,520 531 33

Mattos Filho Veiga 2 9.8 10,020 244 41

Barbosa Mussnich 3 8.8 8,982 249 36

Linklaters LLP 4 8.0 8,127 903 9

Davis Polk & Wardwell 5 7.1 7,223 722 10

Pinheiro Neto Advogados 6 6.5 6,670 202 33

Lefosse Advogados 7 6.2 6,311 316 20

Sullivan & Cromwell 8 5.6 5,718 953 6

Skadden Arps 9 4.9 5,036 1,007 5

Stocche Forbes Padis 10 4.8 4,868 152 32

Source: Bloomberg

0

250

500

750

1,000

1,250

$0

$50

$100

$150

$200

$250 ← Value Deal count →

Source: Bloomberg

Billi

ons

Top 10 Deals

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17


$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

2009 2010 2011 2012 2013

Dividend payout

LBO

Source: Bloomberg

Billi

ons

Use of proceeds: 47% of total

Junk Debt Funded Dividends As Well As LBOs

0

150

300

450

600

750

900

$0

$50

$100

$150

$200

$250

$300

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

← Value

Exits →

Billi

ons Deals

Source: Bloomberg

Exits Via Sales Were Down

0

4

8

12

16

20

24

28

$0

$100

$200

$300

$400

$500

$600

$700

← Value - all deals

No. of deals >$5B →

Billi

ons Deals

Source: Bloomberg

Investments Continued at a Steady PacePrivate equity investment levels rose 18 percent last year from 2012, to $238 billion, their highest level since 2007, according to data compiled by Bloomberg. Still, deal volume was behind 2005 and just 36 percent of its 2007 peak.

One encouraging sign: Six deals worth more than $5 billion were announced last year, double the figures in 2011 and 2012. The list was led by the $27.4 billion purchase by Berkshire Hatha-way Inc. and 3G Capital Inc. of ketchup maker HJ Heinz Co.; the $16.4 billion take-private of computer maker Dell Inc. by its founder Michael Dell and Silver Lake Management LLC; and the $9.6 billion buyout of coffee blender D.E. Master Blenders 1753 NV by the German investment firm Joh A Benckiser S.E.

The value of private-equity-backed companies sold slid 26.5 percent last year after a 19 percent drop the year before. Instead, sponsors turned to refinancings (see next chart) or to initial public offerings (see next page) to realize profits.

Junk bond issuance in the U.S. hit a new high as yields fell to an all-time low (see chart on page 6).

While credit was readily available, nearly half of the leveraged finance obtained last year financed dividend payouts, not new acquisitions, according to data compiled by Bloomberg. Nearly $79 billion of new debt was used for dividends, or 47 percent of the total, the same percentage as in 2012. In 2009, the bottom of the market, only 13 percent went to payouts.

Private equity Firms Were slow to Invest and resorted to refinancings, IPOs to Cash Out

PrIVATe eQUITY cOMpILEd BY JOhN E. MORRIS

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17


PrICeD IssUer NAMe COUNTrY BACKers OFFer sIze (M)

10/15/13 Plains GP US Occidental Petroleum Corp, Energy & Minerals Group 2,912

12/11/13 Hilton Worldwide US Blackstone 2,706

10/9/13 Antero Resources US Antero Resources, Yorktown Partners, Warburg Pincus, Trilantic Capital Partners et al 1,802

11/8/13 Merlin Entertainments UK Kirkbi A/S, Blackstone, CVC Capital Partners 1,700

1/31/13 LEG Immobilien Germany Perry Capital, Whitehall Funds 1,527

6/12/13 Coty US JAB Holdings, Berkshire Partners, Rhone Capital 1,140

6/19/13 bpost Belgium CVC Capital Partners 1,120

8/13/13 Envision Healthcare US Clayton Dubilier & Rice 1,111

6/26/13 HD Supply US Carlyle, Bain Capital, Clayton Dubilier, THD Holdings et al 1,101

5/8/13 Quintiles Transnational US TPG Capital, Bain Capital, 3i Group, Aisling Capital, Temasek 1,089

Source: Bloomberg Does not include IPOs by venture-backed companies.

Selling Shares Rather Than Companies: Largest IPOs of Private-Equity-Backed Companies in 2013

PriVate equity

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One man has had a leading role in more mergers, attempted and complete, over the past year than any other: John Malone. Through his controlling stakes in two cable operators, Liberty Media Inc. and Lib-erty Global Plc, he has pressed the case for consolidation in the telecommunica-tions sector on both sides of the Atlantic. Since January 2013, his companies have spawned full takeover attempts for five telecommunications companies in the U.S., Britain, Germany and the Netherlands, and

took a substantial stake in a sixth — deals that, if completed, would be worth about $128 billion.

In Germany, after acquiring Kabel Baden-Wuerttemberg GmbH in 2011, Liberty Global took a run last year at Kabel Deutschland AG before Vodafone Group Plc outbid it with a $13.6 billion offer.

Frustrated in Germany, Malone turned his sights back to the Netherlands, build-ing up a position in Ziggo NV and now negotiating for a full takeover.

Back home in the U.S., he bought control of satellite radio operator Sirius XM Holdings Inc. in January 2013 and this month offered to buy the rest. Meanwhile, he is using cable operator Charter Communications Inc., in which he first invested last May, as a vehicle to launch an unsolicited $61.3 billion bid for the much larger Time Warner Cable Inc. this month.

— John E. Morris and Will Robinson

The Cable Industry Veteran Aims to reshape the sector on Two Continents

JOhN MALONe’s BUsY YeAr

JOHN MALONE

Gained control in Jan. 2013. Offered this month to buy remaining 47% for about $10.6B.

Purchased 27% stake from Apollo Global consortium in May for $2.6B.

Closed $21.6B takeover in June.

Bought initial 12.6% stake in March, then raised in stages. Talks for full takeover revived in December.

Discovery discussed bid for Scripps in November

Disclosed unsolicited $61.3B offer on Jan. 13, 2014

Lost out to Vodafone in bid-ding war. Final price: $13.6B.

Competition clearance for 2011 deal reversed by German court in August.

LibErty MEdiA COrp

Malone owns: 94.6% (class B)

disCOvEry COMMuNiCAtiONs iNC.93.1% (class B)

sirius XM HOLdiNgs iNC.

Liberty Media: 53.0%

CHArtEr COMMuNiCAtiONs iNC.

25.8%

ZiggO Nv

28.5%

sCripps NEtwOrk iNtErACtivE iNC.

virgiN MEdiA iNC.

Liberty Global: 100.0%

tiME wArNEr CAbLE iNC.

kAbEL dEutsCH-LANd HOLdiNg Ag

kAbEL bAdEN- wuErttEMbErg gMbH

LibErty gLObAL pLC 85.3% (class B)

Key:AcquisitionTarget

Source: Bloomberg News, Bloomberg MA

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17


DeALMAKer PrOFILes BY WILL ROBINSON

Blair EffronCenterview Partners LLCPartner and Co-founder Effron counseled global food products manufacturer HJ Heinz Co. on its $27.4 billion buyout by Warren Buffett’s Berkshire Hathaway Inc. and Jorge Paulo Lemann’s 3G Capital. The deal was announced in February and complet-ed in June. Effron also advised General Electric Co. on its $16.7 billion sale of its NBC Universal stake to Comcast Corp., which closed in March.

George LeeGoldman Sachs Group Inc. Chairman of the global technology, media and telecom group and chief information officer for the investment bank-ing divisionLee, who was the head of the TMT group last year, was named that unit’s chairman in January, as well as CIO for the investment bank. He worked with Dell Inc. on its leveraged buyout and helped Microsoft Corp. reach a deal in September to buy Nokia Oyj’s mobile-devices unit for $5.4 billion.

Jimmy LeeJPMorgan Chase & Co.Vice Chairman Lee worked with General Electric Co. as it sold the remainder of its NBC Universal stake to Comcast Corp. for $16.7 billion, and he advised the Dell board on its $16.4 billion buyout by Michael Dell and Silver Lake Manage-ment LLC. He also worked on Twitter Inc.’s initial public offering, which was announced in September and priced in November.

Ken MoelisMoelis & Co.Co-founder and CEOThe boutique banker worked with the HJ Heinz board committee on the ketchup maker’s $27.4 billion sale. He also advised Omnicom Group Inc. on its merger with Publicis Groupe SA. His firm is exploring an initial public of-fering, people with knowledge told Bloomberg News this month.

Paul TaubmanPJT Capital LLCPrincipalTaubman, a former Morgan Stanley banker who left the company in 2013, won a role as an independent adviser on the year’s largest M&A transaction, helping Verizon Communications Inc. on its its $130 billion purchase of Voda-fone Group Plc’s stake in their wireless joint venture. Taubman began PJT Capital LLC last year as part of his role as an individual adviser on Verizon’s deal with Vodafone.

Chris VentrescaJPMorgan Chase & Co.Global co-head of M&AVentresca advised Verizon Communications on deal with Vodafone and worked with Virgin Media Inc. on its $22 billion sale to Liberty Global Plc. JPMorgan named him co-head of global M&A in May along with Hernan Cris-terna. Ventresca previously ran North American M&A.

Antonio WeissLazard Ltd.Global head of investment bankingWeiss helped Berkshire Hathaway and 3G Capital secure their purchase of HJ Heinz. He also worked with D.E. Master Blenders 1753 NV on its $9.6 billion sale to Joh. A Benckiser SE, the investment arm of the billionaire Reimann family.

The Advisers Behind some of the Past Year’s Biggest Deals

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17


Date post:	08-May-2015
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Bloomberg Brief - Mergers Year End Supplement 2013

Economy & Finance