Advisory Board

  • Cai Hongbin
  • Peking University Guanghua School of Management
  • Peter Clarke
  • Barry Diller
  • IAC/InterActiveCorp
  • Fu Chengyu
  • China National Petrochemical Corporation (Sinopec Group)
  • Richard J. Gnodde
  • Goldman Sachs International
  • Lodewijk Hijmans van den Bergh
  • De Brauw Blackstone Westbroek N.V.
  • Jiang Jianqing
  • Industrial and Commercial Bank of China, Ltd. (ICBC)
  • Handel Lee
  • King & Wood Mallesons
  • Richard Li
  • PCCW Limited
  • Pacific Century Group
  • Liew Mun Leong
  • CapitaLand Limited
  • Martin Lipton
  • New York University
  • Wachtell, Lipton, Rosen & Katz
  • Liu Mingkang
  • China Banking Regulatory Commission (CBRC)
  • Dinesh C. Paliwal
  • Harman International Industries
  • Leon Pasternak
  • Bank of America Merrill Lynch
  • Tim Payne
  • Brunswick Group
  • Joseph R. Perella
  • Perella Weinberg Partners
  • Baron David de Rothschild
  • N M Rothschild & Sons Limited
  • Dilhan Pillay Sandrasegara
  • Temasek Holdings
  • Shao Ning
  • State-owned Assets Supervision and Administration Commission of the State Council of China (SASAC)
  • John W. Snow
  • Cerberus Capital Management, L.P.
  • Former U.S. Secretary of Treasury
  • Bharat Vasani
  • Tata Group
  • Wang Junfeng
  • King & Wood Mallesons
  • Wang Kejin
  • China Banking Regulatory Commission (CBRC)
  • Wei Jiafu
  • China Ocean Shipping Group Company (COSCO)
  • Yang Chao
  • China Life Insurance Co. Ltd.
  • Zhu Min
  • International Monetary Fund

Legal Roundtable

  • Dimitry Afanasiev
  • Egorov Puginsky Afanasiev and Partners (Moscow)
  • William T. Allen
  • NYU Stern School of Business
  • Wachtell, Lipton, Rosen & Katz (New York)
  • Johan Aalto
  • Hannes Snellman Attorneys Ltd (Finland)
  • Nigel P. G. Boardman
  • Slaughter and May (London)
  • Willem J.L. Calkoen
  • NautaDutilh N.V. (Rotterdam)
  • Peter Callens
  • Loyens & Loeff (Brussels)
  • Bertrand Cardi
  • Darrois Villey Maillot & Brochier (Paris)
  • Santiago Carregal
  • Marval, O’Farrell & Mairal (Buenos Aires)
  • Martín Carrizosa
  • Philippi Prietocarrizosa & Uría (Bogotá)
  • Carlos G. Cordero G.
  • Aleman, Cordero, Galindo & Lee (Panama)
  • Ewen Crouch
  • Allens (Sydney)
  • Adam O. Emmerich
  • Wachtell, Lipton, Rosen & Katz (New York)
  • Rachel Eng
  • WongPartnership (Singapore)
  • Sergio Erede
  • BonelliErede (Milan)
  • Kenichi Fujinawa
  • Nagashima Ohno & Tsunematsu (Tokyo)
  • Manuel Galicia Romero
  • Galicia Abogados (Mexico City)
  • Danny Gilbert
  • Gilbert + Tobin (Sydney)
  • Vladimíra Glatzová
  • Glatzová & Co. (Prague)
  • Juan Miguel Goenechea
  • Uría Menéndez (Madrid)
  • Andrey A. Goltsblat
  • Goltsblat BLP (Moscow)
  • Juan Francisco Gutiérrez I.
  • Philippi Prietocarrizosa & Uría (Santiago)
  • Fang He
  • Jun He Law Offices (Beijing)
  • Christian Herbst
  • Schönherr (Vienna)
  • Lodewijk Hijmans van den Bergh
  • Royal Ahold (Amsterdam)
  • Hein Hooghoudt
  • NautaDutilh N.V. (Amsterdam)
  • Sameer Huda
  • Hadef & Partners (Dubai)
  • Masakazu Iwakura
  • Nishimura & Asahi (Tokyo)
  • Christof Jäckle
  • Hengeler Mueller (Frankfurt)
  • Michael Mervyn Katz
  • Edward Nathan Sonnenbergs (Johannesburg)
  • Handel Lee
  • King & Wood Mallesons (Beijing)
  • Martin Lipton
  • Wachtell, Lipton, Rosen & Katz (New York)
  • Alain Maillot
  • Darrois Villey Maillot Brochier (Paris)
  • Antônio Corrêa Meyer
  • Machado, Meyer, Sendacz e Opice (São Paulo)
  • Sergio Michelsen Jaramillo
  • Brigard & Urrutia (Bogotá)
  • Zia Mody
  • AZB & Partners (Mumbai)
  • Christopher Murray
  • Osler (Toronto)
  • Francisco Antunes Maciel Müssnich
  • Barbosa, Müssnich & Aragão (Rio de Janeiro)
  • I. Berl Nadler
  • Davies Ward Phillips & Vineberg LLP (Toronto)
  • Umberto Nicodano
  • BonelliErede (Milan)
  • Brian O'Gorman
  • Arthur Cox (Dublin)
  • Robin Panovka
  • Wachtell, Lipton, Rosen & Katz (New York)
  • Sang-Yeol Park
  • Park & Partners (Seoul)
  • José Antonio Payet Puccio
  • Payet Rey Cauvi (Lima)
  • Kees Peijster
  • COFRA Holding AG (Zug)
  • Juan Martín Perrotto
  • Uría & Menéndez (Madrid/Beijing)
  • Philip Podzebenko
  • Herbert Smith Freehills (Sydney)
  • Geert Potjewijd
  • De Brauw Blackstone Westbroek (Amsterdam/Beijing)
  • Qi Adam Li
  • Jun He Law Offices (Shanghai)
  • Biörn Riese
  • Mannheimer Swartling (Stockholm)
  • Mark Rigotti
  • Herbert Smith Freehills (Sydney)
  • Rafael Robles Miaja
  • Robles Miaja (Mexico City)
  • Alberto Saravalle
  • BonelliErede (Milan)
  • Maximilian Schiessl
  • Hengeler Mueller (Düsseldorf)
  • Cyril S. Shroff
  • Cyril Amarchand Mangaldas (Mumbai)
  • Shardul S. Shroff
  • Shardul Amarchand Mangaldas & Co.(New Delhi)
  • Klaus Søgaard
  • Gorrissen Federspiel (Denmark)
  • Ezekiel Solomon
  • Allens (Sydney)
  • Emanuel P. Strehle
  • Hengeler Mueller (Munich)
  • David E. Tadmor
  • Tadmor & Co. (Tel Aviv)
  • Kevin J. Thomson
  • Barrick Gold Corporation (Toronto)
  • Yu Wakae
  • Nagashima Ohno & Tsunematsu (Tokyo)
  • Wang Junfeng
  • King & Wood Mallesons (Beijing)
  • Tomasz Wardynski
  • Wardynski & Partners (Warsaw)
  • Rolf Watter
  • Bär & Karrer AG (Zürich)
  • Xiao Wei
  • Jun He Law Offices (Beijing)
  • Xu Ping
  • King & Wood Mallesons (Beijing)
  • Shuji Yanase
  • OK Corporation (Tokyo)
  • Alvin Yeo
  • WongPartnership LLP (Singapore)

Founding Directors

  • William T. Allen
  • NYU Stern School of Business
  • Wachtell, Lipton, Rosen & Katz
  • Nigel P.G. Boardman
  • Slaughter and May
  • Cai Hongbin
  • Peking University Guanghua School of Management
  • Adam O. Emmerich
  • Wachtell, Lipton, Rosen & Katz
  • Robin Panovka
  • Wachtell, Lipton, Rosen & Katz
  • Peter Williamson
  • Cambridge Judge Business School
  • Franny Yao
  • Ernst & Young

Trends & Statistics

GLOBAL STATISTICAL UPDATE – XBMA Quarterly Review for First Quarter 2017

Editors’ Note: The XBMA Review is published on a quarterly basis in order to facilitate a deeper understanding of trends and developments. In order to facilitate meaningful comparisons, the Review has utilized generally consistent metrics and sources of data since inception. We welcome feedback and suggestions for improving the XBMA Review or for interpreting the data.

Executive Summary/Highlights:

  • Global M&A volume in Q1 totaled approximately US$778 billion, approximately 10% higher than Q1 2016, marking the second highest Q1 since 2011.
  • Cross-border M&A activity accounted for 43% of global deal volume in Q1, above 2016 levels, and led by activity in the Materials and Healthcare sectors.  Five of the 10 largest deals in Q1 were cross-border transactions.
  • European M&A activity accounted for almost 29% of deal volume in Q1, up substantially from recent levels, whereas Chinese and U.S. M&A accounted for smaller percentages of global deal volume than in recent years.
  • The Energy & Power sector accounted for over US$665 billion in global deal volume over the past 12 months, exceeding by nearly $190 billion and retaking the lead from the High Technology sector.
  • However, the Materials sector accounted for the largest share of cross-border M&A activity over the past 12 months, exceeding US$230 billion, with cross-border deals accounting for 59% of global deal volume in this sector.  Cross-border deals also drove deal activity in the Consumer Staples sector, representing 71% of total M&A activity.

Click here to see the Review.

The views expressed herein are solely those of the author and have not been endorsed, confirmed, or approved by XBMA or any of the editors of XBMA Forum, nor by XBMA’s founders, members, contributors, academic partners, advisory board members, or others. No inference to the contrary should be drawn.

GLOBAL M&A STATISTICAL UPDATE – XBMA Annual Review for 2016

Editors’ Note: The XBMA Review is published on a quarterly basis in order to facilitate a deeper understanding of trends and developments. In order to facilitate meaningful comparisons, the Review has utilized generally consistent metrics and sources of data since inception. We welcome feedback and suggestions for improving the XBMA Review or for interpreting the data.

Executive Summary/Highlights: 

  • Global M&A activity had a slow start and a strong finish in 2016, totaling nearly US$3.7 trillion, posting the second strongest year since the financial crisis (lower only than 2015).
  • 2016 also accounted for the second highest cross-border deal volume (US$1.4 trillion) since the financial crisis, with cross-border deals announced in 2016 accounting for six out of the 10 largest deals of the year.
  • 2016 had its share of “megadeals,” albeit trailing 2015 levels, with 45 deals over $10 billion (compared to 69 in 2015) and four deals over $50 billion (compared to 10 in 2015).
  • Drivers of the robust activity – including large cross-border transactions – included consolidation in several sectors, increasingly scarce opportunities for organic growth, high acquirer stock prices, and the continued availability of low-cost acquisition financing. The slower pace relative to 2015 may have been attributable to political uncertainty arising from the U.S. elections, the near-term possibility of U.S. interest rate increases from their prolonged and historical lows, uncertainty about the economic impact of Brexit on the United Kingdom and the European Union, and the record volume of deals that were withdrawn or terminated due to regulatory issues.
  • The Technology sector’s share of deal volume has surged since 2012, approaching levels (nearly 15%) last seen in 2000. Technology drove a much larger share of cross-border deal-making in 2016 relative to prior years, jumping from approximately 5% to over 10%, and including such notable deals as SoftBank/ARM.
  • Q4 2016 was the second most active quarter since the financial crisis, with more than US$1.2 trillion in deals announced, including six of the ten largest deals of 2016, and two of the three largest deals of 2016. Interestingly and unpredictably, Q4 represented a nearly 50% surge over Q3 deal volume.  Through the first three quarters of 2016, annualized M&A volume was trending lower than each of 2008 and 2014, before overtaking them in Q4 and transforming 2016 from a relatively moderate post-crisis year to the second most active.

Click here to see the Review

The views expressed herein are solely those of the author and have not been endorsed, confirmed, or approved by XBMA or any of the editors of XBMA Forum, nor by XBMA’s founders, members, contributors, academic partners, advisory board members, or others. No inference to the contrary should be drawn.

AUSTRALIAN UPDATE – deal landscape, origin of bidders and deal structures

Editors’ Note: This report was contributed by Philip Podzebenko, a member of XBMA’s legal roundtable. Mr Podzebenko is a partner at Herbert Smith Freehills in the Corporate Group. This paper was based on research conducted by other Herbert Smith Freehills staff, Paul Branston, Partner and Sophie Mony de Kerloy, Solicitor.

 

Highlights

  • The Australian public M&A market has seen steady activity levels, with modest growth in deal volumes (by value) in the 12 months to 30 June 2016 (FY16).
  • Success rates have remained steady, with 73% of deals announced in FY16 being completed.
  • The level of contested bid activity rebounded in FY16 with 6 targets attracting multiple bidders.
  • The industrials and utilities sectors dominated activity, with deals in those sectors comprising 70% of deal value.
  • Inbound public M&A remained steady, but with a significant increase in bid activity originating from North America.

Deal landscape

Levels of public M&A activity in FY16 remained steady, with 50 deals announced and $33 billion committed by bidders, compared with 55 deals announced and $28 billion committed in the previous 12 months. The proportion of deals exceeding $1 billion remained steady, with 6 deals announced in this category in FY16, including one contested bid (compared with 7 in FY15), and deals in this category accounting for 80% of all deal activity by value.

Success rates also remained steady in FY16 at 73% (FY15, 70%).

Overall, the proportion of bids launched in FY16 without support from the target board from the outset (45%) was consistent with previous years (FY15, 44%). Of the unsolicited bids, 61% were ultimately successful. All of the unsolicited bids which were successful were recommended by the target board (either in the board’s initial response, or following negotiations). None of the unsolicited bids which were resisted by the target board throughout the bid period were successful.

The number of contested bids rebounded in FY16, with 7 targets the subject of multiple bidders, up from 2 targets attracting competing bids in FY15. In each of the cases where a competing bid announced in FY16 has completed, the overbidder has been successful. Encouraging a competing bidder has been an effective strategy for target boards confronted by an unsatisfactory bid.

 

success-rates-in-hostile-and-friendly-deals

Merger and acquisition activity in the industrials and utilities sectors featured strongly in FY16, representing $23.3b (70%) of overall deal value. In contrast, challenging business conditions in the energy and resources sectors, which were characterised by low commodity prices in oil, iron ore and coal, slow growth and uncertainty, affected the level of deal activity, with these sectors contributing only $1.1b to total deal value.

Private equity participation remained steady in FY16, with 18% of deals involving private equity bidders (FY15, 18%), although target values were larger. Consistently with broader trends in the market, private equity acquirers bid across a range of industry sectors.

 

Origin of bidders

Foreign bidders accounted for 44% of all deals in FY16, by value. This represents a slight increase in funds committed by foreign bidders in FY16 relative to FY15. Unlike previous years, foreign bidder activity was not concentrated in energy and resources, with foreign bidders being active in the industrials and utilities sectors.

North American bidders were more prominent in FY16 than in previous years, with 27% of all bidders coming from North America (FY15, 15% ), representing 40% of all deals by value. North American bidders were particularly active in larger transactions, with 3 of the 6 deals exceeding $1bn involving North American bidders.

 

percentage-of-deals-by-origin-of-bidder

Deal structure

The preference for schemes of arrangement remained steady in FY16, with 44% of all deals involving schemes, compared with 45% in FY15. The use of schemes continued to dominate transactions exceeding $1 billion, with 86% of deals in this category implemented by scheme.

Cash consideration continued to feature prominently in FY16, and was the sole form of consideration in 62% of transactions (up from 58% in FY15). There was a strong preference for cash consideration in unsolicited deals, with 80% of all unsolicited bids being cash-only or having an all-cash alternative.

 

success-rates-by-consideration-offered-in-hostile-deals

Bids with cash-only consideration were more successful in FY16 than in the FY13-15 period, with cash-only bids (including both friendly and hostile bids) having an 80% success rate overall.

FY16 saw a further increase in deals involving an initial premium in the 20-40% range (46%), as well as an increase in bids offering an initial premium exceeding 40%.

Success rates in FY16 continued FY15’s trend, showing a positive correlation between size of premium and bid success, with bids involving an initial premium in the 20-40% range having a 70% success rate, and those with an initial premium exceeding 40% having a 92% success rate.

Consistently with previous practice, material adverse change conditions continued to be included in the majority of bids and conditional deals. However the continued increase in the use of carve outs from the material adverse change conditions for external factors such as changes in law or accounting policy,  general economic conditions, industry conditions and stock markets reflect that bidders are more willing to accept commercial risk when making a bid.

Deal protection mechanisms continued to feature in negotiated transactions, with an increase in toe-holds during FY16, compensating for a decrease in other forms of lock-up from target shareholders. ‘Truth in takeovers’ statements (being public statements of intent to accept or otherwise support a bid by target shareholders) remained the preferred form of lock-up, with 75% of lock-ups taking the form of truth in takeovers statements only, despite Takeovers Panel guidance raising concerns that such statements have been misused as lock-up structures.

Notification and matching rights continued to their popularity with notification and matching rights being found in 100% and 93% respectively of negotiated deals. Use of break fees and reverse break fees also increased, with 86% of negotiated deals having a break fee and 32% of deals also having a reverse break fee.

The views expressed herein are solely those of the author and have not been endorsed, confirmed, or approved by XBMA or any of the editors of XBMA Forum, nor by XBMA’s founders, members, contributors, academic partners, advisory board members, or others. No inference to the contrary should be drawn.

GLOBAL STATISTICAL UPDATE – XBMA Quarterly Review for Third Quarter 2016

Editors’ Note:  The XBMA Review is published on a quarterly basis in order to facilitate a deeper understanding of trends and developments.  In order to facilitate meaningful comparisons, the Review has utilized generally consistent metrics and sources of data since inception.  We welcome feedback and suggestions for improving the XBMA Review or for interpreting the data.

Executive Summary/Highlights:

  • Global M&A volume in Q3 totaled approximately US$800 billion, approximately 10% lower than Q2, and over 10% higher than Q1.
  • At its current rate, global M&A volume for 2016 is on pace to reach US$3.2 trillion, approximately the level reached in 2014 but considerably lower than the record levels of 2015.
  • Q3 saw a number of blockbuster deals, including three of the four largest deals in 2016 —the Bayer/Monsanto, Enbridge/Spectra and SoftBank/ARM transactions — all of which were cross-border transactions.
  • Cross-border M&A activity accounted for 43% of global deal volume in Q3, up substantially from 31% in Q2. Four of the 10 largest deals in Q3 were cross-border transactions.
  • European and Chinese M&A activity each accounted for just under 20% of Q3 deal volume, up slightly relative to Q2 and higher than overall levels from 2011-2015.
  • Deals involving U.S. targets accounted for less than 40% of the quarter’s deal volume, below the 50% (or greater) level that has recently prevailed.
  • Global M&A — including large cross-border transactions — is being driven by consolidation in several sectors, search for scale (particularly in new markets), and low-cost acquisition financing.  The slower pace relative to 2015 might be attributable to political uncertainty arising from the U.S. election, the near-term possibility of U.S. interest rate increases from their historical lows, and uncertainty about the economic impact of Brexit on the U.K. and the European Union.

Click here to see the Review.

The views expressed herein are solely those of the author and have not been endorsed, confirmed, or approved by XBMA or any of the editors of XBMA Forum, nor by XBMA’s founders, members, contributors, academic partners, advisory board members, or others. No inference to the contrary should be drawn.

CANADIAN UPDATE – Shareholder Activism and Proxy Contests: Issues and Trends

Editors’ Note:  This article was produced by partners Patricia L. Olasker, J. Alexander Moore and Jennifer F. Longhurst of Davies Ward Phillips & Vineberg LLP. It was submitted to XBMA by Davies partner Berl Nadler who is a member of XBMA’s Legal Roundtable.

Executive Summary: The year 2015 was significant for proxy contests in Canada, with a total of 55 contests, exceeding the previous record high of 43 contests set in 2009. Although the spike in the number of contests in 2015 may have been exceptional, coinciding with a period of economic downturn in Canada and continued deterioration in commodity markets, the number of activist contests has shown a relatively steady trend upward, from single digit occurrences in the early-to-mid 2000s to 30, 32 and 30 contests in 2012, 2013 and 2014, respectively. Backed by these numbers, a consensus has formed that shareholder activism has established itself as a permanent feature in the landscape of Canadian corporate governance.

The number of proxy contests alone is not the full measure of the extent of shareholder activism. Past public successes by activists have motivated boards of public companies to engage with activists privately and to implement changes where a convincing case is made by the activist without the dispute ever entering the public arena. In addition, the influence of activists, coupled with the increased focus of regulators, investors and other market participants on corporate governance and shareholder democracy, has prompted many public companies to be proactive in addressing perceived problems in their governance or performance in an effort to ward off activist overtures even before they emerge.

This article discusses activism trends in Canada and some of the principal issues and challenges faced by both activists and target companies. It also highlights notable differences between Canadian and U.S. activist campaigns and the legal environment in which activists operate. Topics include the following:

  • The Right to Requisition a Shareholders’ Meeting
  • Stake-Building and Beneficial Ownership Reporting
  • Competition/Antitrust Legislation
  • Group Formation: Insider Trading and Joint Actor Characterization
  • Poison Pills
  • Selective Disclosure
  • Voting Shares Acquired After the Record Date
  • Empty Voting
  • Classified Boards
  • Short Slate Proposals
  • Limited Private Proxy Solicitation and Advance Notice Bylaws
  • Public Proxy Solicitation and the Broadcast Exemption
  • Compensation Arrangements for Director Nominees
  • Proxy Access: Nominations for Directors Through Shareholder Proposals
  • Universal Proxy
  • Vote Buying: Soliciting Dealer Fees in Proxy Contests
  • Regulatory Developments with Respect to Proxy Advisory Firms

Click here to read the article.

The views expressed herein are solely those of the author and have not been endorsed, confirmed, or approved by XBMA or any of the editors of XBMA Forum, nor by XBMA’s founders, members, contributors, academic partners, advisory board members, or others. No inference to the contrary should be drawn.

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