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
  • Changi Airport Group
  • Martin Lipton
  • New York University
  • Wachtell, Lipton, Rosen & Katz
  • Liu Mingkang
  • China Banking Regulatory Commission (CBRC)
  • Dinesh C. Paliwal
  • Harman International Industries
  • Leon Pasternak
  • BCC Partners
  • Tim Payne
  • Brunswick Group
  • Joseph R. Perella
  • Perella Weinberg Partners
  • Baron David de Rothschild
  • N M Rothschild & Sons Limited
  • Dilhan Pillay Sandrasegara
  • Temasek International Pte. Ltd.
  • 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
  • Kazakhstan Potash Corporation Limited
  • 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
  • De Brauw Blackstone Westbroek N.V. (Amsterdam)
  • Hein Hooghoudt
  • NautaDutilh N.V. (Amsterdam)
  • Sameer Huda
  • Hadef & Partners (Dubai)
  • Masakazu Iwakura
  • TMI Associates (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
  • Jurie Advokat AB (Sweden)
  • 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)
  • 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


IRISH UPDATE – Recent Trends in Corporate Migrations

Editor’s Note:  Brian O’Gorman specialises in corporate finance with a particular emphasis on mergers and acquisitions, public takeovers, equity capital markets and private equity.  Suzanne Kearney is a professional support lawyer at Arthur Cox.

Over the past decade a global trend of optimising holding company structures has developed amongst publicly traded multinational corporations. The strategic relocation of a holding company is, more often than not, conducted in tandem with a merger or other significant M&A transaction.

Ireland, alongside other jurisdictions such as the United Kingdom and Switzerland, has emerged as an attractive location, particularly for corporations seeking to expand into Europe.


There are often complex corporate, commercial, regu­latory, operational and tax structuring implications associated with the re-organisation of a global business to a new jurisdiction. The legal mechanisms employed in implementing such relocations will be driven by a range of diverse factors. In this note we explore some of the more interesting structures employed in recent transactions.


The migration of public limited companies incorporated in a common law jurisdiction into Ireland in conjunction with a merger of other significant M&A transaction is often carried out by way of a court sanctioned scheme of arrangement (“Scheme”).

A Scheme is a statutory procedure whereby a company can (with court approval) make a compromise or arrangement with its shareholders (or a class of its shareholders). A Scheme has a wide scope for implementation, and lends itself to two separate methods for effecting a takeover of an existing (foreign) parent company by a new (Irish) parent company:

Cancellation Scheme: involves the shareholders of the existing (non-Irish) target agreeing to all of their shares in the target being cancelled in return for an agreed cash consideration per share being paid by the acquiring (Irish) company to such shareholders. The acquiring company agrees to pay the cash consideration on the basis that the target will use the reserve created by the cancellation of its existing shares to issue an identical number of new shares to the acquiring company.

Transfer Scheme: involves the shareholders of the target company agreeing to transfer all of their shares in the target to the acquiring company in return for an agreed cash purchase price per share being paid to such shareholders.

Structures involving a Scheme have been favoured by companies from the UK, Cayman, Bermudian and other common jurisdictions with legislation which caters for the use of a Scheme. This structure, however, is not available to entities who originate in a civil law jurisdiction, and, as a result, European companies have typically used a variety of other structures in connection with a migration to Ireland.

PaddyPower (Ireland) and Betfair (UK) ‘merged’ pursuant to a Scheme sanctioned by the High Court of England and Wales under UK company legislation, creating a new Irish holding company with headquarters in Ireland, having its main listing on the London Stock Exchange, with a secondary listing on the Irish Stock Exchange.


The EU Cross-Border Merger (“CBM”) regime facilitates mergers between Irish companies and EU incorporated companies (and companies incorporated in EEA States that have implemented the EU CBM Directive). The CBM regime permitted true “mergers” for the first time under Irish law, providing a new mechanism for Irish companies to receive a transfer of assets and liabilities from companies in other European/EEA jurisdictions.

European limited companies that are capable of merger under national law can merge into Irish registered companies as a CBM, with the merging company dissolved without going into liquidation on completion of the merger. Shareholder approval is required, followed by court applications by the merging companies in their respective jurisdictions. A CBM into Ireland takes effect pursuant to an order of the Irish High Court. In a CBM all of the assets and liabilities, together with the rights and obligations (including commercial contracts, employees, legal proceedings) of the merging company transfer to the Irish surviving company by operation of law.

A key advantage of a CBM is that it provides a harmonised, streamlined and often familiar procedure for European companies, eliminating the need for individual transfer documents typical under the traditional business sale and purchase model.

Flamel Technologies SA (France), completed CBM into its wholly-owned Irish subsidiary, Avadel Pharmaceuticals plc, with Avadel surviving the merger as the public holding company.

In the UK, the merger of Technip and FMC Technologies into UK incorporated TechnipFMC was achieved by CBM.

In 2017 the High Court of England and Wales authorised the first “reverse cross border merger” whereby a UK parent company, Formenta Limited, was absorbed by its Italian subsidiary.


Only entities incorporated in EU/EEA member states can avail of the CBM regime (see above), however “mergers” by non-EU entities into Irish companies have been structured as a merger agreement pursuant to which the non-EU entity contractually agrees to merge into a newly incorporated Irish public limited company, which becomes the surviving entity post-merger. As such a merger is not governed by legislation, it is not subject to a court order, but approval of the merger agreement by the shareholders is required.

This structure has been used in connection with the merger of a Swiss public limited company into an Irish public limited company as the surviving entity. Following Brexit, this structure may prove useful in connection with the merger of UK companies into Ireland, as it is unlikely to be able to avail of the CBM regime.

Pentair Ltd. (Switzerland), a public limited company entered into a Merger Agreement with its Irish subsidiary Pentair plc., thereby changing its organisation jurisdiction from Switzerland to Ireland. The surviving entity Pentair-Ireland remained subject to U.S. Securities and Exchange Commission reporting requirements and the applicable corporate governance rules of the NYSE.


For public companies incorporated in the EU a corporate migration may be achieved by using a Societas Europaea. The Societas Europaea or “SE” is a European public limited company formed under EU legislation. The SE was initially developed as a new “pan-European” form of company with the objective of enabling companies to operate on a cross border basis under a unified framework, without the obstacles posed by disparities in domestic company law in each member state.

One of the key advantages of an SE is its ability to relocate by moving its registered office to another EU member state without requiring dissolution or the creation of a new legal entity.

It was hoped that SEs would provide a cost efficient mechanism facilitating the restructuring of European businesses by reducing the administrative burden and legal costs associated with establishing in a new jurisdiction. Despite the perceived advantages of this supra-national structure, outside of Germany (where the SE has been more widely availed of, including amongst groups such as Allianz, Porsche, BASF), uptake across Europe has generally been low. The reasons for this may be due to the complexities in creating an SE, which cannot be incorporated on a stand-alone basis, but must be formed from a pre-existing limited liability entity (by merger, as a holding company or subsidiary, or by the conversion from an existing public limited company). Establishing an SE involves an employee consultation process, which at best can take up to several months to complete.

The SE remains an option for European companies considering a relocation within the EU. However, it is likely to be more attractive to those entities which are already registered as an SE and would therefore only be required to undergo the process of transferring its registered office. Other forms of existing companies, would be obliged to follow a two stage process; first, registration as a “Societas Europaea,” followed by a relocation of its registration to Ireland.

James Hardie Industries migrated its parent holding company to Ireland using a Societas Europaea structure.


Another possible structure for effecting a cross border migration is through an exchange offer whereby an Irish public limited company offers to acquire all of the issued securities of the non-Irish target in exchange for issue of new securities in the Irish plc, resulting in the Irish plc becoming the new parent company of the group.

An exchange offer made to shareholders of the non-Irish target will be subject to the form, content and timing restrictions of any local law takeover regime (where applicable).

Exchange offers have to date proved less popular, perhaps due to the 90% acceptance level required to secure full implementation of the merger/ acquisition.

The exchange offer structure was used in the re-domiciliation of Strongbridge (formerly Cortendo AB) from Sweden to Ireland, whereby a newly incorporated Irish plc acquired all of the issued shares of the original Swedish parent company. A prospectus which set out the terms of the exchange offer (approved by the Central Bank of Ireland, the Irish competent authority) was made available to all eligible shareholders of Cortendo AB. The exchange offer was conditional on its acceptance by 90% shareholders in the Cotendo AB. Following completion of the transaction, the original Swedish parent company became a subsidiary of the new Irish ultimate parent company.

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.

IRISH UPDATE – New legal regime for Irish companies due in 2015

 Editor’s Note:  Brian O’Gorman specialises in corporate finance with a particular emphasis on mergers and acquisitions, public takeovers, equity capital markets and private equity.  Suzanne Kearney, professional support lawyer at Arthur Cox, contributed to this article.


  • New legislation, the Companies Bill 2012 due to become law in early 2015 will consolidate Irish company law into one comprehensive piece of legislation.
  • The new company law regime will offer practical benefits and greater flexibility for Irish companies ranging from allowing companies to be incorporated more efficiently to radical reforms such as the introduction for the first time of domestic mergers and divisions.
  • It is anticipated that streamlining and simplifying company law obligations will make it easier for companies to conduct business in Ireland whether domestically, as part of cross border transactions or in ongoing multinational commercial operations.



New legislation, the Companies Bill 2012 due to become law in early 2015, will consolidate and reform the law relating to Irish companies and provide a modern legal framework for Irish companies, their shareholders and officers.

It is anticipated that the new company law infrastructure will prove practical and user friendly for those dealing with Irish companies, from those acquiring or forming Irish entities to those engaging in cross border commercial transactions.

Key provisions: 

  • New Model Company – Registration Simplified

The private limited company, the most common corporate entity used by businesses in Ireland will be represented as the statutory default model “company limited by shares” (“LTD”). The LTD has been described as being conceptually similar to a Delaware LLC, reflecting that Ireland, like Delaware, is a hub of multinational and cross border corporate activity.

The LTD will have a single-document constitution, defaulting to the provisions of the legislation unless the constitution provides otherwise.  LTDs may be single director companies, omitting the need for companies to provide an additional director to fulfil the current statutory minimum of two.

It is anticipated that these developments will simplify the process and reduce the cost in incorporating a new company.

  • Contractual CertaintyFull & Unlimited Capacity

The legal doctrine of “ultra vires” (company acting outside its corporate authority) will no longer apply to LTDs which will have the same legal capacity as a natural person. This will aid commercial transactions as there will no longer be a requirement to engage in the process of establishing that a company has the appropriate authority to conduct a particular activity.

In addition contracting with an LTD will be greatly simplified as the board of directors will be deemed to have authority to bind a company there should be no necessity for the counterparty to review a board resolution.

  • Codification of Directors Duties

Directors’ pre-existing common law and statutory duties will for the first time be assembled together as a comprehensive code. This welcome development will assist in making duties more transparent and accessible to directors, in particular for non-Irish directors who join the board of a local entity.

  • Corporate Resolutions & Approval

There will be greater flexibility surrounding the holding of meetings and passing of corporate resolutions. Majority written ordinary and special resolutions will now be permitted for the first time and LTDs will no longer be required to hold a physical AGM.

The legislation also includes provisions which will simplify the execution of documents under power of attorney both in Ireland and outside the jurisdiction.

  • Debt/ Security Listing

LTDs will not be permitted to offer securities (equity or debt) to the public, which allows the laws relating to LTDs to be more straightforward. Entities wishing to do so may elect to register as a “designated activity company” and specific rules will apply to such companies.

  • Mergers & Divisions

The legislation will introduce a statutory mechanism for domestic mergers for the first time under Irish law, providing that two Irish private companies may merge so that the assets and liabilities (and corporate identity) of one are transferred to the other by operation of law, before the former is dissolved.

The merger may be effected without the necessity for a court order, which will have a positive impact on timing and cost.  It will also be possible for an Irish company to be “divided” so that its undertaking is split between two other Irish companies.

These new provisions will allow for greater flexibility in corporate restructurings including following an acquisition or as part of a group reorganisation.

  • Validation Procedure

A new “summary approval procedure” will allow companies to validate transactions which constitute “restricted activities” such as financial assistance in the acquisition of its own shares. The procedure may also be used to sanction certain activities which would previously have required High Court approval such as capital reductions, and as noted above will also apply to mergers.

  • Registration of Security

Irish law currently allows lenders to secure priority of loan security by filing particulars on the public register within 21 days of creation. A new optional two-stage security registration procedure will allow notification of the intention to create security in order to secure priority even before the charge is actually created.  As priority will rest with the creditor who has been the first to register the security interest this new process is likely to impact on M&A transactions where security is being granted e.g. to lending institutions.

  • Audit Exemption

Certain categories of company including guarantee companies and dormant companies will be exempt from audit requirements, a change which is welcomed by non-profit, charitable organisations and large multi-national groups.

  • Insolvency & Corporate Recovery

The law relating to receiverships, liquidations and examinership (the Irish law equivalent of “Chapter 11”) will be consolidated and updated.

  • Compliance & Enforcement

Increased disclosure requirements such as mandatory director compliance statements will help provide greater accountability and transparency.

What Happens Next?

The Irish Government has indicated that it is working towards having the legislation signed into law before the end of this year and in force by June 2015, following which there will be a transition period of 18 months.

Initially, the focus for Irish companies of both domestic and multinational origin, is likely to be on the provisions surrounding conversion. Existing private companies may “opt-in” to the new regime and register an LTD or “opt-out” and register as one of the other new types of company provided for in the legislation. At the end of the transition period any private limited companies who have not made an election will automatically become an LTD.


It is anticipated that streamlining and simplifying company law obligations will make it easier for companies to conduct business in Ireland whether domestically, in cross border transactions or as part of ongoing multinational commercial operations.

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.

IRISH UPDATE – Trends and Prospects in Irish M&A Activity

Editor’s note:  This paper was contributed by Brian O’Gorman, managing partner of Arthur Cox and a member of the XBMA Legal Roundtable (Ireland). This article was co-authored by Maura McLaughlin and Caroline Connolly of Arthur Cox.  Brian, Maura and Caroline each specialise in corporate law, with a particular emphasis on corporate finance, takeovers and mergers & acquisitions.


  • M&A activity in Ireland has been affected by global and national economic difficulties experienced over the past three years, but Ireland’s M&A activity has recovered from the historic lows experienced in 2009.  This recovery looks set to gather pace in 2012.
  • Much of Ireland’s M&A activity during 2011 was driven by the restructuring of the financial services sector by the State.  Additionally, there was significant inward investment by foreign investors in Ireland, in particular in Ireland’s IT and pharmaceutical sectors.
  • As in 2011, State initiatives are likely to drive much of the M&A activity throughout 2012. In particular, it is expected that the State will commence the heavily anticipated sale of State-owned assets.  Additionally, it is expected that the National Asset Management Agency (“NAMA”), which has acquired the ‘bad debts’ of five of Ireland’s domestic banks, will accelerate its asset sales during 2012. 



M&A activity in Ireland has been affected by the global and national economic difficulties experienced over the past three years.  This was most strongly felt in Ireland during 2009, when there was an acute dip in M&A activity. Since then, Ireland has recovered very well. The significant rebound in M&A activity during 2010 was maintained (and improved) in 2011 and, overall, prospects for 2012 look promising.

2011 M&A Activity in Ireland

There were almost 190 M&A transactions in Ireland during 2011. Of these, the 80 largest transactions had an aggregate value of about €14.3 billion. The most active sectors throughout this period were Financial Services, IT/Telecoms, Health/Pharmaceutical and Food/Food services.

Financial Services: Throughout 2011 the financial services sector outperformed all other sectors in Irish M&A, with about 73% of aggregate value during the year being credited to this sector.

On 31 March 2011, the Minister for Finance of Ireland (the “Minister”) announced the State’s plans to restructure and recapitalise the Irish financial sector.  By 31 July 2011, the following transactions had completed: (i) the acquisition by Allied Irish Bank, p.l.c. (“AIB”) of EBS Building Society following its demutualisation, (ii) the acquisition of 99.5% of Irish Life & Permanent plc (“ILP”) by the Minister for €2.3 billion by way of subscription for shares, (iii) the subscription by the State for shares in AIB for €5 billion bringing the State’s ordinary shareholding up to 99.8% of AIB and (iv) the recapitalisation of Bank of Ireland (“BOI”) by way of a State underwritten rights offering (the “BOI Recapitalisation”).

Immediately following completion of the BOI Recapitalisation, a group of North American investors led by Fairfax Financial Holdings purchased (in aggregate) a stake of just under 35% in BOI from the Irish State valued at €1.1 billion.  Other investors in this group included WL Ross & Co, the Capital Group, Fidelity Investments and Kennedy Wilson.  This transaction was hugely significant for Ireland, and was hailed as a massive vote of confidence in BOI, one of Ireland’s pillar banks, and also in Ireland’s long-term prospects.

M&A activity throughout 2011 in the financial services sector also reflects the significant de-leveraging by Irish banks of their ‘non-core’ assets.  Activity in this area has been significant, and is likely to remain a staple of Irish M&A for some time to come.

Not surprisingly, a number of deals in Ireland in 2011 were driven by financial restructurings, most notably including the acquisition of Quinn Insurance by the Liberty Mutual Group and Anglo Irish Bank.

IT/Telecoms: In recent years, Ireland has become a hub of IT activity with many significant IT companies (like Google, Facebook, Yahoo!, LinkedIn and Zynga) establishing their headquarters in Dublin.  As with other years, Ireland’s IT/Telecoms sector saw a great deal of M&A activity, most deals demonstrating the continuing desire of foreign investors to invest in Irish IT companies.  Notable transactions in this areas include BAE Systems’ acquisition of the Norkom Group for €180 million and Telecity Group plc’s acquisition of Data Electronic Services for €100 million.

Health/Pharmaceutical: Ireland also has a very strong Health/Pharmaceuticals sector, and is home to 15 of the world’s top 25 medical devices firms. The trend in the pharmaceutical industry was, again, investment by US corporates in Irish companies.  The largest deal in this sector was the acquisition by Alkermes Inc of Elan Drug Technologies for €669 million.  This deal structure was innovative, as it involved Alkermes’ migration to Ireland (forming Alkermes plc) by way of merger, whilst maintaining its New York listing. Over the past three years many companies have chosen to migrate their top holding companies to Ireland (e.g. Seagate, Warner Chilcott, Covidien and Accenture) whilst maintaining their listings in the United States.  However, this was the first time such a company implemented its migration to Ireland through a merger.

Food Services: Significant transactions in this sector included Greencore plc’s acquisition of Uniq plc for a reported €128.5 million, which was a strategic investment designed to strengthen Greencore’s market position and Glanbia’s acquisition of US company Bio-Engineered Supplements and Nutrition Inc for a reported €107 million, a transaction that was in keeping with Glanbia’s growth strategy.  The main theme across the food services sector, however, was consolidation, with the most notable transaction of this type in this sector being Kerry Group’s acquisition of Cargill Flavour Systems for €171.8 million.  Another innovative transaction in this sector, also designed to achieve consolidation, was the proposed acquisition by Greencore of Northern Foods by way of merger of equals.  Although this transaction did not ultimately complete (due to a rival bid), it did mark the first use of the European cross-border merger regime in a transaction involving public limited companies listed on regulated markets in Ireland and the United Kingdom – and it demonstrated that this merger regime can be used beyond the realm of intra-group reorganisations.

Despite turmoil within European and global markets, the continuing ability of Ireland to attract foreign investment remains clear, in particular in the IT/Telecoms and Health/Pharmaceutical sectors.  Strategic investments (both domestic and overseas) by Irish companies also continued, in particular for Irish listed companies who have, or are able to access, a variety of financing sources – including, as one example, CRH plc which spent €600 million in development during 2011.

M&A Outlook for 2012

The primary threat faced by M&A activity in Ireland is uncertainty within the euro-zone, in particular in relation to the future of the euro.

Indeed, late in 2011 the proposed sale of Irish Life (the insurance business of ILP) to Canada Life at a price in excess of €1 billion failed at a late stage and the collapse of the deal was widely attributed in the press to the buyer’s concerns about the euro-zone crisis.  The Irish Government attributed the failed deal to the challenging European market environment, stating that it was not supportive to achieving a valuation that recognises the strength of the Irish Life business.

Notwithstanding, market-players remain optimistic that there will be a buoyant M&A market in Ireland throughout 2012.  Indeed, there are already indications of strong activity in the M&A market in Ireland in the short to medium term.

It is expected that State initiatives are likely to continue to be key contributing factors to M&A activity in Ireland over the next twelve months.

One area of activity is expected to the sale of certain assets owned, or partially owned, by the State.  In a report commissioned by the State (the McCarthy Report), a number of significant and valuable assets were identified for potential sale. Some of the assets identified for sale include the businesses of Ireland’s national electricity provider (ESB) and gas provider (Bord Gáis) and the State’s 25% stake in the national airline (Aer Lingus).  The timing of any such disposals continues to remain unclear as the State insists that there will be no ‘fire-sales’, but M&A activity remains anticipated as it has been widely reported that both the EU and IMF are putting pressure on the Irish State to dispose of these valuable assets.

Another area of expected activity arises in relation to NAMA.  NAMA was established in 2009 to purchase the ‘bad debts’ of Irish banks, mainly loans related to property and property development.  NAMA also acquired the security for these loans. Since its establishment, NAMA has acquired loans with a nominal value of €72.3 billion from five Irish financial institutions participating in the initiative. NAMA’s objective is to obtain the best achievable financial return on these loans for the State on this portfolio over an expected lifetime of up to ten years.  The Board of NAMA has set a number of debt reduction targets over its expected life, including a target of 25% by 2013. Additionally, by the end of 2011, NAMA had approved the sales of assets totalling €6.2 billion and had appointed a panel of advisers in relation to proposed sales. Accordingly, it is generally expected that, during 2012, disposals by NAMA of loans and assets will accelerate.

Coupled with these initiatives is the ongoing restructuring of the financial services sector in Ireland.  It is likely that there will be further M&A transactions in the financial services area, in particular to achieve the deleveraging of the Irish banks.

According to Ernst & Young’s 2011 annual globalisation index published on 31 January 2012, Ireland is the world’s second most globalised nation in terms of GDP, and Ireland is forecast to remain in this position until at least 2015.  The report also states that Ireland is the most globalised nation in the western world.  This report confirms that Ireland is, and despite recent economic difficulties, remains a leader in international trade.

The strength of the investment opportunities available in Ireland continues to be very attractive to a broad range of investors and we expect growing levels of M&A activity during 2012.

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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