M&A annual review

Author: | Published: 10 Dec 2015
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Billion dollar price tags are the new normal for M&A. IFLR1000’s annual rankings identify the law firms that have laid the foundations for next year’s deal activity

After years of betting on emerging market growth, acquisitive companies have returned to classic M&A strategies. Economic synergies, horizontal mergers and brand recognition were boards' priorities in 2015. Post-crisis portfolio sales have dried up, and boards can't ignore the lacklustre performance of the (still) growing number of developing economy acronyms.

It means that megamergers are clearly back. While global volumes are set to hit a record high this year, deal numbers are down. The big rush came in the second half of the year. In November Pfizer, obviously recovered from its failed 2014 bid for AstraZeneca, announced a $160 billion takeover of Allergan – the pharma sector's second biggest in history. The same month saw SABMiller and AB InBev announce their $285 billion tie-up – one of the biggest beverage mergers ever. For boards overseeing smaller balance sheets, they can look forward to a spate of spin-offs that will inevitably be needed to placate competition authorities.

FDI restrictions are being eased in China, India and even Saudi Arabia, and the highly-anticipated removal of sanctions against Iran (which is tipped for 2016) would reopen the Middle East's second biggest economy.

Where regulators are clamping down – most notably US lawmakers on inversions – clever structuring is still finding ways to get deals done.

Regulatory drivers aside, market forces are changing global capital flows. Asian conglomerates are increasingly interested in the US, and the exponential growth of financing options – including challenger banks, peer-to-peer, and fund firms – promise liquid debt markets even after this year's inevitable US interest rate rise.

As always, the IFLR1000 has been tracking this activity, and the law firms taking the leading roles on the year's best deals. Its editors and researchers based in London, New York and Hong Kong have spent over 12,000 hours conducting interviews with private practitioners and in-house counsel to compile the 2016 M&A rankings.

Highlights from a selection of the markets which – for better or worse – captured our attention this year are provided below. The 2016 edition of the IFLR1000 is available in full, and for free, online at iflr1000.com

Market overviews by Candy Chan, John Crabb, Sam Duke, Adam Majeed, Rani Mehtra, Jon Moore and Michael Washburn.

Brazil


Tier 1
BMA – Barbosa Müssnich Aragão
Machado Meyer Sendacz Opice Advogados
Mattos Filho Veiga Filho Marrey Jr & Quiroga Advogados
Pinheiro Neto Advogados
Tier 2
Demarest Advogados
Lefosse Advogados
Pinheiro Guimarães Advogados
Souza Cescon Barrieu & Flesch Advogados
TozziniFreire Advogados
Veirano Advogados
Tier 3
Levy & Salomão Advogados
Lobo & de Rizzo Advogados
Motta Fernandes Rocha Advogados
Soares Bumachar Chagas Barros Advogados
Stocche Forbes Padis Filizzola Clapis
Passaro Meyer & Refinetti
Trench Rossi & Watanabe
Ulhôa Canto Rezende & Guerra

Brazil's M&A market has been hit by adverse developments such as the fall in value of the real and allegations of corruption involving state-owned Petrobras. The impeachment of President Dilma Rousseff certainly hasn't helped sentiment either. That said, conditions have provided an incentive for inbound M&A, as foreign companies can buy assets for cheaper prices.

Many countries are drawn to Brazilian assets, with Portugal, the US and China being some of the most active investors. The oil and gas industry has been particularly busy, followed by education and TMT. In the latter category, one of the most significant transactions of the past year saw telecom company Oi sell PT Portugal to Altice for $6.4 billion. One of the most important banking deals was the sale of HSBC's Brazilian operations to Bradesco in August 2015 for $5.2 billion. From a regulatory perspective, a notable development saw competition authority CADE issue amendments which will increase the types of M&A transactions which are eligible for fast-track merger control clearance.


Bulgaria


Tier 1
Boyanov & Co
CMS Bulgaria
Djingov Gouginski Kyutchukov & Velichkov
Kambourov & Partners
Schoenherr (in cooperation with Stoyanov & Tsekova)
Tier 2
Dimitrov Petrov & Co
Penkov Markov & Partners
Spasov & Bratanov
Tsvetkova Bebov Komarevski
Wolf Theiss
Tier 3
ArsovNatchevGaneva
Dinova Rusev & Partners
Gugushev & Partners
Tocheva & Mandazhieva Law Office

Direct foreign investment into Bulgaria hit over €1 billion ($1.06 billion) last year, with the majority coming from EU member states – in particular Austria and Holland – as well as the US and Russia. Real estate, financial services, TMT and energy were the major drawcards.

Inbound activity drove the country's M&A market which amounted to $962 million, though it is worth noting that the value of a large proportion of transactions are non-disclosable due to local privacy legislation.

The biggest deals of recent times include US-based Progress Software acquiring Sofia-based Telerik for €211 million, and US investment firm the Rohatyn Group selling its stake in pharmaceuticals company Huvepharma to Advance Properties for €255 million.

The financial services sector is very active, particularly in its interactions with Greece. Examples include the recent acquisition of Alpha Bank by Eurobank Ergasias, and the rumoured acquisition of Credit Agricole Corporate and Investment Bank by Eurohold Bulgaria.

This year has experienced high levels of activity in the TMT sector, including the acquisition of a 43% majority stake in local telecom company Vivacom by French investment company LIC33 for the nominal fee of €1. In the food sector, Bulgarian American Foods and PHW-Gruppe Lohmann & Co made three acquisitions, adding Trgovska Co, Kamchia and Ameta Holding to their developing portfolio.

The private equity market is relatively young, with most of the deals reported over the last 12 months being valued in the sub-€5 million region. There were a handful of completed deals around the €20 million mark, including the divestment of DPD Bulgaria and Geopost Bulgaria by La Poste to Speedy for $21 million.


China & Hong Kong

China: Local firms

Tier 1
Fangda Partners
Haiwen & Partners
JunHe
King & Wood Mallesons
Zhong Lun Law Firm
Tier 2
Han Kun Law Offices
Jingtian & Gongcheng
Tier 3
AllBright Law Offices
Boss & Young
Broad & Bright
Commerce & Finance Law
FenXun Partners
Global Law Office
Grandall Law Firm
Guantao Law Firm
Llinks Law Offices

Hong Kong

Tier 1
Baker & McKenzie
Clifford Chance
Freshfields Bruckhaus Deringer
Herbert Smith Freehills
Linklaters
Tier 2
Allen & Overy
Davis Polk & Wardwell
Kirkland & Ellis
Latham & Watkins
Norton Rose Fulbright
Skadden Arps Slate Meagher & Flom
Slaughter and May
Sullivan & Cromwell
Weil Gotshal & Manges
Tier 3
Cleary Gottlieb Steen & Hamilton
DLA Piper
Hogan Lovells
King & Wood Mallesons
Mayer Brown JSM
Milbank Tweed Hadley & McCloy
Morrison & Foerster
O’Melveny & Myers
Orrick Herrington & Sutcliffe
Paul Hastings
Paul Weiss Rifkind Wharton & Garrison
Reed Smith Richards Butler
Ropes & Gray
Shearman & Sterling
Sidley Austin
Simmons & Simmons
Simpson Thacher & Bartlett

China: Foreign firms

Tier 1
Allen & Overy
Clifford Chance
Freshfields Bruckhaus Deringer
Linklaters
Shearman & Sterling
Skadden Arps Slate Meagher & Flom
Tier 2
Baker & McKenzie
Cleary Gottlieb Steen & Hamilton
Davis Polk & Wardwell
Hogan Lovells
O’Melveny & Myers
Paul Weiss Rifkind Wharton & Garrison
Simpson Thacher & Bartlett
Tier 3
DLA Piper
Herbert Smith Freehills
Kirkland & Ellis
Latham & Watkins
Mayer Brown JSM
Morrison & Foerster
Norton Rose Fulbright
Orrick Herrington & Sutcliffe
Paul Hastings
Sidley Austin
Slaughter and May
Vinson & Elkins
Weil Gotshal & Manges
White & Case

Despite a slowdown in the third quarter, M&A involving Chinese companies hit a record-high of almost $500 billion this year. Black Monday – the stock market crash in late August – might have alarmed non-Asian investors interested in China, but local investors have persisted with their outbound activity in the face of unpredictability and a devalued yuan. The state's long-term encouragement of outbound investment – known as the Go Out Policy – has continued to inform domestic financiers and the government's 12th five-year plan. As an international finance Hong Kong, meanwhile, has been emphasised as the gateway for acquisitive Chinese companies.

In fact, outbound acquisitions by mainland companies broke records – reaching $78 billion. Chinese acquisitions in Europe grew more than 90% on last year. Overseas companies targeting Chinese concerns – with a value of $34 billion – remained stable. "We see a diverse background of Chinese companies going outside for deals," one practitioner says. "And the size of these deals are huge."

If 2014 was about the equity capital markets with Alibaba's IPO dominating headlines, then 2015 has been about tech M&A. Alibaba Group Holding recently agreed to buy online video provider Youku Tudou. Two of China's largest online travel companies, Ctrip.com International and Qunar Cayman Islands tied-up. And local internet startups created dominant players such as China's Uber, Didi Kuaidi, and the new company created by the merger of Meituan and Dianping Holdings. In the name of efficiency, it is clear that large scale consolidation has been a trend in the technology sector.


"If 2014 was about the equity capital markets, 2015 has been about tech M&A"


Media and telecommunications, financial services, consumer goods, real-estate and healthcare were also active in the past year. In private equity, financial buyers continued to deploy increasing amounts of capital in new investments.

Hong Kong by itself does not generate a great deal of M&A work, but this year has been a notable exception as Li Ka-shing – Asia's richest man – decided to restructure his business empire. The revamp allowed for Cheung Kong Group to split into two listed companies, one focusing on property and the other on telecoms, retail and energy. This involved Cheung Kong Holdings $40.8 billion bid for a 50% stake in Hutchison Whampoa; and Cheung Kong Holdings' $34.9 billion sale of Cheung Kong Property Holdings.

China's 13th five-year plan is just around the corner, and one can expect more of the same in order to sustain growth, albeit with a desire to transform the economy into one driven not only by investment and exports, but also consumption.


Cyprus


Tier 1
Andreas Neocleous & Co
Tier 2
Antis Triantafyllides & Sons
Chrysses Demetriades & Co
Dr K Chrysostomides & Co
Harneys Aristodemou Loizides Yiolitis
Ioannides Demetriou
Tier 3
Chryssafinis & Polyviou
Clerides Anastassiou
Neophytou
Georgiades & Pelides
Pamboridis
Patrikios Pavlou & Associates

The Cypriot economy has rebounded reasonably following the financial crisis and its IMF bailout. While growth hasn't been spectacular, the country is seeing a slow and steady revival, from which three clear M&A trends can be highlighted. The first is an increase in work related to oil and gas. After the June 2015 announcement that the Aphrodite offshore gas field was commercially viable for exploitation, plans have moved ahead for its extraction. While there are not sufficient reserves to justify the development of LNG terminals and pipelines just yet, there is still likely to be commercial activity arising from the announcement.

The second trend is real-estate. Always a vibrant sector even in difficult economic times, there has been a steady uptick of activity on the island in the past year, though not enough to create fear of a potential bubble.

The final area, and one that is a topic of increasing discussion, is the restructuring and sale of non-performing loans (NPL) from Cypriot banks. The country's ratio of distressed debt is one of the highest in Europe and draft legislation has only recently been put forward to allow banks to actively divest loan portfolios to third parties. While the upward trend of NPLs was finally halted in September 2015, the relative tardiness in dealing with the issue has had knock on effects for the financial sector, not least a restriction of liquidity and lending.

The government has also put forward tentative plans to create a bad bank to deal with the issue by acquiring loan portfolios from Cypriot banks. But again, in comparison to other EU states, the country has been late in adopting such a strategy. Nevertheless the new measures are likely to result in a significant increase in M&A activity linked to NPLs in the coming year.


Egypt


Tier 1
Helmy Hamza & Partners
Matouk Bassiouny
Zulficar & Partners
Tier 2
Al Kamel Law
Dentons
Ibrachy & Partners
Shalakany Law Office
Sharkawy & Sarhan
Zaki Hashem & Partners
Tier 3
Arab Legal Consultants
Ibrachy & Dermarkar
Khodeir Nour & Taha
Sarie-Eldin & Partners

The country's political stability since the revolution in 2013 has had a positive effect on its economic development. Although Egypt's M&A market did not show much promise in 2014, it soon rallied, registering among the highest in the Middle East and North Africa region. 2015 is on track to follow this pattern.

Historically the majority of Egypt's M&A transactions have been inbound, but 2015 has seen a fairly even split between outbound and inbound activity. The most active sectors are financial services, healthcare, consumer products and TMT, while the majority of outbound activity has been in the construction industry.

Egypt is one of the top five countries in Africa in terms of receiving foreign direct investment, the majority coming from the Middle East, the US and EU – with the UK as the biggest source.

The private equity sector is also proving resilient, and is helping to bolster that of the surrounding region. Several international funds are seeking to invest in the country's fastest growing sectors, food and tourism for example are attracting attention.

Much of Egypt's M&A activity is in the sub $100 million region, but though less frequent, larger transactions do occur. One of the most notable deals of the year came in January when American corporation Kellogg's successfully purchased 86% of biscuit company Bisco Misr for $125 million. The company successfully fended off a competing bid from Abraaj and also completed the $50 million acquisition of Mass Food Group months later. Another acquisition in the sector, that also marked a bidding war, saw Pioneer Holding purchase Arab Dairy for around $33.5 million.


"Egypt is one of the top five countries in Africa in terms of receiving FDI"


There was also significant activity in the telecoms sector, one instance saw Egypt's Orange subsidiary Mobilnil sell its portfolio of towers to Eaton Towers' local subsidiary for $131 million. Orange was active again in February as it acquired a five percent stake in Egyptian Co for Mobile Services from Orascom Telecom Media & Technology Holding, for $184 million.

The largest deal of 2015 so far is in the financial services sector; Piraeus Bank sold its Egyptian operations to Al Ahli Bank of Kuwait for $495 million in November.


India


Tier 1
AZB & Partners
Cyril Amarchand Mangaldas
Khaitan & Co
Luthra & Luthra
Shardul Amarchand Mangaldas & Co
Tier 2
Desai & Diwanji
J Sagar Associates
Talwar Thakore & Associates
Trilegal
Tier 3
ALMT Legal
Bharucha & Partners
DSK Legal
Economic Laws Practice
Majmudar & Partners
Nishith Desai Associates
Phoenix Legal
S&R Associates
Wadia Ghandy & Co

India's M&A market experienced a significant uptrend in October this year, bringing the year's total deal numbers to 486 with a combined value of $29 billion. This shows an increase in comparison to the same period the year before.

The surge didn't happen until a couple of big transactions came in during October, generating $3.1 billion from 58 deals alone. A number of the deals were worth over $100 million with one being worth over $1 billion.

Major deals included Boston-based American Tower Corporation's $1.2 billion purchase of a 51% stake in Indian cell-tower owner Viom Network, and Mumbai-based Carnival Group's $267 million acquisition of Larsen & Toubro's commercial real-estate projects in Chandigarh.

Prime Minister Narendra Modi has pledged to boost foreign investment by taking actions on key policy issues. One of his policy initiatives – Make in India – is aimed at turning India into a manufacturing hub. Part of his efforts was the proposed Goods and Service Tax (GST) —although currently blocked in parliament — which is likely to be rolled out early next year and is set to subsume the various indirect taxes levied by the state. To continue last year's effort, the government has further liberalised 15 major sectors including defence, construction, civil aviation and media to foreign investment. A separate initiative called the Institutional Trading Platform (ITP) with relatively relaxed regulations was also launched in India's stock exchanges to help tech-startups raising funds.

Inbound M&A seems to be on the rise with reports citing it as a consequence of the Make in India campaign. Energy and natural resources, IT and manufacturing were the most active sectors for M&A work.

India is now ranked 130 out of 189 economies in the World Bank's 'ease of doing business' index, an improvement from last year.


Indonesia


Tier 1
Assegaf Hamzah & Partners
Ginting & Reksodiputro
Hadiputranto Hadinoto & Partners
Hiswara Bunjamin & Tandjung
Makes & Partners
Melli Darsa & Co
Tier 2
Ali Budiardjo Nugroho
Reksodiputro
Hendra Soenardi
Makarim & Taira S
Soemadipradja & Taher
Soewito Suhardiman
Eddymurthy Kardono
Tier 3
Bahar & Partners
Budidjaja & Associates
DNC Advocates At Work
Hanafiah Ponggawa & Partners
Hutabarat Halim & Rekan
Leks & Co
Linda Widyati & Partners
Lubis Ganie Surowidjojo
Mochtar Karuwin Komar
Oentoeng Suria & Partners
Susandarini & Partners
Tumbuan & Partners

During his election campaign last year, President Joko Widodo made pledges to create a better investment environment in Indonesia. In the past year, however, these promises have not materialised as the total value of M&A deals up until November this year stood at $3.53 billion, a relatively weak figure when compared to last year's $10 billion.

Official figures show that Singapore and Japan are the two biggest foreign investors in Indonesia with each having invested a total of $1.2 billion in the first four months of 2015, followed by South Korea, USA, Malaysia and the Netherlands. Mining, food and utilities were the most active industries in regards to cross border investment.

For purely domestic deals transactions at telecommunications, retail, banking and real estate can be seen on a domestic level. Indonesia's communications and information minister Rudiantara had urged telecommunication operators to consolidate and merge with or acquire from the current six competitors to leave three or four remaining.

The government also announced plans this year to merge state-owned companies in the mining, shipbuilding and technology sectors into holding companies, which would consolidate and leave a total of 10 Indonesian state-owned companies from the present 25.

However, in an effort to defend the falling rupiah, the Indonesian central bank had decided to ban foreign currency transactions this July, raising concerns of increased operation costs particularly for businesses that transact in US dollars as a hedge against the local currency. The country's policies to raise import duties on liquor, cars and over 1,000 other products as well as set Indonesian language requirements for both existing expatriates and future foreign workers shows protectionist tendencies for local industry competing with foreign businesses.


Malaysia


Tier 1
Kadir Andri & Partners
Shearn Delamore & Co
Skrine
Wong & Partners
Tier 2
Albar & Partners
Rahmat Lim & Partners
Shook Lin & Bok
Zaid Ibrahim & Co
Zul Rafique & Partners
Tier 3
Adnan Sundra & Low
Azmi & Associates
Cheang & Ariff
Chooi & Company
Lee Hishammuddin Allen & Gledhill
Raja Darryl & Loh
Zain & Co

Malaysia's M&A market saw a significant slowdown in 2015 as deal values fell to their lowest level in six years - $7 billion compared to $29 billion in 2014. It could be the second-lowest year on record since the financial crisis in 2009, when deal values plummeted to $4.2 billion.

Investor confidence was dealt a blow when a three-way jumbo merger collapsed at the beginning of the year. The transaction was an attempt at a $22.3 billion merger between local banks CIMB, RHB Capital and Malaysia Building Society to create one of the biggest South East Asian lenders with assets of $188 billion. The plan was eventually aborted due to weak global economic conditions.

The state development fund 1Malaysia Development (1MDB) was also hit by scandals, with its $11 billion in debt hurting investors' confidence throughout the whole year until it managed to sell its power assets, Edra Global Energy, to China General Nuclear for $2.3 billion in November. It's not clear yet whether the Chinese firm has been given an exemption to buy all of the power assets; foreign investors are typically not allowed to own as much as 49% of Malaysian power producers. The deal will enable China to own 14% of the country's total power assets.

Falling oil prices have created great challenges for Malaysia's growth prospects sending the oil and gas exporting country to a four-year-low currency rate. The World Bank has moved Malaysia's 'ease of doing business' rank one lower from 17 to 18 when compared with 189 economies worldwide.

Overall, outbound merger investments were still seen in the oil and gas and real estate sectors, while consolidation happened among domestic energy players. On the private equity front, investments were directed towards the retail, technology and consumer sectors.


Myanmar


Tier 1
Allen & Overy
DFDL
Myanmar Legal Services
Tier 2
Kelvin Chia Yangon
Polastri Wint & Partners
Rajah & Tann NK Legal Myanmar
Selvam & Partners
U Tin Yu & Associates
VDB Loi
Tier 3
Allen & Gledhill
Wong Partnership

The November victory of Aung San Suu Kyi's Democratic Party in Myanmar's first free elections for 25 years could prompt a surge in M&A, with foreign investors prepared to enter into the country. Economic analysts have estimated that foreign direct investment will climb 25% from a year earlier to a value of $10 billion this year, even though the country is yet to have an active stock market or credit rating.

The most active sectors are energy, manufacturing and telecommunications. Norway's Telenor and Qatar's Ooredoo launched Myanmar's first cellphone service shortly after the country's telecoms network opened up to foreign investment last year. Low-labour costs have attracted firms such as Gap to build their manufacturing line there. But the country's vast untapped natural resources has made oil and gas exploration the most active investment target, with US-based Chevron's Unocal announcing early this year that it had agreed a $277 million contract for offshore block A-5. Britain's BG Group and Australia's Woodside Petroleum have also announced a $1 billion deal to explore four blocks off Rakhine state in the west of the country.

According to official figures, Singapore-listed companies took over half of the investment volume in 2014 and 2015, with a total of $4.2 billion – mostly oil and gas projects remotely managed in an overseas investment haven. Hong Kong-based firms are the second-largest investors with $850 million, followed by Chinese companies with $516 million.

The Myanmar government's commitment to further reforms act as another magnet for foreign investors. In an attempt to create a more friendly investment environment, legal structures and investment laws will be modernised to attract investment. The latest move saw the government combine the Foreign Investment Law and Myanmar Citizens Investment Law to reduce restrictions on foreign investors and promote business.

The government is also in talks with the EU over the Myanmar-European Union Investment Protection Agreement, which is expected to be in effect early next year. The agreement will build a certain level of protection for private investment in Myanmar and all 28 EU member states. These prospective developments have enabled the country to climb 10 places to be ranked 167 out of the 189 economies graded by the World Bank's 'ease of doing business' index.

Although Yangon's lack of skilled labour, poor infrastructure and slow internet speed could pose big challenges to some businesses, Myanmar certainly has the potential to become Asia's next rising star.


Nigeria


Tier 1
AELEX
Aluko & Oyebode
Banwo & Ighodalo
G Elias & Co
Olaniwun Ajayi
Templars
Udo Udoma & Belo-Osagie
Tier 2
Abdulai Taiwo & Co
Adepetun Caxton-Martins
Agbor & Segun
Jackson Etti & Edu
Odujinrin & Adefulu
Tier 3
Ajumogobia & Okeke
Detail Commercial Solicitors
Olajide Oyewole
Perchstone and Graeys
SPA Ajibade & Co

Nigeria's economic output surpassed that of South Africa in 2014, making it the continent's largest for the first time. April 2015 saw Nigeria elect a new government, a process that was expected to bring serious political unrest, but did little to upset the country's stability or economic progress. In line with this the M&A market has grown and corporate lawyers are positive, upbeat, and cautiously optimistic.

The jurisdiction also boasts a solid private equity sector which accounts for around a tenth of sub-Saharan Africa's capital. This development has accelerated thanks to an improved business environment and tax incentives for investors.

Oil and gas dominates the economy, and while divestments by oil companies still hold a major share of the market, food and beverage, agriculture and consumer products were other busy target sectors. Dealogic suggests that inbound M&A activity is currently at around $1.5 billion, though very little outbound activity has been registered.

There is little appetite within local banks to finance M&A, and the majority of investment is external. However, in 2014 the three largest M&A transactions in sub-Saharan Africa were all led by Nigerian buyers and concerned Nigerian targets.

The largest M&A transaction of late was a divestment by Royal Dutch Shell of its licence for onshore oil block 29, which was acquired for $2.58 billion by Iglo Sanomi's Taleveras Group. Two other significant transactions, both in October, were Skye Bank's $700 million acquisition of Mainstreet Bank, and Heritage Bank's $344 million acquisition of Enterprise Bank.

In the TMT sector, several huge transactions were completed in July 2015, all involving the acquisition of communications towers. The largest of these was MTN Group's sale of nearly 10,000 towers to IHS Holding for $2 billion, closely followed by the acquisition of almost 5000 of Airtel's Communications Towers by American Tower Corp from Bharti Enterprises for $1.1 billion. MTN also acquired another 2000 towers from Etisalat Nigeria for an undisclosed fee.

The largest industrial goods transaction of the year came as part of a global drive by Lafarge to create the world's largest cement company. The merger of Lafarge and Lafarge Wapco was worth around $1.35 billion. In the consumer goods industry, two notable acquisitions saw Diageo purchase 15.7% of Guinness Nigeria for $208 million, and Kellogg's acquire a 50% share in Multipro for $450 million.


Russia


Tier 1
Cleary Gottlieb Steen & Hamilton
Freshfields Bruckhaus Deringer
Linklaters
Skadden Arps Slate Meagher & Flom
White & Case
Tier 2
Akin Gump Strauss Hauer & Feld
Allen & Overy
Clifford Chance
Debevoise & Plimpton
Herbert Smith Freehills
Latham & Watkins
Tier 3
Baker & McKenzie
Baker Botts
Dentons
Egorov Puginsky Afanasiev & Partners
Goltsblat BLP
Hogan Lovells
Morgan Lewis & Bockius
Norton Rose Fulbright

The Russian M&A market continues to reel as the country comes to terms with the new normal of sanctions and plummeting oil prices. Even as the rouble tumbled to record lows against the dollar – halving in price in just over a year – there was little foreign investment interest as the stability of the market remains in flux.

Mid-year figures put aggregate deal values down 58% from 2014 and indications are that the market fared worse, if anything, for the remainder of the year. That puts total value at or below that of the darkest days of the financial crisis. While deal volumes have also dropped significantly, almost by half year-on-year, they actually remain fairly buoyant compared to 2010 figures. The trend, then, is towards more small-cap deals and fewer high value ones.

Lawyers say that domestic operations have come to terms with the situation and are starting to pick-up once again, albeit in a cautious manner. However, the main driver of those deals in recent years was the activity of state-controlled banks and oil and gas companies. Giventhe new normal of sanctions and oil prices, there simply isn't the equity available to drive the market. Even where major deals have gone ahead, they have been beset by problems. For example, one of the biggest deals of the year came in April when Gazprombank and United Capital Partners took full control of Stroygazconsulting – the construction contractor to Gazprom. Yet by August, several banks had sought to bring bankruptcy proceedings against the company and its subsidiaries.

Internationally the situation remains very difficult. Sanctions have deterred many Western investors, even in unaffected sectors, while hoped-for alternative interest from China has failed to materialise. To make matters worse, the downing of a Russian bomber by Turkish forces in late November has led to sanctions being imposed on the perpetrators. As one of Russia's most important trading partners, doubly so since Western sanctions took force, the impact of a deterioration in that relationship could have far-reaching consequences.


Tanzania


Tier 1
Clyde & Co in association with Ako Law
FB Attorneys
Tier 2
ATZ Law Chambers
IMMMA Advocates
Mkono & Co Advocates
Norton Rose Fulbright
Tier 3
ENSafrica Tanzania
Velma Law

The M&A market in Tanzania is among the most active in east Africa. While it is second only to Kenya in volumes, most deals tend to be comparatively low in value. The Tanzanian economy is growing at a rate of over seven percent a year, and despite concern that recent elections would damage confidence, the market has continued to show promise.

The majority of the country's M&A transactions in 2015 were either in oil and gas, mining or telecommunications. Like most emerging economies, inbound activity is dominant, and while figures remain small, the number of internationals looking to invest is rising.

Foreign investment into Tanzania comes from a variety of countries including neighbours Kenya and South Africa, as well as fellow commonwealth member states Australia, Canada and the UK. Private equity firms have taken an active interest, and May 2014 saw the establishment of the jurisdiction's inaugural private equity fund. The $300 million Mkoba Private Equity Fund has been launched to provide capital to lesser known African SMEs.

Although historically there have been some exceptionally large deals, the majority of M&A in Tanzania tend to sit at around the $20-30 million mark. In the mining industry, examples of transactions at this level include Sky Associates Group's $17 million acquisition of Richland Resources' Tanzanian mining, exploration and cutting operations, as well as the pending acquisition of the mining assets of the Panda Hill Niobium Project by Cradle Resources from Tremont Investment for $20 million.

In oil and gas, a recently announced transaction will see BowLeven purchase oil and gas assets from Aminex for $18 million.


Turkey


Tier 1
Akol
Esin Attorney Partnership
Hergüner Bilgen Özeke
Paksoy
Pekin & Pekin
YaziciLegal
YükselKarkınKüçük Attorney Partnership
Tier 2
Bener Law Office
Cerrahoğlu Law Firm
Pekin & Bayar
Taboğlu & Demirhan
Verdi Attorneys Partnership
Tier 3
Balcıoğlu Selçuk Akman Keki
Birsel Law Offices
Çakmak
Gedik & Eraksoy
Günalçin
Güner Law Office
Kolcuoğlu Demirkan Koçaklı
Özel & Özel
Somay

The once buoyant Turkish economy continued to struggle, with 2015 growth forecasts downgraded from four percent to three percent in October. Political tensions – domestic, regional and international – have threatened to derail the country's once seemingly-irresistible ascent and the corporate market is suffering as a result.

Political uncertainty, that saw two parliamentary elections this year, as well as the worsening security situation have been felt. The resumption of the Kurdish conflict after two and a half years of ceasefire has destabilised the south-eastern part of the country, while October's Ankara bombings and an escalation of fighting on the Syrian border (along with the refugee crisis related to that conflict) have created a tempestuous environment. On top of all that, the downing of a Russian bomber by Turkish forces in late November will likely have serious repercussions. As Turkey's biggest import partner and a major export partner, Russian sanctions will be dramatically felt.

While major construction projects have been spared, foreign direct investment and corporate work certainly has not. Deal volumes are down on 2014, themselves lower than previous years, while deal numbers were slightly down as well.

But there are some positive notes from the expanding technology sector. The $589 million acquisition of online food-delivery service Yemeksepeti by Berlin-based Delivery Hero was one highlight, as was the Abraaj Group's $100 million investment in Hepsiburada.com, Turkey's largest online retailer. This year also saw the acquisition by Opera Mediaworks, the Norwegian mobile advertising subsidiary of browser maker Opera, of monilike, which is responsible for the majority of mobile advertising in Turkey. While foreign investment hasn't been as intensive as some would have hoped, this is a sector that certainly stands out as a strong performer.


United Kingdom


Tier 1
Allen & Overy
Freshfields Bruckhaus Deringer
Linklaters
Skadden Arps Slate Meagher & Flom
Slaughter and May
Tier 2
Cleary Gottlieb Steen & Hamilton
Clifford Chance
Herbert Smith Freehills
Sullivan & Cromwell
Tier 3
Ashurst
Davis Polk & Wardwell
Hogan Lovells
Jones Day
Macfarlanes
Milbank Tweed Hadley & McCloy
Shearman & Sterling
Weil Gotshal & Manges

It's proven to be an exceptional year for UK M&A. While there were signs of optimism last year, the actual pipeline of transactions was less than many analysts had predicted. That all changed as 2015 progressed. According to figures released by Deloitte, as of the end of the third quarter, overall UK M&A value rose by 58% compared with the same time the year before. Inbound investment, the primary driver of growth, more than doubled.

Behind the headline figures on value is the reality that the numbers and growth are driven primarily by a handful of extremely large transactions, rather than a huge increase in deal volume. Examples of these mega transactions include Shell's takeover of the BG Group, Balls' acquisition of Rexam, Sabadell's purchase of TSB, and Hutchinson Whampoa's acquisition of O2.

There is also a notable increase in investment coming from China and other emerging markets, which though not new in and of itself, has begun to outpace the flow from developed economies into emerging markets for the first time. This is driven as much by the confidence of companies in emerging markets as it is by the lack of confidence among European corporates in certain sectors to enact large transactions. In the case of China, the travails of the country's stock exchanges, has encouraged Chinese firms to look further afield.

2015 has also seen favourable conditions for UK firms to enact deals, with low interest rates, a buoyant debt market and a return of confidence after the nadir of the eurozone crisis. Technology, energy, insurance, pharmaceutical and life sciences are proving to be the most active areas and are likely to remain that way.

IPO activity has also remained strong on both the LSE and AIM markets, with Worldpay the largest listing to date in 2015. There was a drop in activity over the third quarter, linked in part to the trend of company's delaying their listings due to the UK general election. There has been particularly strong activity in the investment funds area and it's been a record year for funds listing on the main market.

Finally in the private equity space, deal activity has risen since 2014 with the UK accounting for over a third of Europe's private equity investment.


United States


Tier 1
Cravath Swaine & Moore
Davis Polk & Wardwell
Kirkland & Ellis
Simpson Thacher & Bartlett
Skadden Arps Slate Meagher & Flom
Sullivan & Cromwell
Wachtell Lipton Rosen & Katz
Weil Gotshal & Manges
Tier 2
Cleary Gottlieb Steen & Hamilton
Debevoise & Plimpton
Latham & Watkins
Ropes & Gray
Tier 3
Dechert
Fried Frank Harris Shriver & Jacobson
Gibson Dunn & Crutcher
Jones Day
Kaye Scholer
Morgan Lewis & Bockius
Morrison & Foerster
Paul Hastings
Paul Weiss Rifkind Wharton & Garrison
Shearman & Sterling
Sidley Austin

2015 has shaped up as a record year for M&A in the US. Targeted M&A reached $2.03 trillion as of mid-November, up from the $1.31 trillion in the same period in 2014. Factors behind the phenomenon include low interest rates and a remarkably resilient stock market, offset only briefly by the crash of China's stock market in August and terrorist attacks in Paris in November. A survey by KPMG of 735 executives at US corporations, private equity funds, and investment banks found that 82% of respondents were planning to make at least one acquisition in 2015, 19% planned two or more, 11% planned three, and 10% planned 11 or more. The report noted that the U.S. has been the recipient of more than 44% of global M&A deal value in 2015.

Metrics aside, it's turned out to be a significant year in the history of US M&A for the sheer size and transformative nature of deals. The TMT sector has seen some standout deals. Companies in these sectors are acknowledging the reality that in an environment where new technologies quickly become universal, their combined resources can potentially provide more of a competitive advantage than whatever modest technological edge one or another player may hold. Other sectors transformed by M&A include food and beverage and real estate finance, as detailed below.

In May 2015, the global broadband services and tech industry reeled from the announcement by Charter Communications and Time Warner Cable that they had reached an agreement to merge, with the latter corporation valued at $78.7 billion. The parties also announced an amendment to a March 2015 agreement whereby Charter would acquire Bright House Networks for $10.4 billion. Under the amended agreement, Charter and Advance/Newhouse entered a partnership of which New Charter, a public parent company established as under the Charter-Time Warner Cable merger, is to own roughly 86%.

BuzzFeed enacted a joint venture with Yahoo Japan Corporation, for the purpose of launching BuzzFeed Japan. Though not all the terms are public, it has been reported that BuzzFeed would finance its part in the venture with $50 million raised last year from Silicon Valley venture firm Andreesen Horowitz. TechCrunch reported on the same day that BuzzFeed had raised $96.3 million over the course of five funding rounds to date.

In October, Western Digital announced its $19 billion acquisition of all outstanding shares of SanDisk, expanding its range of storage solution products and assets. The acquisition may have been a godsend for SanDisk, which announced a 17% drop in its year-over-year revenues through the third quarter of 2015. Not only is the deal symbolic of consolidation in the tech sector, but it stands as perhaps the highest-value and highest-profile acquisition within the industry since Facebook's approximately $16 billion acquisition of mobile messaging systems platform Whatsapp almost exactly a year earlier. Another significant deal was HJ Heinz Company's announced merger with Kraft Foods Group, a deal in which two household names agreed to come together to form North America's third biggest food and drinks company.

Private equity highlights include Blackstone Capital's $23 billion acquisition of real-estate assets from GE Capital Real Estate; Zimmer Holdings' $14 billion purchase of Biomet from Blackstone and from fellow private equity sponsors KKR, TPG, and Goldman Sachs Capital Partners; Pamplona Capital Management's purchase of Precyse Solutions from Altaris Capital Partners and NewSpring Capital; and Life Time Fitness's acquisition by affiliates of TPG Capital and Leonard Green & Partners.