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Despite the wave of protectionism and populism which emerged as major political forces, dealmaking activity has, for the most part, navigated the sea of change and recorded strong levels of activity. This activity was certainly boosted by high levels of available capital. Many corporates have also benefitted from cash-rich balance sheets and, as a result, have been pursuing opportunities both at home and abroad. Outbound M&A, across a number of different sectors, has been a notable feature of recent activity.

UNITED STATES

Michael O’Leary

Andrews Kurth LLP

“Throughout the first six months of 2016, oil & gas commodity prices remained depressed, which affected not only M&A activity in this sector but also the ability for companies in the sector to access capital to fund their operations and growth. Except for M&A transactions by companies that were forced either to file for bankruptcy to restructure their debt while seeking protection from their creditors or to pursue out of bankruptcy restructurings, there was not much M&A activity among strategic companies, as the difference between the bid and asked prices was too much for parties to be able to bridge..”

CANADA

Robert Yalden

Osler

“Cash-rich corporate balance sheets, low financing costs and a strong US economy have contributed to vibrant Canadian M&A markets. These factors continue to drive activity at the top end of the market, as well as remarkable levels of mid-market activity. The last year also saw a surge in outbound M&A, as Canadian companies remained active internationally, particularly in the US, where Canada was the leading country with respect to the number of inbound deals. Blockbuster Canadian M&A activity was driven by acquisitions of non-Canadian targets across a range of sectors, notably financial services, energy and technology.”

ARGENTINA

Fernando Garabato

BDO Argentina

“Over the last 12 months, the number of agreements registered and the level of investment has increased, following the trend seen in recent years. Although some volatility has been seen in the region, mainly as a result of the political crisis in Brazil, regardless, Brazil remains the main player in the region. The dynamics of the Argentine M&A market over the same period are growing in a significant manner. The real estate and financial sectors stand out as the most active by number of transactions. The relaxing of previous currency controls, which were created for foreign investors, and better economic policies have resulted in higher capital inflows.”

COLOMBIA

Juan Pablo Caicedo De Castro

Gómez-Pinzón Zuleta Abogados

“Two major trends have been shaping M&A activity in the last 12 months in Colombia: infrastructure projects and energy generation and transmission projects. The infrastructure sector, in particular, has been a significant driver of M&A transactions. Original sponsors of the projects adjudicated under the 2013 fourth-generation programme of highways (Programa 4G) are now actively seeking financial and strategic investors in order to bring liquidity and financial muscle to the projects, thereby sparking increasing activity in both infrastructure deals and project finance. Several factors can explain the explosion of infrastructure M&A in the Colombian market.”

GERMANY

Christoph Holstein

Clifford Chance Deutschland LLP

“Germany has been an M&A hotspot within the European Union. From a geopolitical point of view, the French elections concluded in a decidedly pro-EU manner and we expect the increased political certainty to drive further M&A deals in the region as a whole – assuming that German elections fare similarly, and notwithstanding ‘hard’ or ‘soft’ Brexit negotiations. From an inbound perspective, Chinese M&A into Europe has continued at high levels in the last 12 months – despite capital controls introduced in China during part of that period – with strategic M&A deals by Chinese state-owned and private enterprises expected to further bounce back in the second half of 2017.”

PORTUGAL

Eduardo Rui Paulino

Morais Leitão, Galvão Teles, Soares Da Silva & Associados

"M&A activity has been increasing over the last 12 months, especially in the first half of 2017. Increased market confidence and negative returns in low risk investments, coupled with some good investment opportunities, has captured the attention of many sophisticated international investors. I believe we are witnessing the end of the restructuring process in many sectors and slowly, yet surely, moving toward a slightly more seller-friendly environment. As always, insightful and better-prepared investors take advantage of being the first to pick up the best investment opportunities. Portuguese companies are great prospects – not only are there many great businesses in need of capital for restructuring, there is also a tremendous potential for international development, not only within the EU, but also considering Portugal’s close ties with American, African and Asian Portuguese-speaking jurisdictions, such as Brazil, Angola, Mozambique and Macao in China."

ROMANIA

Silviu Stoica

Popovici Nitu Stoica & Asociatii

“M&A activity in Central and Eastern Europe in 2016 fell compared to the record breaking year 2015, as predicted by the vast majority of dealmakers. This anticipated yet mild slowdown was demonstrative of the economic and political uncertainty that dominated the region, and which had a direct impact on investors’ appetite for M&A, combined with many sellers’ unwillingness to put their businesses up for sale when valuations failed to meet their expectations. Overall M&A activity in Central and Eastern Europe in the past 12 months showed clear signs of uncertainty and confusion which led to inertia.”

UKRAINE

Iryna Nikolayevska

Kinstellar LLC

“The Ukrainian M&A market is showing signs of recovery from the downturn of 2014-2015. However, the overall number and volume of deals has grown quite modestly. Last year, domestic dealmakers were quite active, while foreign investors were more cautious about returning to Ukraine. We saw many local distressed deals, including exits of Russian investors, in all major sectors of the economy – especially in the banking and financial sectors most affected by sanctions, as well as some global transactions involving Ukrainian assets. Ukraine remains a buyers’ market with a number of companies that are undervalued compared to similar assets in nearby countries.”

INDIA

Vivek K Chandy

J. Sagar Associates

“India has seen a significant amount of M&A activity over the last 12 months. It is likely that this trend will continue over the next 12 months as well. The main factor that is driving deals is the country’s positive economic outlook. There is a general perception that the government is keen on encouraging economic growth, and is willing to take necessary steps in this regard. Over the past 12 months, the government has implemented significant legislation intended to reform the real estate sector and the indirect tax regime. The recent introduction of a nationwide goods and services tax has been received favourably by the industry.”

CHINA

Simon Luk

Winston & Strawn

“Over the past 12 months, the M&A landscape in China has been shaken up by a regulatory tightening of capital outflow on China’s outbound transactions. From being one of the most sought after and prolific bidders on the international transactions scene in every conceivable industry, Chinese outbound investments have become rarer, unreliable and sometimes difficult to close due to lack of foreign currency. As a result, many foreign companies as sellers or joint venture partners are requiring potential Chinese investors to prove offshore financial resources before sending them bid documents and entering into discussions.”

MYANMAR

Krishna Ramachandra

Duane Morris & Selvam LLP

“Foreign investment in Myanmar remains positive despite a slowdown over the last year following the transition to a civilian led government. Myanmar is one of the most natural resource-rich countries in Asia with plentiful supplies of oil & gas reserves, various minerals, jade, precious stones and gems, forest products and solar and hydro power project potential. While there has been very little exploration of Myanmar’s natural resources due to a lack of developed exploration techniques and availability of equipment, the geographical location of Myanmar is central to key markets. In addition, the cost of local labour remains low, with the minimum wage set at approximately US$56 per month for a standard five-day working week.”

JAPAN

Kaoru Takamatsu

Hayabusa Asuka Law Offices

“M&A transactions have been increasing in Japan in recent years due to business succession needs. The rapid aging of business owners of small and medium-sized enterprises, together with the declining national birth rate, have made it difficult to secure successors among business owners’ relatives compared to in the past. For such reasons, the necessity of business succession through M&A transactions has been increasing year by year. In addition, cross-border M&A activity from Japanese companies has been increasing across a variety of industries.”

AUSTRALIA

Vijay Cugati

Allens

“In 2016, the Australian M&A market was shaped by various key trends including: a strong appetite for infrastructure assets; a willingness by state governments to privatise industrials and utilities; and continued competition in sales processes for limited assets, with bidders from a multitude of backgrounds. Factors driving these trends have included a current economic environment in Australia of low interest rates, low inflation and an attractive exchange rate for foreign investors.”

NIGERIA

Michael Orimobi

Tokunbo Orimobi LP

 “Due to the decline in oil prices, recession and currency depreciation, the resulting drop in foreign exchange earnings and uncertainty about the economy, there has been a decline in M&A transactions in Nigeria. However, there has been an increase in restructuring and consolidation as companies and organisations seek to insulate themselves from the recession. Regardless, Nigeria attracted significant investments in reported M&A transactions in 2016. As a result of the currency devaluation, assets are cheaper than they would normally cost foreign investors.”

CONTRIBUTORS

Allens

Andrews Kurth LLP

BDO Argentina

Clifford Chance Deutschland LLP

Duane Morris & Selvam LLP

Gómez-Pinzón Zuleta Abogados

Hayabusa Asuka Law Offices

J. Sagar Associates

Kinstellar LLC

Morais Leitão, Galvão Teles, Soares Da Silva & Associados

Osler

Popovici Nitu Stoica & Asociatii

Tokunbo Orimobi LP

Winston & Strawn