Global Manda Deals PDF

2017 M&A
Predictor
kpmg.com/predictor
KPMG International
Contents
Introduction
01
Global sector review
Global overview
of M&As Financial Services 10
Healthcare & Pharma 12
Industrial Markets 14
Consumer Markets 16
Energy & Utilities 18
04
Chemicals & Basic Materials 20
Technology 22
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
In-depth
commentary
Banking 26
Insurance 28
Consumer Markets 33
Oil and Gas 34
M&A Tax 36
24
Introduction
Welcome to the new and expanded
2017 M&A Predictor.
After a record-breaking year for M&A

in 2015, it is perhaps no surprise that
overall transactional activity was more
subdued in 2016.
Geopolitical risks and a stricter

regulatory environment both played a
part in dampening appetite. Companies
were also busy integrating or separating
businesses following the deluge of
transactions previously announced.
Leif Zierz
Global Head of Advisory
Managing Partner, KPMG in Germany
2017 M&A Predictor 1
A change in approach
In terms of the transactional activity in number as companies look to
that did occur in 2016, cross-border other sectors to grow capabilities
deals remained the most resilient, in or competencies.
terms of both deal value and volume.
With increasing talk of protectionism
Although cross-border deal value
in key markets, it will be interesting
was down 3 percent compared to
to see the impact on cross-border
2015, the drop is much smaller than
transactions. Will companies start
the -17 percent decline in total deals.
looking closer to home for potential
Similarly, cross-border deal volume
deals? We feel there is only limited
only declined 2 percent over the same
capacity to do so, as buyers are
period, compared with a fall of 7
frequently looking beyond their current
percent in total deals.
geography or competencies to grow.
The decline in transactional activity
Nevertheless, M&A remains crucial
during 2016 suggests that many
for companies seeking change.
businesses are adopting a ‘wait
Businesses need to transform more
and see’ approach to their growth
radically and much faster than is
strategies. But this is not sustainable.
possible organically. CEOs know
Technological disruption is happening
this, as we have seen in the CEO
everywhere. And as our CEO
Outlook Survey’s findings regarding
Outlook Survey reveals, this is driving
their sentiment for the next 3 years.
companies to change their business
But we expect this to be a long-term
models, sometimes radically, as
trend, rather than a short-term reaction
they recognize the need to reinvest
– and one for which the top global
in themselves.
corporates are well placed. Indeed,
This change in approach is evident in market capacity for M&A is predicted
our analysis, which looks at possible to rise by 17 percent in 2017, driven
trends in cross-sector deal making. by healthy bottom lines and large
There has been a lot of speculation corporate balance sheets.
and commentary about cross-sector
We look forward to an exciting
deal trends. The data separates fact
journey in 2017, as we continue to
from fiction. The falling value of
help our clients successfully balance
announced or completed deals overall
opportunities and risk amid a rapidly
should not lull us into complacency.
changing environment.
Cross-sector deals are growing
Leif Zierz
Global Head of Advisory
Managing Partner, KPMG in Germany
2 2017 M&A Predictor
2017 M&A Predictor
KPMG International’s M&A Predictor is a
forward-looking tool that helps member
firm clients to forecast worldwide trends in
mergers and acquisitions. All the raw data
within the Predictor is sourced from S&P
Capital IQ.
The Predictor was established in 2007. It looks

at the appetite and capacity for M&A deals by
tracking and projecting important indicators
12 months forward. The rise or fall of forward
P/E (price/earnings) ratios offers a good guide
to the overall market confidence, while net
debt to EBITDA (earnings before interest, tax,
depreciation and amortization) ratios helps
gauge the capacity of companies to fund
future acquisitions. The Predictor covers the
world by sector and region. It is produced
using data comprising 2,000 of the largest
companies in the world by
market capitalization.*
All raw deal data is sourced from Dealogic, as

of December 31, 2016. Transactions where a
trade buyer has taken a minimum 5 percent
shareholding in an overseas company are
reflected as a cross-border deal. Entities
considered for analysis include Strategic
Buyers, Financial Sponsors, Government
Institutions, and Sovereign Wealth Funds. All
cross-border deals involving China and Hong
Kong/British Virgin Islands/Cayman Islands
are treated as domestic Chinese transactions.
*The financial services and property sectors are
excluded from our analysis, as net debt/EBITDA
ratios are not considered relevant in these industries.
Where possible, earnings and EBITDA data is on a
pre-exceptional basis with the exception of Japan,
for which GAAP has been used.
3
2017 M&A Predictor
Global M&A overview
Overall, the volume and value of M&A
transactions in 2016 is down from the record Philip Isom
highs achieved in 2015. Nevertheless, 2016 Global Head
deal value remained robust in comparison with of M&A
Partner, KPMG
pre-2015 levels and cross-border deals remain in the USA
very healthy.
The top 100 global deals are helped to make Q3 and Q4 record
dominated by the United States, quarters for mega-deals.
led by the pending US$107.8 billion
Following the U.S. election, the
takeover of Time Warner by AT&T. In
potential pro-business political
total, the United States accounted
environment, in the form of tax and
for 54 of the top 100 deals in terms of
regulatory reforms, could be a strong
target, and 45 of the top 100 in terms
driver of 2017 M&A activity.
of bidder.
October proved to be a record
Over one-third of the top 50
month, with nearly half a trillion
cross-border deals also involved
dollars of M&A announced globally.
targets in the United States, but
Record-breaking volume was driven
bidders were more evenly spread,
by CenturyLink’s US$34 billion
with deals originating from many
acquisition of Level 3 and the merger
different countries.
of GE’s oil and gas division with Baker
Several of the themes that emerged Hughes, as well as the AT&T/Time
in 2015 provided tailwinds for M&A Warner mega-merger. However,
in 2016, including near-zero interest President Trump has vowed to block
rates and companies looking to M&A the AT&T and Time Warner deal,
to fuel growth and combat slowing further providing uncertainty for all
momentum in the global arena. mega-deals announced in the second
Thematically, economic and political half of 2016.
uncertainty drove anemic volume in
the first half of the year. However, the
anticipated rate hikes and uncertainty
around policy shifts in 2017 have
10-year Global Deal Trends (Volume & Value)
Value
Deals (USDbn)
50,000 $6000
44,561 43,439 44,293
38,481 45,823 40,873
$5000
40,000 42,831 41,698
38,616 38,648 38,104
$4000
30,000
$3000
20,000
$2000
$4,365.6
$3,694.3
$2,459.5
$2,944.4
$2,890.4
$4,854.5
$5,179.1
$2,914.0
$3,010.2
$3,797.3
$4,011.1
10,000 $1000
0 $0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: 2017 M&A Predictor, KPMG International
Announced Value (USDbn) Announced Deals
Trend analysis Top 10 Announced Deals in 2016 (by Value)

The total value of deals, remains extremely healthy compared
Target Name Bidder Ultimate Parent Name Value (USDm)
to previous years. In fact, the value of completed deals
exceeded by some margin the value of deals completed Time Warner Inc AT&T Inc $107,888
in 2009-2013, despite the number of deals being fewer. Monsanto Co Bayer AG $66,341
The average deal value declined slightly in 2016 to US$105 Reynolds American Inc British American $58,073
million, down from a 2015 peak of US$119 million. However, (57.8%) Tobacco plc - BAT
this is significantly above the 2009-2013 range of US$64 Energy Transfer Sunoco Logistics $51,456
million to US$78 million. Partners LP Partners LP
NXP Semiconductors Qualcomm Inc $46,990

Global predicted appetite is projected to marginally increase
NV
during 2017, driven by flat market capitalizations and modest
Syngenta AG China National Chemical $46,940
net profit growth. Predicted capacity is also projected to go
Corp - ChemChina
up over the same period by a healthy 17 percent, thanks to a
Spectra Energy Corp Enbridge Inc $42,962
decline in net debt and growth in EBITDA.
Linde AG Praxair Inc $42,503
Latin America, and the Africa and Middle East regions are
jointly the biggest climbers in terms of predicted appetite, Level 3 CenturyLink Inc $33,676
Communications Inc
up 7 percent almost completely because of rising market
capitalizations. ASPAC (others) is the standout region for Source: 2017 M&A Predictor, KPMG International
predicted capacity, at 22 percent. All other regions were

showing healthy increases ranging from 10 percent to
18 percent.
Top 10 Announced Cross-Border Deals in 2016 (by Value)
Target Name Target Country Bidder Ultimate Parent Name Bidder Country Value (USDm)
Monsanto Co United States Bayer AG Germany $66,340.6

Reynolds American Inc (57.8%) United States British American Tobacco plc - BAT United Kingdom $58,072.7
NXP Semiconductors NV Netherlands Qualcomm Inc United States $46,990.1
Syngenta AG Switzerland China National Chemical Corp - ChemChina China $46,940.5
Spectra Energy Corp United States Enbridge Inc Canada $42,962.1
Linde AG Germany Praxair Inc United States $42,503.2
ARM Holdings plc (98.5768%) United Kingdom SoftBank Group Corp Japan $31,791.7
Sky plc (61.5969%) United Kingdom Twenty-First Century Fox Inc United States $23,149.2
London Stock Exchange Group plc (Bid No 1) United Kingdom Deutsche Boerse AG Germany $14,206.4
Columbia Pipeline Group Inc United States TransCanada Corp Canada $13,216.4

10-year Cross-Border Deal Trend (Volume & Value)
Value
Deals (USDbn)
12,000 11,591 11,532 $2000
11,132
10,172 10,025
9,656 9,323
8,581 9,199
9,000 $1500
9,142
8,326
6,000 $1000
3,000 $500
$1,094.8
$1,432.4
$1,392.8
$1,815.6
$1,112.5
$1,119.1
$598.8
$879.0
$762.0
$871.0
$957.3
0 $0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Announced Value (USDbn) Announced Deals Source: 2017 M&A Predictor, KPMG International
Cross-border deals Cross-sector deals

Like the global trend, the number of cross-border deals fell The percentage of cross-sector deals in terms of the total
back to 2012-2014 levels. The overall value of cross-border number of deals has been steadily rising from the low-30s in
deals, however, reached their highest level since 2007, at 2006 to 43 percent of all deals in 2015 and 2016. The value of
US$1.3 trillion. This represents 35 percent of the value of all cross-sector deals has wavered slightly, but has also seen an
deals globally and is 5 percent higher than 2011. increase to 24 percent of total deal value in 2016, a 2 percent
increase over 2015.
The proportion of cross-border deals has remained relatively
steady over the last 8 years, ranging between 22 percent and The average deal size of cross-sector deals is generally
24 percent. The average size of cross-border deals, however, smaller, at around 50 percent of the average size of all deals
has risen significantly over the last 3 years to US$149 million. and about one-third the size of the average cross-border deal.
This is its second highest level in 10 years, and compares Most cross-sector deals are commonly seen as bolt-ons to
to an average cross-sector deal value of between US$40 to new or existing capabilities.
US$60 million over the last 5 years.
China and the United States were the dominant players, with
Companies in Asia and Europe continue to be acquisitive. 16 of the top 25 cross-sector deals involving bidders from
Supported by China’s “going out” policy of encouraging these countries. Cross-sector deals tended not to be cross
outbound investment, Chinese companies have helped border. Among the top 25, 16 deals were domestic. This is
to drive M&A in 2015 and 2016. However, increasing especially true for the dominant cross-sector countries: 5 out
protectionist rhetoric in certain countries, the new Trump of 7 Chinese deals and 8 US deals were domestic.
Administration, Brexit and upcoming elections in Europe are
In terms of acquisition targets, the United States leads the
creating uncertainty. China National Chemical Corp.’s US$43
pack with 11 of the top 25 cross-sector deals by target,
billion takeover of Switzerland’s Syngenta AG has recently
followed by China with 5 deals.
been approved by the Committee on Foreign Investment
in the United States (CFIUS), and is awaiting European
regulators’ approval. Leading into 2017, Chinese outbound
activity is facing increased oversight by Beijing, targeting
deals considered “non-core” or “speculative”.
Globally, increased uncertainty around international

trade policy may impact M&A in the near-term, however,
the long-term outlook remains positive for increased cross-
border activity.
Global sector review
We review global sector deal performance over the past year,
focusing on key trends likely to affect the global M&A landscape.
Our forward-looking M&A Predictor tool provides a perspective
for predicted appetite and predicted capacity in 2017.
— Financial Services
— Healthcare & Pharmaceuticals
— Industrial Markets
— Consumer Markets
— Energy & Utilities
— Chemicals & Basic Materials
— Technology, Media & Telecoms
Financial Services
Mark Flenner
Co-head of Silvano Lenoci
Global Financial Corporate
Services M&A Finance Partner
KPMG in the UK KPMG in Italy
M&A activity in the Financial Services The insurance market accounted there is weakness in certain currencies
sector during 2016 was down for several deals in 2016, but the and interest rates remain low across
marginally from 2015 in terms of the banking sector continues to endure a the globe, it will naturally breed cross-
volume of deals, but is in line with the challenging environment, according border activity.”
volume of deals between 2011-2014. to Silvano Lenoci, Corporate Finance
Partner, KPMG in Italy.
“There has been a drive for
consolidation in the market, whether “The banking sector continues to be
that is domestic or cross-border,” under pressure,” says Lenoci. “There
says Mark Flenner, Co-head of Global are still a lot of local issues to work
Financial Services M&A, KPMG. “The through, not only in terms of new
regulatory burden and associated costs regulations like Basel IV, but also a
are increasing, so many companies general lack of capital. There’s also still
are looking to spread that out across a huge legacy on the non-performing
a wider base. At the same time, there loans side for the next 3 to 5 years.”
are limited opportunities for domestic
North American buyers were
organic growth, so people are buying
particularly busy in 2016, with the
capability, buying product or buying
United States and Canada filling
access to customers.”
2 of the top 5 slots in terms of
Valuations have also increased, says deal origination.
Flenner. “Many buyers are paying a
This is expected to continue into
lot of money for the right business
2017 when, despite the relatively
– and there has been a lot of private
low volume of announced deals, the
equity activity across the globe. Global
level of M&A activity is expected to
pension funds, too, have been taking
stay strong, particularly in the mid-
a more active principal investment
market range.
strategy than they have done before.”
“The big question Financial Services
There continues to be a steady rise
organizations are grappling with is
on bolt-on acquisitions as elevated
‘how do you find more customers?’
valuations have deterred private equity
That’s the issue we expect to see
firms. Add-ons made up 64 percent of
driving M&A transactions over the
buyout activity last year,
next few years, particularly in sectors
up from 61 percent in 2015,
like fintech,” says Lenoci. “As long as
according to Pitchbook.
10-year trend for Financial Services (Volume and Value)
Value
Deals (USDbn)
5,000 $1,200
4,215 4,313 4,295 4,247 4,219
3,958
4,000 3,646 3,508 $900
3,532 3,596
3,000 3,149
$600
2,000
$300
$1,020.1
1,000
$570.7
$484.3
$362.3
$430.0
$345.3
$338.3
$544.7
$918.3
$681.3
$341.8
0 $0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Top-10 Deals for Financial Services Largest countries of origin by

Top-10 Deals for Financial Services Financial Services
UAE — First Gulf Bank PJSC Largest countries of origin by Financial Services
3 July
2016
UAE —
National Bank of
Abu Dhabi PJSC
$14,841.5 USDm Value (USDm) # of deals
China $18,241.8
London Stock Exchange
UK —
Group plc (Bid No 1)
59
Germany $16,031.7
23 Feb
2016
Germany — Deutsche Boerse AG $14,206.4 USDm 101
Canada $15,092.2 29
US — CIT Group Inc (Commercial
aircraft leasing business) Japan $8,059.7
6 Oct
2016
China —
Bohai Capital
Holding Co Ltd
$10,000.0 USDm 34 54
US $7,312.1
France — Credit Agricole SA
(38 Regional Banks)
17 Feb
2016
France — Rue La Boetie SAS $8,697.2 USDm
China — CNPC Capital Co Ltd (40%)
5 Sep China — Jinan Diesel Engine Co Ltd $7,968.8 USDm

Largest destination countries by
2016
US — Endurance Specialty
Holdings Ltd Financial Services
4 Oct
2016
Japan — Sompo Holdings Inc $6,284.9 USDm
Largest destination countries by Financial Services
France — AXA SA (10%) Value (USDm) # of deals
1 Apr
2016
France — AXA SA $5,704.4 USDm US $34,445.1 3
UK 41
$22,925.7
Bermuda — Allied World Assurance 84
Co Holdings AG
10
18 Dec
2016
Canada —
Fairfax Financial
Holdings Ltd
$4,855.1 USDm Bermuda $6,112.6
China $4,576.8
France — GE Money Bank SCA
76
23 Jun
2016
France —
Cerberus Capital
Management LP
$4,600.0 USDm Norway $4,468.8
Norway — Lindorff Group AB
14 Nov
2016
Sweden — Intrum Justitia AB $4,434.8 USDm
Ultimate Target Name Ultimate Bidder Name Pending Completed
Healthcare &
Pharmaceuticals
Andrew Nicholson
Global Head of
Healthcare M&A
KPMG in the UK
Despite the significant number of “There has been a huge amount of EBITDA, is predicted to improve by
mega deals over US$10 billion in spend between the United States, 20 percent, as healthcare companies
the Healthcare and Pharmaceuticals the United Kingdom and China, as continue to pay down debt.
sector – in fact, all the top 10 deals expected, with China in particular
These numbers support the
exceeded US$5 billion – the value accounting for more smaller-value
expectation that there will still be a
of announced deals in 2016 is only a deals. Chinese buyers are keen to
respectable volume of deals next year,
little over half that of 2015. But the acquire IP from Western companies
yet the value of deals may drop due
volume of transactions is similar to the to drive growth at home, so it’s no
to announced tax changes and the
level achieved in previous years, with surprise to see Chinese corporates
reduction in announced deals in 2016.
the exception of the record number so active in originating transactions.
in 2015. “The level of transactions In the United States, slower domestic Nicholson believes the fundamentals
is likely to have been influenced by growth is driving corporates to look of the sector remain strong and, while
forthcoming changes to the rules overseas to increase earnings, whether deal levels may not match 2015, he
on tax inversion deals in the United in Europe or beyond,” Nicholson notes. expects them to remain on a par with
States,” explains Andrew Nicholson, preceding years.
“Japan and Switzerland have also
KPMG’s Global Head of Healthcare “The changes around tax inversion
been active in seeking growth outside
M&A. “The changes will make it less may kill a few potential mega-mergers
their home markets via M&A. It’s
attractive for corporates to use M&A but in terms of day-to-day acquisitions,
common for Japanese corporates to
transactions to drive tax efficiencies, debt is still cheap, cashflow is
buy overseas. Switzerland has some
with the result that corporates may good and P/E ratios are strong,
big pharmaceuticals that tend to make
have been keen to complete deals so corporates are still likely to see
limited, but large transactions,” he says.
before the full effect of changes M&A as an attractive option to grow
is felt.” The M&A Predictor data suggests a
their earnings.”
similar message. Corporate appetite
The same 3 countries accounted for
for M&A transactions, as indicated
the highest number of both outgoing
by forward P/E ratios, is expected to
and incoming deals. The picture is
decline by 11 percent over the course
less consistent in terms of deal
of 2017. The capacity to transact,
values, however.
however, as measured by net debt/
10-year trend for Healthcare & Pharmaceuticals (Volume and Value)
Value
Deals (USDbn)
3500 $650
3,004
2,877 2,818 2,832 2,789
2800 2,583 2,614 $520
2,396 2,480
2,192
2100 2,289 $390
1400 $260
$130
$350.9
$275.3
$236.3
$248.4
$242.0
$578.0
$325.8
$175.7
700
$219.5
$451.5
$307.2
0 $0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Top-10 Deals for Healthcare & Pharma Largest countries of origin by

Top-10 Deals for Healthcare & Pharma Healthcare & Pharma
US — St Jude Medical Inc Largest countries of origin by Healthcare & Pharma
Value (USDm) # of deals
28 Apr
2016
US — Abbott Laboratories $29,439.8 USDm US $26,333.2
31
US — Fortive Corp 28
China $7,455.0
13 Jun
2016
US — Existing Shareholders $19,720.3 USDm Japan 142
$7,390.7 47
US — Medivation Inc (Bid No 2)
Germany $6,779.2
22 Aug
2016
US — Pfizer Inc $14,321.5 USDm Switzerland $5,313.3
85
Sweden — Meda AB
10 Feb
2016
US — Mylan NV $9,915.5 USDm Largest destination countries by
US — Stemcentrx Inc Healthcare & Pharma
28 Apr
2016
US — AbbVie Inc $9,800.0 USDm Largest destination countries by Healthcare & Pharma
US — Alere Inc US $18,674.8
44
1 Feb
2016
US — Abbott Laboratories $8,390.0 USDm UK $13,872.0 16
10
US — MultiPlan Inc Sweden $10,649.9
Hellman & Friedman LLC; 182
5 May
2016
US — GIC Pte Ltd;
Leonard Green & Partners LP
$7,500.0 USDm Spain $6,863.6
54
IDC Salud Holding

Spain —
SLU-Quironsalud
Germany $6,148.2
5 Sep
2016
Germany — Fresenius SE & Co KGaA $6,428.2 USDm
US — AmSurg Corp
Global M&A Predictor for Healthcare
Global M&A Predictor for Healthcare
15 Jun
2016
US —
Envision Healthcare
Holdings Inc
$6,092.4 USDm Capacity
+20% [Net Debt/EBITA]
US — Team Health Holdings Inc
31 Oct
2016
US — Blackstone Group LP $6,022.8 USDm
100%
-11% Appetite
[Forward P/E ratio]
Industrial Markets
Danny Bosker
Corporate Finance
Partner
KPMG in the
Netherlands
After a blistering 2015, the Industrial The US$7.7 billion acquisition of “Technology businesses are expected
Markets sector had another very active Siemens’ wind power business by to remain popular targets for
year for M&A transactions in 2016, Spain’s Gamesa is a case in point. acquirers. Another key sector could be
similar to the levels seen between Gamesa gains from Siemens market- environmental technologies – heating,
2011 and 2014. Two of the top 10 leading position in offshore wind ventilation and insulation, anything to
deals exceeded US$10 billion, with the energy, while delivering increased do with CO2 reduction. Interest has
target and bidder both stemming from opportunities for Siemens to develop been growing quite rapidly over the
the United States. its onshore business. past year. Combined with increasing
interest from Asian buyers in this
“There have been some global factors Looking ahead to 2017, Bosker
sector of the market, it looks set to
that affected the market over the expects M&A activity to remain high,
be another strong year for industrial
course of 2016, particularly at the top particularly at the sub-US$1 billion
markets deals,” says Bosker.
end. Despite that, the appetite for level, and with continuing strong
deals was very strong,” says Danny interest from Asia.
Bosker, KPMG Corporate Finance
His optimism is reflected in the
Partner, KPMG in the Netherlands.
M&A Predictor data. This shows
“One of the main factors driving that forward P/E ratios, our measure
M&A activity in Industrial Markets in of corporate appetite for M&A, are
2016 was the hunt for technological expected to rise by 9 percent over the
innovation. Companies recognize that course of 2017 – the second-highest
to remain competitive, they need to sector increase. This compares to a
invest in technology to transform their predicted overall increase of 1 percent
businesses. Sitting back and waiting is globally. The capacity to transact is
not an option. They need to go out and also expected to increase, with net
either develop new business models debt/EBITDA, our measure of capacity,
or technologies, or acquire them.” showing a 14 percent improvement
over the same period.
10-year trend for Industrial Markets (Volume and Value)
Value
Deals (USDbn)
10,000 9,503 9,231 9,372 $800
8,242 8,424
8,949
7,500 8,107 7,890 6,622 $600
7,547 7,528
5,000 $400
2,500 $200
$300.9
$552.9
$659.7
$446.9
$393.6
$359.5
$352.6
$466.5
$458.3
$376.3
$617.0
0 $0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Top-10 Deals for Industrial Markets Largest countries of origin by

Top-10 Deals for Industrial Markets Industrial Markets
US — Tyco International plc Largest countries of origin by Industrial Markets
25 Jan
2016
US — Johnson Controls Inc $20,792.9 USDm Japan $18,172.3
105 170
US — ADT Corp
China $17,258.1
16 Feb
2016
US — Protection One Inc $12,388.7 USDm Canada $16,599.5
298 125
China — Wuhan Iron & Steel Co Ltd US $16,531.9
23 Sep
2016
China — Baoshan Iron & Steel Co Ltd $9,406.0 USDm Germany $11,735.2
104
China — YTO Express Co Ltd
23 Mar $9,074.8 USDm

2016
China — Dalian Dayang Trands Co Ltd
Australia — Asciano Ltd (86.6669%) Industrial Markets
Canada — Canada Pension Plan
Investment Board-CPPIB
$8,557.3 USDm Largest destination countries by Industrial Markets
(27.5%/19.1%/16%/12%/12%);
Global Infrastructure Partners; US $27,753.3
GIC Pte Ltd; British Columbia
68
15 Mar Investment Management Corp; Australia
China Investment Corp $13,352.5
2016 257
Germany $12,739.0 203
US — BE Aerospace Inc
23 Oct
2016
US — Rockwell Collins Inc $8,228.5 USDm UK $10,489.4
75
Spain 126
$9,605.5
Spain — Siemens AG (Wind Business)
17 Jun
2016
Spain —
Gamesa Corporacion
Tecnologica SA
$7,736.2 USDm
Australia — Port of Melbourne Corp
(50-year lease of the Port Global M&A Predictor for Industrials
of Melbourne)
Australian Government
$7,308.9 USDm Global M&A Predictor for Industrials
Australia — Capacity
Future Fund; Global
Infrastructure Partners; [Net Debt/EBITA]
QIC Ltd; Ontario Municipal
19 Sep Employees Retirement
Appetite +14%
2016 System — OMERS
[Forward P/E ratio]
Fomento de Construcciones y
Spain —
Contratas SA — FCC (24.5925%)
+9%
4 Mar
2016
Mexico — Grupo Carso SAB de CV $6,741.5 USDm
China — SF Holdings (Group) Co Ltd
23 May
2016
China —
Maanshan Dingtai Rare Earth
& New Materials Co Ltd
$6,610.1 USDm100%
Consumer Markets
James Murray
Global Head of
Consumer M&A
KPMG in the UK
Despite the broader backdrop of such as Mondelez’s sale of its sugar “There are a number of factors
political and economic uncertainty in confectionery business in France and creating a positive environment for
2016 it was still a strong year for M&A Vegemite in Australia.” further deal activity in 2017: active
deal values in the Consumer sector, challenge of the traditional FMCG
In the mid cap market, he adds,
with the third largest global deal of business model from predators seeing
activity was driven by a number of
2016 originating in this sector. While value and shareholders wanting higher
smaller but attractive higher-growth
the levels are below 2015, they are returns; corporate balance sheets in
companies being acquired by larger
significantly above the levels seen good shape; Private Equity interest
corporates seeking to drive sales
between 2009 and 2013. “There in consumer assets remains strong;
or gain access to faster growth
were several large strategic deals in financing costs low. However, the
categories such as healthy snacking
2016 that bumped up the overall value wider macro outlook and evolving
and free-from products.
of deals in the sector, such as the consumer confidence may impact
US$46 billion BAT bid for Reynolds The United States, China and Japan the appetite for further M&A, but
American and Danone’s US$10 billion remained the most-prolific originators this will be a market-by-market basis,”
acquisition of WhiteWave Foods. 2017 of deals with France and Singapore says Murray.
has started strongly and we expect trailing behind.
According to the M&A Predictor,
further large cap activity following
“The theme of capital flows from Asia corporate appetite for M&A among
Reckitt’s deal to buy Mead Johnson
to Europe continues to be evident businesses in the Consumer
for $17 billion, the €50 billion Luxottica/
with significant interest from Asian Discretionary and Consumer Staples
Essilor merger and Kraft Heinz’s $143
buyers in several businesses that are sectors, as measured by forward P/E
billion aborted approach for Unilever,”
on the market, or that soon will be. ratios, is expected to rise by 8 percent
says James Murray, Global Head of
Not only from China, but also Japan, and 1 percent, respectively. Similarly,
Consumer M&A, Deal Advisory.
where there is a trend toward acquiring the capacity to transact is predicted to
“These deals represent an ongoing European businesses because they are improve by 16 percent and 10
move towards consolidation, with not achieving the growth domestically. percent, respectively.
a hard focus on cost reduction as Asahi’s acquisition of Peroni is a good
well as synergies to drive margin example of this and we expect to see
improvement and earnings growth. In further activity in the beer sector as
some sectors, businesses are looking part of the fallout of the AB InBev
to move from being strong regionally deal,” says Murray.
to truly global players. At the same
time, large conglomerates are also
refining and focusing their portfolios,
10-year trend for Consumer Markets (Volume and Value)
Value
Deals (USDbn)
7500 $640
6,362
6,351 6,163
5,910 5,733
5,383 5,340
5,815 5,127 $480
5000 5,693
5,373
$320
2500
$160
$575.9
$454.8
$226.4
$546.3
$383.5
$188.8
$218.2
$310.1
$421.5
$367.8
$277.4
0 $0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Top-10 Deals for Consumer Markets Largest countries of origin by

Top-10 Deals for Consumer Markets Consumer Markets
Reynolds American Inc Largest destination countries by Consumer Markets
US —
(57.8%) Value (USDm) # of deals
21 Oct
2016
UK —
British American Tobacco
plc — BAT
$58,072.7 USDm US $1,01,684.0
55
UK — WhiteWave Foods Co Japan $8,774.2 15
7 Jul
2016
France — Danone SA $12,466.7 USDm UK $8,529.7
194
Yum China Holdings Inc Czech 138

China —
(95%) $7,726.9
Republic
17 Oct
2016
China — Existing Shareholders $9,526.7 USDm France $6,489.8
20
Japan — Sharp Corp (66.06%)
25 Feb
2016
Taiwan —
Hon Hai Precision Industry
Co Ltd (57.5% / 8.41%);
$7,984.0 USDm Largest destination countries by
Czech
—
SABMiller Ltd Consumer Markets
Republic (CEE beer brands) Largest countries of origin by Consumer Markets
13 Dec
2016
Japan — Asahi Group Holdings Ltd $7,726.9 USDm Value (USDm) # of deals
UK $60,284.5
57
US — Adient plc 107
China
17 Oct
2016
US — Existing Shareholders $7,235.3 USDm $29,599.4
109
France $18,402.3
US — Lamb Weston Holdings Inc
US $14,591.4
1 Nov
2016
US — Existing Shareholders $6,732.3 USDm 174
76
Japan $14,448.4
South
— Bid Corp Ltd
Africa
30 May
2016
South
Africa
— Existing Shareholders $6,562.0 USDm Global M&A
Global M&A Predictor
Predictor for
for Consumer Consumer Discretionary
discretionary
Hilton Worldwide Holdings

US —
Inc (25.0056%)
Capacity
[Net Debt/EBITA]
24 Oct
2016
China —
Hainan Traffic Control
Holding Co Ltd
$6,496.9 USDm
Appetite +17%
US — Cabela's Inc [Forward P/E ratio]
3 Oct
2016
US —
Bass Pro Group LLC-Bass
Pro Shops
$5,553.7 USDm
100%
+2%
Global M&A Predictor for Consumer Staple

Global M&A Predictor for Consumer staple
Capacity
[Net Debt/EBITA] +9%
-4% Appetite
[Forward P/E ratio]
Energy & Utilities
Henry Berling
Managing Director and Head of
US Energy Investment Banking
for KPMG Corporate Finance
KPMG in the US
Although the number of deals fell in in terms of the global picture, they “We expect to see a new wave of
2016, the value of Energy and Utilities are looking externally for inorganic transactions in 2017 as part of a trend
transactions saw a healthy increase to growth opportunities.” towards market rationalization. This will
pre-2007 levels, as the sector began to likely include a focus on infrastructure
The data seems to support this view.
regain confidence. Indeed, 2016 may and transportation-type assets, which
Deal values in the sector rose to
be seen as the turning point as total are seen as ‘safe havens’ at times of
US$753.4 billion, up from US$619.3
deal values hit their highest level for volatility,” says Berling.
billion in 2015 and led by several major
almost a decade. “Over the past 18
transactions out of the United States, This view is supported by data from
months, as oil prices have decreased,
which accounted for 5 of the top the M&A Predictor, which forecasts
the ability of companies to invest in
10 deals. forward P/E ratios, our measure of
M&A has been reduced,” says Henry
appetite, to increase by 16 percent
Berling, Managing Director and Head “The United States has several big
for corporates in the Energy sector
of US Energy Investment Banking for energy and power companies with
and 6 percent in the Utilities sector,
KPMG Corporate Finance, KPMG in large sums of capital that needed
up to December 2017. Energy
the United States. “This had a negative to find homes. The size of these
corporates’ capacity to transact, as
impact on earnings. Similarly, from a companies tends to mean that their
measured by net debt/EBITDA, is
power and utilities perspective, the M&A transactions tend to be big, too,”
predicted to improve by 23 percent
global slowdown in GDP growth has says Berling.
over the same period, while capacity
led to low load growth. This, coupled The renewables market also in the Utility sector is expected to
with a glut of gas in key markets like continues to be attractive, he adds, decline marginally.
the United States, kept power pricing with favorable tax legislation and
down, meaning earnings and top-line subsidies that are helping to drive the
growth were low.” development of renewables, relative
Berling notes that companies were to conventional energy. Wind and
largely in ‘survival mode’ in 2015, solar development, for example, has
looking internally to find savings and outpaced conventional assets.
drive earnings growth. “But now that
the worst seems to be behind us
10-year trend for Energy & Utilities (Volume and Value)
Value
Deals (USDbn)
5000 3,103 $960
2,602 3,820 2,464 $800

4000 3,545 3,483
3,279 3,176 3,139 3,159 2,534
$640
3000
$480
2000
$320
$892.3
$473.5
$585.5
$532.2
$634.3
$753.4
1000
$419.2
$619.3
$761.5
$597.7
$627.3
$160
0 $0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Top-10 Deals for Energy & Utilities Largest countries of origin by

Top-10 Deals for Energy & Utilities
Energy & Utilities
US — Energy Transfer Partners LP Largest countries of origin by Energy & Utilities
21 Nov
2016
US —
Sunoco Logistics
Partners LP
$51,455.7 USDm Canada $1,06,613.3
56
US — Spectra Energy Corp
China $27,790.0
6 Sep
2016
Canada — Enbridge Inc $42,962.1 USDm 66 91
US $19,664.8
US — Baker Hughes Inc Russian
$14,987.4
Federation
31 Oct
2016
US — General Electric Co $32,202.0 USDm 54
Qatar $11,649.2
US — Energy Future Holdings Corp
29 Jul
2016
US — NextEra Energy Inc $18,400.0 USDm
National Grid plc
UK —
(Gas distribution business)
Energy & Utilities
UK — Macquarie Infrastructure &
Real Assets Pty Ltd;
$14,523.6 USDm Largest destination countries by Energy & Utilities
CIC Capital Ltd; Value (USDm) # of deals
Allianz Capital Partners
US $1,02,289.7
GmbH;
BT Pension Scheme 33
Trustees Ltd; Brazil $22,378.7
Dalmore Capital Ltd;
Qatar Investment Russian 15
Authority; Federation $16,244.3 97
8 Dec International Public
2016
13
Partnerships Ltd" India $14,157.5
21
US — Columbia Pipeline Group Inc Australia $12,405.2
17 Mar
2016
Canada — TransCanada Corp $13,216.4 USDm
Essar Oil Ltd; Vadinar
India —
Oil Terminal Ltd - VOTL
Russian
$12,911.8 USDm Global M&A
Predictor for Energy for Energy
Federation — Rosneftegaz OAO;
Trafigura Beheer BV;
United Capital
15 Oct Partners Advisory Capacity
2016 OOO-UCP +23% [Net Debt/EBITA]
Australia — Ausgrid Pty Ltd (50.4%) Appetite

[Forward P/E ratio]
20 Oct
2016
Australia —
Westscheme Pty Ltd;
IFM Investors Pty Ltd
$12,413.9 USDm
+16%
US — Westar Energy Inc
31 May
2016
US — Great Plains Energy Inc $12,153.5 USDm
NorthStar Realty
US —
Finance Corp
3 Jun
2016
US —
NorthStar Asset
Management Group Inc
$12,030.6 USDm
Chemicals &
Basic Materials
Christian Specht
Deal Advisory
Partner, KPMG in
Germany
2016 was quite a notable year in the Another example of the 3 percent in appetite for transactions,
Chemicals and Basic Materials sectors, transformational deals driving M&A as indicated by forward P/E ratios.
with total deals reaching their highest activity is the pending US$3.2 billion However, the capacity of companies
value for 10 years. This included acquisition of surface treatment to transact, measured by net debt/
several blockbuster Chemicals deals provider Chemetall by BASF. EBITDA, is predicted to rise by
exceeding US$40 billion, the most 18 percent.
“These deals are signs of the ongoing
notable of which was the US$66.3
portfolio shift we are seeing in the
billion Bayer-Monsanto deal, following
market,” says Specht. Companies
on from 2015’s headline-grabbing Dow
previously were looking for the ‘perfect
and DuPont merger.
10,’ he adds. “Now, they are realizing
“The Bayer-Monsanto deal is a good that is unrealistic, so they are happy
example of the kind of transformational to go with an 80 or 90 percent fit
transactions we’ve seen in the instead. This is having an impact on
Chemicals sector recently. It shows overall levels of M&A activity, as those
there is a huge appetite for large acquisitions are then trimmed to better
transactions. Strong earnings over fit the portfolio and non-core activities
the last 3 years and favorable funding are sold off.”
means that a lot of companies have
The M&A prospects for the overall
large war chests to invest. And with
Basic Materials sector, which includes
debt funding still cheap, there is strong
Chemicals, is expected to remain at
appetite for M&A,” says Christian
a similar level next year. The M&A
Specht, partner at KPMG in Germany.
Predictor forecasts an increase of
10-year trend for Energy & Utilities (Volume and Value)
Value
Deals (USDbn)
6,000 5,688 $500
5,236 5,339
5,010 5,021
$400
4,500 3,834 4,056
4,003 3,741
4,537 3,508
$300
3,000
$200
1,500
$100
$345.8
$296.5
$332.1
$245.5
$258.1
$304.3
$150.6
$166.3
$467.6
$297.8
$387.0
0 $0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Top-10 Deals for Basic Materials Largest countries of origin by

Top-10 Deals for Basic Materials Basic Materials
Largest countries of origin by Basic Materials
US — Monsanto Co
23 May
2016
Germany — Bayer AG $66,340.6 USDm Germany $74,538.5
67 52
Switzerland — Syngenta AG China $60,614.5
03 Feb
2016
China — China National $46,940.5 USDm US $56,829.8
26 70
Chemical Corp - ChemChina
Germany — Linde AG Switzerland $5,844.8
148
20 Dec
2016
US — Praxair Inc $42,503.2 USDm Japan $5,140.4
Canada — Agrium Inc
12 Sep
Canada — Potash Corp of $18,333.4 USDm
2016
Saskatchewan Inc Largest destination countries by
US — Valspar Corp
Basic Materials
20 Mar
2016
US — Sherwin-Williams Co $11,277.8 USDm Largest destination countries by Basic Materials
US — Capsugel SA US $95,161.2
4
15 Dec Switzerland — Lonza Group AG $5,500.0 USDm Switzerland $47,027.6
34
2016
US — Air Products & Chemicals Inc Germany 51

$46,999.6
(Performance Materials Operations)
06 May 187
2016 Germany — Evonik Industries AG $3,800.0 USDm Brazil $6,641.6 9
Israel — Adama Agricultural Israel $5,181.8

Solutions Ltd
17 Jul
2016
China — Hubei Sanonda Co Ltd $3,706.8 USDm
US — Axiall Corp
29 Jan
US — Westlake Chemical Corp $3,521.9 USDm
Global M&A
Predictor for Basic Materials
for Basic Materials
2016
Russian — Polyus Gold OAO Capacity

Federation (31.747%) [Net Debt/EBITA]
11 Mar
2016
Russian
Federation
— Polyus Gold OAO $3,447.1 USDm
Appetite +18%
Target Name Bidder Ultimate Parent Name Pending Completed [Forward P/E ratio]
+3%
Technology, Media &
Telecoms
Philip Isom
Global Head of
M&A, Head of US
Corporate Finance
and Restructuring
KPMG in the US
The Technology, Media and Telecoms says Philip Isom, Global Head of M&A, This ties in with KPMG’s M&A
(TMT) sector posted strong M&A KPMG in the US. Predictor data, which also suggests
results in 2016, despite a lower a positive TMT deals market in 2017.
“The slowdown in deal volumes was
number of deals than the record Although forward P/E ratios, our
probably attributable to increased
2015 levels. measure of appetite, are predicted to
global uncertainty in the run up to the
remain largely unchanged in both the
Although the number of deals was US presidential elections, the potential
Technology sector (0 percent change)
closer to 2014 levels, deal values were impact of Brexit, volatile currency
and the Telecoms sector (1 percent
only marginally below 2015 figures, markets and other geopolitical factors,”
increase), the capacity to transact,
however, suggesting that bigger deals says Isom.
as measured by net debt/EBITDA, is
are driving the TMT M&A market.
Despite fewer deals overall, several expected to remain very strong, driven
The United States, in particular, saw a high-profile mega-deals helped by plummeting debt levels.
flurry of bigger-ticket deals, accounting deal value remain high. As well
for 80 percent of the top 10 biggest as the AT&T Time Warner mega-
deals by origin, led by the proposed deal, other landmark transactions
US$107.8 billion AT&T acquisition of include Qualcomm’s acquisition of
Time Warner. NXP Semiconductors for US$47
billion and the acquisition of Level 3
China was the second biggest
Communications by CenturyLink for
originator of deals, albeit with largely
US$33 billion.
lower value transactions.
With several blockbuster deals
“American and Chinese companies
announced during 2016, completed
have focused on cross-border deals
deal values at least look set to remain
to counter slowing growth at home
strong into 2017.
and, in the case of China, to acquire
technology and meet upgrading
demand of domestic consumers,”
10-year trend for TMT (Volume and Value) Value
Deals (USDbn)
15,000 $1200
12,648 11,653
12,000 11,079
$900
9,634 9,474 9,847 9,005
8,868 9,322 9,220
8,395
9,000
$600
6,000
$300
$1,168.6
$1,016.0
3,000
$884.5
$520.5
$494.3
$485.0
$649.0
$761.3
$927.9
$427.2
$487.7
0 $0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Top-10 Deals for TMT Largest countries of origin by TMT

Top-10 Deals for TMT Largest countries of origin by TMT
US — Time Warner Inc Value (USDm) # of deals
US $1,12,213.8
22 Oct
2016
US — AT&T Inc
$1,07,887.8 USDm 205
31
China $54,539.7
Netherlands — NXP Semiconductors NV
Japan $44,830.5 593
27 Oct
2016
US — Qualcomm Inc $46,990.1 USDm 204
UK $24,199.3
US — Level 3 Communications Inc 229
South Korea $10,107.8
31 Oct
2016
US — CenturyLink Inc $33,675.6 USDm
UK — ARM Holdings plc (98.5768%)
18 Jul Japan — SoftBank Group Corp $31,791.7 USDm Largest destination countries by TMT
2016
Largest destination countries by TMT
US — LinkedIn Corp
13 Jun
2016
US — Microsoft Corp
$28,119.9 USDm UK $85,697.0
80
US $83,465.0 90
UK — Sky plc (61.5969%) 303
50
09 Dec
2016
US — Twenty-First Century Fox Inc $23,149.2 USDm Netherlands $58,043.6
US — Linear Technology Corp India $10,250.6 511

26 Jul
2016
US — Analog Devices Inc $14,764.0 USDm China $10,188.5
US — IMS Health Holdings Inc
03 May
2016
US —
Quintiles Transnational
Holdings Inc
$14,725.4 USDm
US — NetSuite Inc
28 Jul US — Oracle Corp

$9,464.4 USDm
Global M&A Predictor for Technology
2016
Harman International
US —
Industries Inc Global M&A Predictor for Technology
14 Nov
2016
South
Korea
— Samsung Electronics Co Ltd $8,854.3 USDm
Capacity
Target Name Bidder Ultimate Parent Name Pending Completed +121% [Net Debt/EBITA]
Global M&A Predictor for

Global M&A Services
Telecommunication Predictor for Telecoms
Appetite
Capacity [Forward P/E ratio]
[Net Debt/EBITA]
+16.7%
Appetite +7%
[Forward P/E ratio]
+1%
In-depth
commentary
Our in-depth commentary goes beyond the global
sector review to provide insight into the larger trends
impacting some major sectors. A special report on
M&A Tax offers a global view from a tax perspective.
— Banking
— Insurance
— Consumer Markets
— Oil & Gas
— M&A Tax
Banking
Stuart Robertson
Global Financial
Services Deal
Advisory Lead,
KPMG in Switzerland
While the fundamentals in global Looking ahead with renewed are expected to follow similar trends,
banking and capital markets remained optimism, we expect a reasonably including setup of new exchange
relatively unchanged in 2016, the year healthy level of M&A in 2017, with and utilities companies. We also
did not prove to be a record breaker US political uncertainty subsiding expect to see divestments because
for deal activity as the operating following the election, and a possible of consolidation and the increased
environment became much tougher relaxing of regulation, plus expected scrutiny of competition authorities.
to navigate. Deal value and volume interest rate hikes, easing some of
Continued European banking
remained relatively stable compared to the pressure on local US banks. And
overcapacity makes further domestic
2015 but we had anticipated a higher despite the current growth focus on
consolidation there look inevitable.
level of deal activity for 2016. But in domestic markets, global and regional
In 2017, we continue to expect low
the end it was a year characterized by opportunities still exist for strong
growth and declining EU lending,
caution and uncertainty amid continued global banks. Banks will eye wealth
a turbulent political landscape
regulatory pressures plus an array of management businesses as margins
(Italian referendum, Dutch election,
significant geopolitical and economic tighten, while regulatory and capital
Brexit, French election), a continued
events: the US election, Brexit, China’s constraints will continue to factor
low-interest environment and the
economic slowdown and the continued highly in inorganic growth decisions.
‘uberisation’ of the banking sector.
low-interest rate environment.
Top trends that are likely to continue M&A deals among mid-tier EU banks
Domestic deals accounted for a 73 this year include the wholesale market are more likely than large-scale deals.
percent share of total deals, with infrastructure industry’s continued NPLs will be a top priority for the ECB
most of those announced in the US convergence of listing platforms/ as weaker banks prepare multi-year
and China. Deal activity overall was exchanges, data companies and post- strategic plans and look to deleverage
largely concentrated among small and trade services. Competition to acquire NPLs.
medium-sized banks, as continued data companies will drive up valuations
Meanwhile, large Japanese banks will
regulation and increasing capital of these companies, while competition
remain active in acquiring overseas
requirements inhibited acquisitions by authorities will continue to review
financial institutions and fintech-related
the large global banks. almost every transaction in wholesale
companies against the background of
market infrastructure.
Under a cloud of caution, the year slow economic growth and a shrinking
nevertheless did produce a few Look for the wave of consolidation population in the home market. Key
noteworthy mega-deals, among them: and M&A across wholesale market areas of focus are the US and ASEAN
the anticipated merger between the infrastructure dominating North countries. More regional consolidation
London Stock Exchange and Deutsche American and European markets until is also expected amid the push toward
Borse, the acquisition of regional Crédit now to push into Asia in 2017–18, digital banking, privatized Japan Post
Agricole banks by Sacam Mutualisation where the battle to be the ‘gateway’ Bank’s increased saving limit posing
and the merger between National Bank exchange for Asia will accelerate. competition to regional players, and
of Abu Dhabi and First Gulf Bank. Frontier markets, including Africa, negative or ultra-low interest rates.
South America and Eastern Europe,
Globally, fintech will remain front and including further consortia activity. in the banking sector in areas such
centre as a key growth driver this Financial institutions will continue to as loan portfolios, payments, leasing
year. We expect to see an increase in look for ways to embrace the promise and financing, brokerage services and
investment into enabling technology. of these innovations via different utilities. A wall of capital is poised
Key areas of focus are security, fraud avenues, including partnerships, direct and desperate to deploy, with private
prevention, regulation management, investment and M&A transactions. equity houses, pension and sovereign
compliance and risk management, data wealth funds, insurers and high-cash
Other key considerations that we see
analytics, customer personalization deposit holders looking for returns. The
impacting the growth playbook this
and blockchain. With strong interest most-active deal corridors will be from
year as new buyers enter the market
in emerging technologies like the US to ASPAC and to
include opportunities for non-FS
blockchain, we predict continued Western Europe.
buyers to make attractive investments
organic and inorganic investments,
Top 10 Trends
A wave of M&A emerging in the wholesale market

1 infrastructure industry, while the battle for Asia ‘gateway’
exchange will accelerate M&A.
US regional and local banks will bulk up, with continued

2 consolidation in 2017.
Continued European banking overcapacity makes further

3 domestic consolidation look inevitable.
Chinese banks will focus more on domestic M&A, eyeing

4 high-growth tech firms.
Large Japanese banks will remain acquisitive overseas,

5 while more regional consolidation is expected.
6 An active NPL market will fix weak balance sheets.
A wall of capital is desperate to deploy: Private equity

7 houses, pension and sovereign wealth funds, insurers
and high-cash deposit holders are looking for returns.
New buyers will be entering the market in 2017.
8 Fintech will remain front and center in 2017.
Banks will eye wealth management businesses as

9 margins tighten.
The most-active deal corridors: from the US to ASPAC

10 and to Western Europe.
The New Deal:
Driving insurance transformation with strategy-aligned M&A
Ram Menon
Global Insurance Deal
Advisory Lead, KPMG
in the US
Disruption is shaking the insurance strategic clarity regarding which Companies told us that transforming
industry to its very foundation and markets, geographies, products their business and operating models is
the changes underway are not and channels insurers choose to the number one motivator for deal-
cyclical in nature. New technologies, play in going forward, and which making: 33 percent of firms said they
competitors, markets and regulations processes, technology infrastructure, intend to undertake M&A to redefine
– plus changing consumer behaviors talent and culture will best support their business and operating model,
– are creating tremendous new transformation of the operating while 40 percent intend to enter
opportunities. model for future growth. To that end, partnerships and alliances.
innovative startups are increasingly
At the same time, however, these Asia-Pacific is expected to see the
seen as attractive targets, as
powerful dynamics are posing most partnerships and alliances forged,
evidenced by recent high multiples
significant risk to the legacy insurance with China and India ranking as the
and valuations of technology-enabled
business model, forcing organizations top two destinations in the region.
business models.
to reassess their portfolio of business The majority of the respondents also
and rationalize their global footprint As global insurance companies said they intend to forge strategic
to strategically determine ‘where to approach the new deal landscape in partnerships and alliances with larger
play’ and ‘how to win’ in the future. an industry under transformation filled firms, those with values ranging from
Firms will need to pursue a deeper with new opportunities, they will also US$250 million to US$1 billion.
understanding of how they want need to be wary of pitfalls and respond
The survey also noted that deal-
to serve their customers and what wisely. In this evolving market, insurers
making in the insurance industry could
propositions they want to offer. will need to be equipped with holistic
shift into high gear, with 84 percent
data and analytics-enabled deal-
An immediate consequence of this of firms indicating their intention to
evaluation capabilities, particularly
trend is an anticipated increase in deal undertake one to three acquisitions,
regarding due diligence, integration and
activity in the global insurance industry. and 94 percent planning at least one
separation activities, in order to extract
Industry players are now becoming divestiture.
maximum value from their proposed
more strategic about inorganic growth
acquisitions.
initiatives, with traditional reactive
No better time for an
approaches to M&A opportunities A recent survey we commissioned
M&A ‘playbook’
being viewed as insufficient in the conducted interviews with 200
drive toward investment that generates insurance M&A decision-makers
One of the first steps insurers may
transformation over the long term. across all segments and regions
want to consider is the development
and what we heard indicates that
of an enterprise-wide M&A
organizations are indeed now
A strategy-aligned approach ‘playbook’ to enhance and deepen
recognizing the need to strategically
is emerging their evaluation of the strategic-fit
reassess their business and operating
a potential acquisition target offers.
Taking a strategy-aligned M&A models and redefine their M&A
Creating a robust, strategy-aligned
approach will certainly enhance ambitions and appetite.
enterprise-wide ‘M&A playbook’ –
one that covers due diligence, deal ranged between US$10 million and economic growth and changing geo-
evaluation, and post-deal integration/ US$50 million. political risks across the mature and
separation processes – will improve emerging markets, insurers will look
Strategy-aligned M&A will certainly
deal outcomes over the long term. The beyond their domestic borders to buy
require a different mindset that
days of simply pursing any or all deal or sell assets abroad.
includes a renewed focus on
opportunities that present themselves
execution: 39 percent of firms said 2. Portfolio rationalization and strategic
are disappearing fast.
aligning their deal evaluation process repositioning of businesses by larger
Businesses also told us that to corporate strategy objectives is insurers is expected to drive global
partnerships are the clear choice for the key factor for M&A success. That M&A activity. Divestiture of non-core
transforming the business model: said, there is clearly more work to be business segments in strategically
87 percent of organizations expect done. Most organizations surveyed non-core geographies is expected
to partner for gaining access to admit that their corporate development to be a key driver for increased
new operating capabilities, and 76 and M&A teams’ objectives were not deal activity.
percent are looking to partnerships fully aligned to their overall corporate
3. Greater alignment of corporate
for gaining access to new technology strategy. Many respondents also
strategy and M&A objectives
infrastructure. To stay abreast of admitted that their M&A priorities
will provide an edge to buyers as
emerging trends in technological continue to be ‘reactive’ to market
competition for deals rises. Strategy-
innovation, several insurance opportunities, as opposed to targeting
aligned approach to M&A planning
companies have already established deals strategically aligned to overall
and execution will result in better
or are considering establishing in- corporate strategy.
deal outcomes over the long-term
house corporate venture capital
compared to a ‘reactive’ approach of
(CVC) investment capabilities, largely
Trends that will shape simply pursuing deal opportunities as
as a way to invest in innovative
2017 deal-making they arise.
technology capabilities.
4. The hunt for innovation will
Among firms with established CVC As insurers formulate their M&A
increasingly shape insurers’ rationale
models, the majority stated that their strategies for the year ahead, we
for doing deals. Companies with a
investment activities are focused on believe the following trends will shape
strong digital model and startups with
non-insurance technologies. While deal activity:
advanced technology will attract a
more than a quarter of insurers with 1. Cross-border activity will increase multitude of willing suitors as legacy
CVC models boast more than US$1 as insurers worldwide seek to diversify companies seek to transform their
billion in allocations, 90 percent say the their geographic risks and earnings business models through acquisitions.
median value of their CVC investments profits: With stagnation in global
Trends that will shape 2017 deal-making

As insurers formulate their M&A strategies for the year ahead, we believe the following trends will shape deal activity:
Cross-border activity will increase as insurers Greater alignment of corporate strategy and
1 worldwide seek to diversify their geographic risks 3 M&A objectives will provide an edge to buyers as
and earnings profits: With stagnation in global competition for deals rises. Strategy-aligned M&A
economic growth and changing geo-political risks planning will result in better deal outcomes over
across the mature and emerging markets, insurers the long-term compared to a ‘reactive’ approach of
will look beyond their domestic borders to buy or simply pursuing deal opportunities as they arise.
sell assets abroad.
The hunt for innovation will increasingly shape

2 Portfolio rationalization and strategic repositioning 4 insurers’ rationale for doing deals. Companies with
of businesses by larger insurers is expected to a strong digital model and startups with advanced
drive global M&A activity. Divestiture of non- technology will attract a multitude of willing suitors
core business segments in strategically non-core as legacy companies seek to transform their
geographies is expected to be a key driver for business models through acquisitions.
increased deal activity.
The road to strategy-aligned deal-making in 2017
The modern M&A landscape is filled with both opportunities and pitfalls for global insurance companies. To navigate this
landscape successfully, acquirers cannot divorce their M&A activities (both target identification and target evaluation) from their
broader strategy. They need to pay close attention to their strategic growth objectives, as it relates to transforming their business
and operating model, and recognize that not all potential acquisition targets are capable of helping fulfill them.
Key findings:
Deal-making shifts into high gear Strategy-aligned M&A requires a different mindset and
renewed execution focus
39% said that aligning the deal evaluation

94%
plan at least one
process to corporate strategy objectives
was the most important factor for
84%
plan to conduct
divestiture
M&A success
1-3 acquisitions
in 2017
Yet of the37%
respondents said their priority
is to be reactive to
market opportunities
Partnerships are the clear choice for transforming the A gap emerges in strategic alignment
operating model
87% said they will partner for new operating capabilities
47% with dedicated M&A
teams believe their deal
vs. identification objectives are
64% who said they would use M&A aligned to corporate strategy
76% will partner to gain access to new technology

Yet, 50% believe they are
less aligned when it comes
infrastructure to evaluating potential
risks associated with
vs. integrating/separating the
target’s operating model
29% who said they would use M&A
Better at home than abroad
Corporate venture capital (CVC) fuels the engine

92% ranked their
capabilities to execute
domestic transactions as high
62% of insurers are either active or setting

up a corporate venture capability
While 77% ranked their
cross-border acquisitions as
moderate to low
26% of those with VC activities have more

than US$1b in allocated funding
92% ranked their
cross-border divestitures as
Source: KPMG International, 2017 moderate to low
A strategy-aligned M&A focus will bring greater clarity on which
markets, geographies, products and channels insurers wish to Transforming business and operating models
‘play in’ or ‘exit out of’; and the relevant operating processes, #1 motivator for deals
technology infrastructure, talent and culture they will need in
33% 40%
order to win and transform their operating model.
Startups with powerful software tools and innovative

technologies are increasingly seen as attractive targets, as intend to intend to enter
evidenced by recent high multiples and valuations of such undertake M&A into partnerships
technology enabled platform based business models. In this to redefine their and alliances
market, insurers will need to be equipped with holistic data and business and
analytics-enabled deal evaluation capabilities. Particularly in the operating models
areas of due diligence, integration and separation activities to
fully understand how they can extract maximum value, and how
the target’s operating capabilities complement or supplement
their own.
As insurers formulate their M&A strategies for the year ahead,

we believe the following trends will shape deal activity:
— Cross-border activity will increase as insurers worldwide

seek to diversify their geographic risks and earnings
profile. With stagnation in global economic growth and
changing geo-political risks across the mature and emerging
markets, insurers will look beyond their domestic borders to
buy or sell assets abroad.
— Portfolio rationalization and strategic repositioning of

businesses by larger insurers is expected to drive global
M&A activity. Divestiture of non-core business segments
in strategically non-core geographies is expected to be a key
driver for increased deal activity.
— Greater alignment of corporate strategy and M&A

objectives will provide an edge to buyers as competition
for deals rises. Creating a robust, strategy-aligned M&A
plan of action would provide rationale for pursuing strategic-
fit targets with higher deal premiums. This will result in
better deal outcomes over the long-term, versus a reactive
approach to pursuing any or all deal opportunities that present
themselves.
— The hunt for innovation will increasingly shape insurers’

rationale for doing deals. Companies with a strong digital
model and startups with advanced technology will attract
a multitude of willing suitors as legacy companies seek to
transform their business models through acquisitions.
Survey methodology
In Q4 2016, KPMG commissioned a survey of 200 global
insurance executives to learn about their perspectives and
outlook for M&A, corporate strategy and innovation over the
coming 12 months. Survey respondents were divided regionally
among firms in the Americas (33%), Asia-Pacific (33%), and
Europe, Middle East + Africa (33%) and by segments: Life
(25%), Non-Life (25%), Reinsurance (25%), and Other (25%),
consisting of Insurance Brokers and Services. Companies
needed to have a minimum of US$1.5b in annual revenue to
qualify for participation.
Consumer Markets
Nicola Longfield
Global Consumer
Markets Deal
Advisory Lead,
KPMG in the UK
The consumer sector continues to convergence is ongoing as consumer Some market observers are predicting
be a dynamic and rapidly changing businesses are thinking more ‘an avalanche’ of M&A activity in the
area both for businesses and their holistically and looking to extend their consumer markets sector. There is
customers. Businesses are intensely offerings and services into new areas no doubt that among many consumer
focused today on identifying and such as nutrition, well-being and so on. businesses, M&A activity today is
responding to the evolving needs, almost replacing the need for an
From a technology perspective,
demands and preferences of innovation or R&D department and the
consumer businesses will remain
customers in the digital age. This complex, costly process of establishing
sharply focused on digital technology
includes exploring and developing new a new brand in a new market. M&A
to differentiate themselves in the
ways to connect and interact with to acquire brands and businesses at
evolving marketplace, whether that
consumers, as well as deciding where the local level is viewed as a faster,
means using today’s digital technology,
to invest on innovation that will drive more-efficient approach to evolving
tools and channels to better
future success in retaining current and growing the business and we can
communicate with customers, to
customers and attracting new ones as expect more organizations to pursue
improve overall service and satisfaction
the competition grows. this strategy amid changing markets.
and to enhance distribution methods.
A huge amount of convergence is
For major players operating large global
currently taking place across the
brands, the key challenges will include
consumer markets sector and this
how best to thoroughly identify,
trend is expected to continue. The
respond to and satisfy the needs of
major global players are certainly
local consumers. M&A strategies can
examining their product portfolios
help global businesses fill gaps at the
and considering how to expand their
local level through the acquisition of
offerings beyond pure consumer
smaller, fast-growing local brands
products. For example, significant
and businesses.
Oil & Gas
Mark Andrews
Partner, Head of
Oil & Gas, KPMG
in the UK
During 2016, deal activity in the that would otherwise have been on structures to satisfy the needs of both
oil and gas sector continued the the lookout for inorganic growth, buyers and sellers, whether those take
downward trend that began back in opted instead to focus on ensuring the the shape of price ratchet earn outs,
2011, with the number of announced/ sustainability of their own operations.” the swapping of assets or deals to put
completed deals dropping to the assets in the hands of owners who
Andrews also identified that there was
lowest point in a decade, due in large may be better-suited to operate them.”
a slight uptick in deals in at least one
part to the depressed oil prices. In
subsector in 2016 – oilfield services Overall, the sector will continue to
2016, exploration rates were down
– with an increasing number of offer plenty of M&A opportunities in
and many companies were finding it
companies completing mergers aimed 2017 and beyond, however it is unlikely
more challenging to access capital.
at unlocking synergistic benefits. that the exceptional level of deal
In addition, many of the sector’s big
activity seen in the first quarter will
players appeared to be focused on Looking ahead, Andrews comments
last, as much of the capital available
managing their own businesses rather “The first quarter of 2017 has been
may have been committed to the deals
than seeking out M&A opportunities. strong, with a number of substantial
already announced.
However, the sector is seeing a deals being announced in the sector.
marked improvement in 2017. This is due to a relative stabilization
of the oil price, compared to 2016,
“For 2017, we are expecting a more
creating a closer alignment of pricing
positive M&A environment in the
between buyers and sellers and more
oil-and-gas sector, following the low
financing made available to the sector.”
deal volume seen in 2016,” says Mark
Andrews, Partner and Head of Oil & “Over the next 12 months, we’re going
Gas with KPMG in the UK. “In 2016 to see the continued development of
we saw the low oil prices lead to the consolidation plays to gain efficiencies
creation of a valuation gap between and create logistical benefits,” says
would-be buyers and sellers. As a Andrews. “We also expect to see a
result of this gap, many of the players rise in the number of innovative deal
M&A Tax
Optimism for 2017 activity is tempered by concerns over the impact of
BEPS and increased deal scrutiny – a global view from a tax perspective
Arco Verhulst Devon Bodoh Angus Wilson

Global Head Global Head Asia Pacific
of Deal of Complex Leader for Deal
Advisory, M&A Transactions Advisory, M&A
Tax, KPMG Group, KPMG Tax, KPMG in
International International Australia
With macroeconomic indicators Profit Shifting (BEPS). Companies legislation along with greater
pointing in the right direction following with cross-border transactions and harmonization.
sustained global economic uncertainty, structures are facing a period of
It’s already evident that the
and initial fears over Brexit subsiding, uncertainty as governments must first
international campaign to combat tax
there’s optimism that global M&A determine how the guidance affects
base erosion and profit shifting (BEPS)
activity will continue trending upward current rules, then work to enact
— both as part of the OECD project
in 2017. domestic tax changes — a process
and through countries’ unilateral moves
that could take years. While these
At the same time, however, a cloud of — is altering the tax environment
developments unfold, some potential
uncertainty looms amid intensifying for cross-border M&A in significant
buyers may avoid transactions
scrutiny of M&A transactions from ways regarding country-by-country
involving sophisticated international tax
tax authorities, the potential for major reporting, focus on substance and
planning structures.
tax reforms globally, particularly in the interest deductibility:
US, and uncertain political agendas on In addition, the EU drafted the 2016
— Country-by-country reporting
the global front. To what extent such Anti-Tax Avoidance Directive (ATAD)
will make things more transparent
factors will have an impact on the for adoption and future implementation
for tax authorities in terms of how
M&A market – and when – is the big by EU member states. The ATAD
multinationals are operating and where
question for 2017. package of measures, which aims
revenue, profits and tax payments are
to ensure consistent and appropriate
Perhaps the biggest tax development coming from. And while the OECD
implementation of the OECD’s BEPS
affecting cross-border M&A globally has not proposed that the reports be
recommendations by EU member
involves the OECD’s action plan made available for public scrutiny, the
states, will result in more-stringent
to combat tax Base Erosion and EU is consulting on this possibility as
part of its tax transparency package. (FRR) to limit tax relief of net (including uncertainty over multiple factors,
As a result, buyers could gain access third-party) interest of 10-30 percent of including legislative and regulatory
to more-detailed information about net earnings before interest, dividends, changes, the introduction of BEPS-
potential targets for due diligence taxes and amortization (most countries related legislation, Brexit and the US
purposes, and sellers should be expect 20–30 percent), which will presidential election, momentum grew
mindful of the reputational implications affect international investors and by the end of 2016 and expectations
of this increased transparency. especially highly leveraged groups. are high for 2017.
— Focus on substance: One major While optimism prevails for the US

point of concern around BEPS is how market, however, uncertainty over
Business as usual in Europe
tax authorities are increasingly looking the changing legislative, regulatory,
– for now
for sufficient business substance economic and political environments
in offshore business structures, Meanwhile, BEPS-related concerns cannot be dismissed, particularly the
especially those involving low- or are considered critical for tax due OECD’s BEPS initiative.
no-tax jurisdictions, and they are diligence reviews. While companies
From a US perspective, while the
denying preferential rates for dividend will remain focused on discovering the
US Treasury and IRS are responsive
and interest withholdings where historical risk profile of any company
in issuing guidance, it is too early to
insufficient substance exists. When they are acquiring, changes regarding
speculate on the impact of the Trump
structuring an acquisition, substance in implementation of BEPS and increased
administration’s agenda and proposed
holding companies will require much transparency will make companies
changes. Tax reform could be enacted
more attention and, where an acquirer far more concerned about the future
in the US, although the extent of the
or acquired entity lacks sufficient sustainability of a target company’s tax
reform is still unclear.
substance in certain jurisdictions, profile. For example, if a target group
it may affect their ability to access has a relatively low effective tax rate, Currently, rules that were issued
treaty benefits. acquirers today will be particularly over the past year remain in effect,
concerned about how sustainable including rules regarding earnings
— Interest deductibility: ATAD’s
that lower tax rate will be and many stripping, inversions, cross-border
“interest deduction limitation” dictates
will conduct modelling around various partnership transfers between related
that, regardless of domestic interest
sustainability factors. Tax due diligence parties, and the transfer of intellectual
limitation in place among individual
in this regard will need to be much property from the US to a foreign
countries, minimum uniform measures
more forward-looking. jurisdiction. Undoubtedly, these
for EU states will be applied to
rules will need to be considered in
interest deduction and the limiting of Overall, however, even as the world
future transactions.
excessive interest deduction. This will around them is poised for change,
have an impact on M&A markets, in it is still “business as usual” for the In Latin America, we see a move
particular the net cost of funding for moment among companies and private towards greater transparency,
acquirers. The denial of deductions for equity funds in Europe. For as long substance, thin capitalization, and
interest has emerged as a common as legislation remains unchanged to other BEPS-influenced reforms. For
legislative means of eliminating the reflect BEPS, or the anti-tax avoidance example, Brazil and Argentina both
tax benefits of cross-border debt directive in the EU, companies will try employ a list of disfavored jurisdictions
financing structures. Germany and to benefit from existing legislation, subject to higher withholding tax rates.
Denmark were among the first while also carefully considering Mexico and Chile have introduced
countries to challenge tax deductions potential future ‘BEPS unwind costs.’ more stringent thin capitalization
for interest paid on loans taken up rules and reporting requirements for
by companies to finance their own transactions involving entities in their
acquisition. Countries such as Sweden Some uncertainty in the jurisdictions, with Chile also adopting a
are tightening rules for interest on Americas M&A market general anti-avoidance rule. Colombia
related-party debt. The UK and US are In the US, while the 2016 transactional recently passed a comprehensive
considering a proposed fixed-ratio rule market was affected by broad tax reform that includes increased
information exchanges, adoption of activity across the region, and PE and the need for post-deal documentation
country-by-country reporting, anti- Infrastructure on the increase. and restructures as a result. On a
avoidance rules and the reinforcement positive note, several tax treaties in the
From a tax perspective for the region,
of anti-tax haven legislation. region are undergoing renegotiation
the most notable changes are largely
and in some instances, new treaties
These legislative changes highlight a the continued evolution of domestic
are coming into existence.
rapidly changing regulatory landscape laws dealing with M&A in China and
in Latin America that demands India, plus the increased focus and Overall, it will indeed be interesting
increased attention when structuring resources of the Australian Tax office. to see how 2017 shapes up as
acquisitions in the region. Additionally, optimism and a ‘business as usual’
There is prevailing optimism overall
the region will not only be subject to outlook prevail globally, tempered by
that M&A deal volumes will continue
local political uncertainty, but also to a backdrop of uncertainty over the
to increase and that outlook seems
the potential impact of Brexit and any potential impact of developments on
well founded considering economic
changes in US legislation. However, the political, legislative, regulatory and
factors. The level of tax authority
certain trends, such as continued economic fronts.
activity and domestic and international
low commodity prices, currency
tax reform are more likely to influence
devaluations, a rising middle class, and
pricing and execution risk, as opposed
a need for infrastructure partners in
to deal flow. Certainly, BEPS-related
the wake of the Odebrecht corruption
concerns are significantly influencing
scandal shocking the region, may
deals taking place and the way they
encourage investment through M&A
are structured. Substance in holding
for 2017.
jurisdictions for CIVs is probably the
most significant influence of all the
BEPS reforms in the region.
Asia Pacific outlook remains
robust Tax due diligence will mean gaining an
understanding of the state of a target’s
In the Asia Pacific region meanwhile,
BEPS appropriateness. Quantifying
the M&A market continues to be
the precise dollar value of recent BEPS
robust in China (in- and out-bound),
reforms is difficult and there is much to
Japan, Singapore, Australia and
be done concerning due diligence and
India, with the tech sector sustaining
Contacts
Leif Zierz Philip Isom
Global Head of Deal Advisory Global Head of M&A, Deal
Partner, KPMG in Germany Advisory
T: +49 69 9587 1559 Partner, KPMG in the US
E: lzierz@kpmg.com T: +1 312 665 1911
E: pisom@kpmg.com
Contributors
Andrew Nicholson Danny Bosker Mark Andrews Ram Menon
Global Head of Healthcare M&A, Corporate Finance Partner, Partner, Head of Oil & Gas, Global Insurance Deal
KPMG in the UK KPMG in the Netherlands KPMG in the UK Advisory Lead, KPMG in
T: +44 20 76943782 T: +31206 567767 T: +44 20 76941029 the US
E: andrew.nicholson@kpmg.co.uk E: bosker.danny@kpmg.nl E: mark.andrews@kpmg.co.uk T: +1 212 954 3448
E: rammenon@kpmg.com
Angus Wilson Devon Bodoh Mark Flenner Silvano Lenoci

Asia Pacific Leader for Deal Global Head of Complex Co-head of Global Financial Corporate Finance
Advisory, M&A Tax, KPMG in Transactions Group, KPMG Services M&A, Partner,
Australia International KPMG in the UK KPMG in Italy
T: +61 2 9335 8288 T: +1 202 533 5681 T: +44 20 73114226 T: +3902676431
E: arwilson@kpmg.com.au E: dbodoh@kpmg.com E: mark.flenner@kpmg.co.uk E: slenoci@kpmg.it
Arco Verhulst Henry Berling Nicola Longfield Stuart Robertson

Global Head of Deal Advisory, Managing Director and Head of Global Consumer Markets Global Financial
M&A Tax, KPMG International US Energy Investment Banking Deal Advisory Lead, KPMG in Services Deal Advisory
T: +318890 92564 for KPMG Corporate Finance, the UK Lead, KPMG in
E: verhulst.arco@kpmg.com KPMG in the US T: +44 20 73114383 Switzerland
T: +1 804 780 1905 E: nicola.longfield@kpmg.co.uk T: +41 58 249 53 94
E: hberling@kpmg.com E: srobertson@kpmg.com
Christian Specht James Murray

Deal Advisory Partner, KPMG in Global Head of Consumer
Germany M&A,
T: +49 69 9587-2240 KPMG in the UK
E: cspecht@kpmg.com T: +44 20 76945290
E: james.murray@kpmg.co.uk
kpmg.com
kpmg.com/socialmedia
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we
endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue
to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the situation.
© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with
KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other
member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
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2017 M&A

Healthcare & Pharma 12

Energy & Utilities 18

Oil and Gas 34

After a record-breaking year for M&A

Geopolitical risks and a stricter

2 2017 M&A Predictor

The Predictor was established in 2007. It looks

All raw deal data is sourced from Dealogic, as

4 2017 M&A Predictor

Trend analysis Top 10 Announced Deals in 2016 (by Value)

NXP Semiconductors Qualcomm Inc $46,990

predicted capacity, at 22 percent. All other regions were

Top 10 Announced Cross-Border Deals in 2016 (by Value)

Monsanto Co United States Bayer AG Germany $66,340.6

Source: 2017 M&A Predictor, KPMG International

Cross-border deals Cross-sector deals

Globally, increased uncertainty around international

2017 M&A Predictor 7

8 2017 M&A Predictor

10 2017 M&A Predictor

Top-10 Deals for Financial Services Largest countries of origin by

5 Sep China — Jinan Diesel Engine Co Ltd $7,968.8 USDm

Norway — Lindorff Group AB

2017 M&A Predictor 11

12 2017 M&A Predictor

Top-10 Deals for Healthcare & Pharma Largest countries of origin by

IDC Salud Holding

Ultimate Target Name Ultimate Bidder Name Pending Completed

2017 M&A Predictor 13

14 2017 M&A Predictor

Top-10 Deals for Industrial Markets Largest countries of origin by

China — YTO Express Co Ltd

23 Mar $9,074.8 USDm

2017 M&A Predictor 15

16 2017 M&A Predictor

Top-10 Deals for Consumer Markets Largest countries of origin by

Yum China Holdings Inc Czech 138

Japan — Sharp Corp (66.06%)

Hilton Worldwide Holdings

Global M&A Predictor for Consumer Staple

18 2017 M&A Predictor

2,602 3,820 2,464 $800

Top-10 Deals for Energy & Utilities Largest countries of origin by

Australia — Ausgrid Pty Ltd (50.4%) Appetite

2017 M&A Predictor 19

20 2017 M&A Predictor

Top-10 Deals for Basic Materials Largest countries of origin by

Canada — Agrium Inc

US — Air Products & Chemicals Inc Germany 51

Israel — Adama Agricultural Israel $5,181.8

Russian — Polyus Gold OAO Capacity

2017 M&A Predictor 21

22 2017 M&A Predictor

Top-10 Deals for TMT Largest countries of origin by TMT

US — Linear Technology Corp India $10,250.6 511

US — IMS Health Holdings Inc

28 Jul US — Oracle Corp

Global M&A Predictor for

2017 M&A Predictor 23

24 2017 M&A Predictor

26 2017 M&A Predictor

A wave of M&A emerging in the wholesale market