Chambers Global Practice Guides: Corporate M&A 2017

Author:Mr George Brady
Profession:Matheson
 
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  1. Trends

    1.1 M&A Market

    M&A activity in Ireland in 2015 was at its strongest in terms of deal value since 2008, with pharmaceutical and biotech-led deals accounting for the vast majority of transactions. Whilst overall EU economic performance has remained sluggish, the Irish economy has undoubtedly turned a cor­ner. Ireland's early exit from the bailout in late 2013 instilled confidence internationally in relation to the country's future growth prospects, which has in turn driven growth in M&A activity.

    Deal values increased significantly in 2015, which saw a rise of 316% from EUR45 billion in 2014, to EUR189 billion in 2015. These figures include two mega-value transactions, namely Medtronic's EUR33.9 billion acquisition of Covi­dien, the largest European deal of 2014, and Pfizer's (unsuc­cessful) EUR172.6 billion bid for Allergan, announced in November 2015. Excluding these transactions, deal values increased by 41%, from EUR11.4 billion in 2014 to EUR16.1 billion in 2015. In contrast, deal volume decreased by 13% during the same period, from 120 deals in 2014 to 104 deals in 2015.

    Inbound M&A continued to be responsible for the highest value deals, with nine of the ten largest deals by value in 2015 involving non-Irish bidders. Ireland has become one of the most targeted countries by US companies, with 36 deals worth USD190.7 billion in 2015, representing an 8th consecutive annual increase in US investment in Ireland.

    Outbound activity also featured strongly, with outbound deals accounting for half of all M&A activity in 2015, com­prising a 42% increase from 2014.

    1.2 Key Trends

    The mid-market sector was particularly active in terms of domestic buyers, some of which were funded by private eq­uity rather than traditional bank finance. There was also an increase in alternative capital providers, primarily in the area of property financing. It is expected that mezzanine finance providers will also look to expand into other areas in 2016. Consistent with this trend is the fact that larger Irish compa­nies are increasingly turning to the bond market as a means of raising capital.

    Ireland continued to be one of the busiest loan sales markets in Europe in 2015, which was a key factor in driving M&A activity. Whilst there is likely to be a smaller number of loan portfolio sales during 2016, given that many of the key play­ers in the banking sector have largely completed their de­leveraging processes, it is also expected that 2016 will see an increase in the number of secondary loan sales.

    It is also expected that private equity firms and international funds invested in Irish assets will be active sellers in 2016, whilst continuing to target acquisitions.

    1.3 Key Industries

    The sectors which have traditionally seen strong levels of investment in Ireland, such as TMT (29% of deal volume in 2015), pharma, medical and biotech (12% of deal volume in 2015), agri-food and financial services, continue to see high levels of activity and are expected to do so in 2016. A signifi­cant strengthening of domestic-facing mid-market transac­tions is now beginning to be seen in sectors which have, up to now, lagged behind the Irish economic recovery, such as retail and leisure (13% of deal volume in 2015). There was also strong activity in the business services sector (13% of deal volume in 2015), including the USD18 billion "merger of equals" of Willis, the third-largest insurance broker in the world, and financial management services provider, Towers Watson.

  2. Overview of Regulatory Field

    2.1 Acquiring a Company

    The primary acquisition structures for private M&A in Ire­land are as follows:

    a private purchase of shares in a target company, which is typically...

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