One small detail in Shell’s £47bn takeover of BG Group to consider: Stamp Duty. HM Treasury can look forward to a £235m windfall once the deal concludes.
Corporate buyers used to avoid the 0.5 per cent tax by using schemes of arrangement, where shares in the target company would be cancelled, followed by the issue of new shares by the bidder. However a change to company law last month closed the loophole.
The measure was announced in December’s Autumn Statement, but hasn’t attracted much attention since, possibly because it was only forecast to bring in about £65m per year. Read more
From Dealogic for your historical comparatating pleasure, the top ten largest mergers and acquisitions of all time (in nominal dollar value).
Shell’s cash and share offer for BG is the second biggest oil and gas deal so far, at $82bn, just behind of the 1998 takeover of Mobil corp by Exxon, worth $86bn.
Meanwhile, in the all-time deal value league, Shell BG places ninth. Tabulation below the fold. Read more
Can it be a merger Monday if the big deal leaked on Friday?
Either way, the second quarter deal making was already off to a fast start before the cement makers got involved, according to Goldman Sachs, and Europe is finally starting to join in the fun.
A week into 2Q, M&A announcements continued at a brisk pace (+21%y/y) while completions also saw gradual improvement (+7% y/y). While the year to date strength in M&A has been primarily driven by the US (+21% y/y), we have seen notable improvement in selected pockets of EU deal flow. Specifically, EU buyers’ appetite have seen sizable growth (+38% y/y), though more in favor of cross-border purchases (2x vs. 2013TD) relative to domestic consolidation (+27% y/y).
As Liberum Capital see it, everything is in place for private equity to flourish — except for the small matter of deals.
Companies have lots of cash, debt is cheap, the market for secondary deals between private equity groups is healthy, and the number of buyout-backed initial public offerings is well on track to beat last year.
Fundraising also pulled in $204bn globally in the first half of this year, versus $170bn in the same period in both 2011 and 2012.
But there is a note of caution… Read more
Societe Generale are trying to tell us something about M&A here. We’re not sure what.
Dealmaking slumped in the past three months as companies took fright from renewed concerns about the future of the eurozone and the outlook for the global economy. The FT reports that global merger and acquisition volumes fell 17.5 per cent in the second quarter compared with the first three months of 2011, according to data from Mergermarket. Some $516.1bn worth of deals was announced in the second quarter with Johnson & Johnson’s $21.2bn offer to acquire Swiss-based Synthes being the largest for the period. Most regions including the US and Asia saw a fall in volumes, but Europe, which had previously lagged behind the pace of recovery elsewhere, saw gains. Deals there rose 19.9 per cent from the first quarter to $209bn.
Deals and capital raisings in China’s booming financial services sector have outpaced those in the US for the first time since records began in 1995, fuelled by a wave of refinancings by Chinese banks needing to repair their balance sheets, the FT reports. There have been $36.2bn-worth of deals in China’s financial sector so far this year, compared with $26.2bn in the same sector in the US, according to data from Dealogic. Bankers said the increase in deal flow was being driven by large refinancings by Chinese banks as they move to shore up their capital this year, rather than full takeovers.