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Offshore M And A Market Remains Healthy

by Amanda Banks, Tax-News.com, London

15 November 2012


The offshore mergers and acquisitions market has shown a healthy 11% year-on-year growth in the cumulative value of transactions in Q3 2012 according to a recent report.

Although volumes in the same period show a 16% year on year decline, average deal values in Q3 which stood at USD78m are strong compared to 2011 levels.

The report by offshore legal, fiduciary and administration services provider Appleby is quietly upbeat about future growth prospects while acknowledging the uncertain macroeconomic situation. As Appleby Group Chairman Peter Bubenzer noted: “The uncertainty in the eurozone, which we hoped might reach some kind of resolution back in Q1, remains far from entering an end game, while the close race for the White House will, we suspect, have a profound effect on US transactions through to year end.”

Some of the key themes for Q3 2012 are:

  • A 10% drop in the volume and a 17% drop in the value of transactions between Q2 and Q3 is typical of third quarter activity and compares favourably with a more significant drop between Q2 and Q3 last year.
  • The average deal value this quarter ranks fourth of the last ten quarters, suggesting a degree of robustness returning to the market.
  • Hong Kong’s 15% increase in volume and 72% increase in deal value between Q2 and Q3 is the story of the quarter. The Cayman Islands continues to hold top spot both in terms of volume and deal value with 86 deals worth a combined value of USD9.1bn.
  • The financial services sector accounted for 139 of the 428 deals worth a combined value of USD4.2bn and continued to dominate. This was followed by telecommunications, computer manufacturing and electronic and optical products.
  • The offshore M&A market, worth USD33.5bn, was one of the few world markets to have experienced value growth in the quarter and ranks fifth in value terms, comfortably ahead of the Middles East, Oceania, the Nordic States, Scandinavia and Eastern Europe.

TAGS: investment | business | mergers and acquisitions (M&A) | Cayman Islands | offshore | Hong Kong | business investment

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