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Megadeals Propel Offshore-Based M&A Value Surge - Appleby

Editorial Staff 8 March 2019

Megadeals Propel Offshore-Based M&A Value Surge - Appleby

The value of offshore M&A surged in 2018 while the actual number of deals declined slightly, according to data about these important liquidity events.

The total value of merger and acquisition deals handled via offshore jurisdictions surged by 47 per cent last year from a year before, with some mega-deals ($5 billion-plus) such as that involving the Takeda Pharmaceutical-Shire deal boosting the overall result, according to Appleby, the law firm.

While the total number of deals dipped when compared with 2017, value was up significantly, it said. 

“The total amount spent on offshore companies over the course of 2018 was $344 billion, over $100 billion more than 2017 and the second highest annual figure on record,” Cameron Adderley, partner and global head of corporate at Appleby, said. “The average deal size was $124 million, significantly higher than any other world region,” Adderley continued. 

With 2,781 transactions recorded, deal activity fell by 5 per cent compared with the previous year. However, the 57 deals that each exceeded $1 billion, including nine megadeals in excess of $5 billion, fuelled a significant rise in value. This includes the largest offshore deal of the year, Takeda Pharmaceutical’s $58.5 billion acquisition of Jersey-incorporated Shire.

The Cayman Islands led the way in total deal value in 2018, with three transactions featured in the offshore region’s 10 biggest deals. Cayman was also the busiest jurisdiction for offshore deals, recording 867. It was followed by Hong Kong (709 deals), the British Virgin Islands (504 deals) and Bermuda (307 deals).

Nearly all offshore territories reported declining levels of deal activity over the course of the year. However, in the face of geopolitical and regulatory headwinds, Hong Kong was the only jurisdiction to see an increase in activity, recording a 7 per cent rise in deals in 2018.

In total, 349 offshore companies spread over 60 different industries announced their intention to go to market. Despite stock market volatility which can sometimes lead to IPOs being cancelled, a record 196 offshore companies completed their listing in 2018, raising almost $33 billion, Appleby said.

Offshore IPOs typically occur on exchanges in the US, London or Hong Kong, with Hong Kong an especially popular choice among Cayman companies. Top sectors for announced offshore IPOs were information service activities and publishing activities.

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