Value Of M&A Deals Via Offshore Centres Boomed In 2015; Caymans, Hong Kong Shine

Tom Burroughes Group Editor 4 March 2016

Value Of M&A Deals Via Offshore Centres Boomed In 2015; Caymans, Hong Kong Shine

The death of offshore has been greatly exaggerated, as Mark Twain might have said after new statistics come out.

The total cumulative value of offshore merger and acquisition deals in 2015 surged by 56 per cent from a year before, with average deal value topping highs not seen since 2007, bucking the notion that such jurisdictions are under pressure from onshore rivals.

According to a report released today by law firm Appleby, there were 2,969 deals last year, almost the same number as in 2014, but with a sharply higher value, of $442 billion.

“Early on we predicted that 2015 would likely be a stand-out year, and the end result fulfils that prediction,” said Cameron Adderley, partner and global head of corporate at Appleby.

There were 75 deals each worth more than $1 billion across the year, higher than the 52 recorded in 2014. When looking at the full year, the annual average deal size closed at $149 million, far ahead of the previous record, which was set in 2007 when the annual average deal size stood at $99 million.

The top 10 biggest deals of 2015 were collectively worth $163 billion.

“The offshore markets are thriving and enjoying some of the best deal activity ever witnessed,” said Frances Woo, managing partner of Appleby’s Hong Kong office.

“Offshore saw more value than the Middle East, Africa, Eastern Europe, South and Central America combined. Although 2016 remains fraught with uncertainty and challenges at the macroeconomic level could slow global deal activity, we are quietly optimistic that such good news will continue in 2016,” Woo said.

For the past four years, the Cayman Islands have ranked as the most popular destination for investors seeking to acquire offshore assets. The report found that in 2015 Cayman attracted nearly 1,000 deals worth a cumulative $125 billion, representing a third of the deal volume for the entire offshore region, and over a quarter of deal value.

Hong Kong, meanwhile, led the way in deal value, recording 519 deals worth a total 163 billion. The recent Nanyang Bank $43.5 billion acquisition contributed to the performance.

When looking at the origin of offshore investment, statistics show that the main onshore investors in offshore targets are China, the UK and the US, responsible for 209, 116 and 107 deals respectively in 2015.

Insurance and financial services continued to dominate in 2015, accounting for 883 deals or 30 per cent of the total.


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