Recorded M&A deals worth almost $6bn in 2018

Law firm Appleby has published the latest edition of Offshore-I, which provides data and insight on M&A activity in the major offshore financial centres.

This edition focused on transactions announced over 2018, which saw value up, although the total number of deals dipped when compared to 2017.

The total value of offshore M&A deals rose by 47% in 2018 when compared to the previous year – driven in part by a surge in megadeals each valued at $5bn or more.

‘The offshore region recorded a total cumulative deal value of $344bn over the course of 2018, over $100bn more than 2017 and the second highest annual figure on record,’ said Wendy Benjamin, Group Partner at Appleby (Guernsey) LLP.

‘The year saw the Crown Dependencies of Guernsey, Isle of Man and Jersey continue with their preference for domestic M&A, interspersed with high-profile and high-value international deals. Guernsey, specifically, recorded more than 100 deals worth a total of nearly $6bn.’

Acquisitions have become increasingly popular over the last two years, compared to taking a minority stake in a company or releasing more shares to investors, and now make up nearly half of all offshore M&A activity.

‘Investing companies are no longer content to just take a seat on the board, but want full control of an asset in order to gain a competitive advantage over rivals,’ said Cameron Adderley, partner and global head of corporate at Appleby.

‘This drive to do strategic deals is likely to continue, providing finance remains readily available, interest rate rises predictable, and markets stable. Gaining access to transformational technologies also remains a big incentive across almost every sector.’

With 2,781 transactions recorded, the offshore region experienced a five per cent drop in deal activity in 2018 when compared to the previous year. However, the 57 deals that each exceeded $1bn, including nine megadeals in excess of $5bn, fuelled a significant rise in value. This included the largest offshore deal of the year, Takeda Pharmaceutical’s $58.5bn acquisition of Jersey-incorporated Shire PLC.

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 with 709, the British Virgin Islands with 504 and Bermuda with 307 deals.

In 2018, Appleby Guernsey acted for long-term client Praxis IFM Group in its acquisition of 100% of the issued share capital of Nerine International Holdings Limited, a Bahamian registered company, and its various overseas subsidiaries.