Activity slows on the takeovers front

By ELLEN READ

The corporates went relatively quiet last year as the value of announced deals fell 24 per cent to $14.29 billion.

Volumes also shrank, with 245 deals compared with 281 the previous year - a 12.81 per cent fall, says research group Thomson Financial.

The numbers relate to deals which were announced during the year but not necessarily completed, such as Edison Mission Energy's planned takeover of Contact Energy.

Showing no ill effect from the September 11 terrorist attacks, six of the year's Top 10 announced transactions took place in the last quarter.

The 10 - the list headed by APN News & Media's $1.51 billion acquisition of Wilson & Horton - comprised 73.3 per cent of the total transactions.

Others on the list were:

* Edison Mission Energy's $1.34 billion bid for Contact Energy.

* The $1.24 billion spinoff of Fletcher Building.

* Data Advantage's $1.13 billion buy of Baycorp Holdings.

* Allied Domecq's long $1.13 billion battle for Montana.

* The split of Fisher & Paykel into separate appliances and healthcare companies, valued at $1.07 billion and $952 million respectively.

* The Government's $885 million bailout of Air New Zealand.

* Australian Gas Light's $764 million pitch for TrustPower.

* TelstraSaturn's bid for Clear Communications valued at $435 million.

Macquarie New Zealand was the leading financial adviser for announced transactions by value, advising on seven with a combined value of $4.76 billion. The firm advised on the year's biggest deal, involving Wilson & Horton.

Second was Credit Suisse First Boston, advising on nine deals worth $3.43 billion.

UBS Warburg was third, advising on five deals with a total value of $2.94 billion.

Ranked by number of deals, KMPG Corporate Finance retained its top position, advising on 25 deals. JBWere and PricewaterhouseCoopers tied for second with 11 transactions each.

Last year recorded the lowest rate for foreign investors involved in announced merger and acquisition deals since 1998. Around 55 per cent of announced deals - valued at $7.8 billion - involved foreign investors, a 33 per cent drop from the previous year in dollar value.

By volume, just 37 per cent of 91 announced transactions included foreign investments - a 7 per cent fall from the previous year.

The electric, gas and water distribution sector was the leading industry for announced merger and acquisition (M&A) activity followed by food-related products, then miscellaneous retail.

Despite reduced value and volume, when compared with worldwide figures, New Zealand's investment bankers did not fare too badly.

Thomson Financial says announced world M&A dollar volume fell nearly 50 per cent to $US1.74 trillion ($4.06 trillion) from $US3.46 trillion in 2000.

The number of world deals fell by nearly 10,000, or more than 26 per cent. Just 28,828 deals were announced, compared with more than 38,200 in 2000.

Last year, New Zealand jumped one place higher to 29th position on the basis of announced deal value worldwide.

Completed transactions - some of which might have been announced before last year - reached a value of $18.57 billion from just $10.80 billion in 2000.

This was a 72 per cent rise in value, although volumes fell slightly to 195 last year from 206 in 2000.

The completed transactions category was dominated by Credit Suisse First Boston.

It advised on 11 deals with a total value of about $9.42 billion - accounting for 50.6 per cent of the market.

Credit Suisse advised Fletcher Challenge on its company restructuring.

Second was Deutsche Bank, which advised on 11 transactions with a total value of $6.35 billion.

Morgan Stanley was third, accumulating a total value of $4.36 billion in two transactions.

KPMG secured top position by volume, advising on 27 deals representing 13.9 per cent of the market.