2023 Global M&A Transactions: Cautious Optimism Amid Challenging Outlook

2023 Global M&A Transactions

Despite the uncertain geopolitical landscape, inflationary pressure and rising interest rates we are cautiously optimistic for the varied opportunities the next 12 months will bring.

Our trends to monitor, compiled from data modelling by our research team and insights from global partners, include a strong year ahead for energy and infrastructure; hotspots of activity in the Middle East and Japan; renewed interest in digital assets; and further efforts by private equity funds to create value through complexity.

Key highlights:

  • USD3.7tn total financial sponsor dry powder at the end of November 2022, a new high. With syndicated leveraged debt hard to access, 2023 will see sponsors create value through more complex transactions such as carveouts or aggressively going after two or more complementary assets at the same time
  • +28% rise in Japanese M&A in H2 2022, one of the few markets globally to see an uptick. We expect robust activity in 2023 as Japanese corporates embrace sales and Japan’s central bank battles to control inflation
  • Crypto assets in North America are one-to-watch – crypto-related M&A volumes remained strong in 2022 and despite the FTX collapse we expect trading platforms to be among the most active buyers in coming months. We’re also seeing strong interest from consumer businesses looking to copy the success of brands such as Nike
  • USD192.4bn – total energy and power M&A in H2 to the end of November, making it the biggest sector by value. We expect a strong year in 2023 amid the ongoing energy crisis and drive to decarbonise production
  • The success of energy producers has a regional dimension, too, with the Middle East one of the most buoyant markets for both M&A and IPO activity in 2022. In the period to mid-November, private equity funds invested more than USD14bn in a record 64 buyouts in the region. We expect this trend to continue as, for example, gigaprojects in Saudi Arabia create significant opportunities for overseas investors

View the full report.

LEADERS IN LAW WISHES YOU A HAPPY NEW YEAR 2023

Hogan Lovells Advises Internet Mobile Communications Limited on $450 million de-SPAC Business Combination with Crystal Peak Acquisition

Amsterdam, London, 28 December 2022 – Global law firm Hogan Lovells is advising Internet Mobile Communications Limited (“IMC”) (which trades as Bank of Telecom), in its business combination with Crystal Peak Acquisition (“Crystal Peak”), a special purpose acquisition company (SPAC) listed on Euronext Amsterdam (the “Business Combination”). The Business Combination was formally announced on 23 December 2022 and is expected to complete no later than June 2023, subject to approval from Crystal Peak shareholders and certain other customary closing conditions.

Daniel Simons and Danielle du Bois-Buné, lead Hogan Lovells partners for the transaction, said:  “It’s been a real pleasure to work with the excellent IMC team on this deal and to assist them in the process of becoming a listed company. The transaction further underlines Hogan Lovells’s expertise in executing high-level and complex cross-border transactions across multiple markets.”

IMC, incorporated in 2012, is headquartered in Chelmsford, United Kingdom with offices in Armenia, Chile, Guatemala, India and Jordan. Their Bank of Telecom platform offers secure, automated trading of wholesale SMS and voice with same day settlements, all of which help overcome significant industry challenges and increase operational efficiency and performance.

Crystal Peak Acquisition, listed on Euronext Amsterdam, is a Special Purpose Acquisition Company (SPAC) incorporated in the Cayman Islands for the purpose of acquiring a business with principal operations in Europe and the wider Europe, Middle East and Africa (EMEA) region.

Upon completion of the Business Combination, the combined listed entity will be renamed IMC.

IMC believes that the Business Combination will provide for a strong complementary partnership that will accelerate future value creation. IMC furthermore believes that partnering with Crystal Peak offers it the best opportunity to unlock value and that Crystal Peak’s team is the right team to partner with to deliver on that opportunity. IMC have clearly identified business areas where the Crystal Peak team can provide support, including: (i) the evaluation and execution of value-accretive acquisitions; (ii) the development of further cross-industry strategic partnerships; and (iii) the evaluation and execution of new platform products and services such as global numbering directory, data centres, IP transit and IP addresses.

The Hogan Lovells team was led by Corporate partners Daniel Simons (London) and Danielle du Bois-Buné (Amsterdam), with support from a cross-border, cross-practice team. Key support was provided by Charles Jemmett (senior associate, London), Marieke Plaisier (associate, Amsterdam), Blaise Salle (associate, London), Akhil Parekh (associate, London), and Rory Hazelton (trainee solicitor, London).

Employee Share Incentives was led by Fiona Bantock with support from Callum Fowers. Tax was led by Karen Hughes with support from Adam Parry.

Clifford Chance Advises Pro Bono on the World’s First Orange Bond by Impact Investment Exchange

Leading international law firm Clifford Chance has advised Australia and New Zealand Banking Group, Standard Chartered Bank and Barclays pro bono as Placement Agents on the fifth issuance of Impact Investment Exchange (IIX)’s US$50 million bond offering under its Women’s Livelihood Bond™ (WLB) Series. Closing of WLB5 marks the world’s first sustainable debt security in the market issued in compliance with the Orange Bond Principles™ and the first multi-continent bond in the Series.

Orange Bonds – which draws its name from the orange hue of United Nations’ Sustainable Development Goal (UN SDG) 5: Gender Equality – is a new class of sustainable financial instruments that aims to eliminate gender bias, improve women’s equality and living standards by mobilising new sources of capital for women’s empowerment and building a gender-empowered financing system. The latest offering by IIX’s WLB Series, which has mobilised US$128 million to date, will look to create livelihood and empower about 300,000 women across Asia and Africa.

Partner Gareth Deiner and counsel Ying Chiang Chong led the deal, with support from associates Michelle Lee, Didi Hu and trainee associates Joel Sherard and Daniel Ng.

Tokyo Co-Managing Partner Leng-Fong Lai, senior consultant James Booth and senior associate Jason Hitch acted on behalf of the trustee, the Bank of New York Mellon.

Gareth commented, “We are proud to bring our leading global capital markets expertise to advise on the world’s first Orange Bond, which represents a strategic inflection of the global sustainable financing market to adopt new and unique ways of blending ‘orange’ and ‘green’ themes towards accelerating the global ESG agenda.”

The proceeds of the WLB5 will be used to make loans to high-impact enterprises in Cambodia, India, Indonesia, Kenya, and the Philippines that operate across six sectors: microfinance, SME lending, clean energy, sustainable agriculture, water and sanitation, and affordable housing. The WLB5 also complies with the ICMA Sustainability Bond Guidelines, the ASEAN Social Bond Standards, and the UN SDG Impact Standards.

Leng-Fong added, “WLB5 continues to push the boundaries of financial markets and sets the standard for future Orange Bond transactions to come. Clifford Chance previously provided pro bono advice on IIX’s Women’s Livelihood Bonds™ 3 (WLB3) issued in 2020, and we are proud to be at the forefront of advising on novel, market-first transactions that reflect our commitment towards social responsibility.”

Gareth DeinerYing Chiang ChongMichelle LeeDidi HuLeng-Fong LaiJames BoothJason Hitch

SingaporeTokyoHong Kong

Linklaters Enhances Regional Dispute Resolution Practice with Zhao Sheng Law Firm Hire of Ellen Zhang

Linklaters’ China joint operation partner, Zhao Sheng Law Firm, today announced the hire of Ellen Zhang who joined as a partner in the firm’s Dispute Resolution practice, based in Beijing on 26 December 2022.

Ellen joins Zhao Sheng from Fangda Partners where she was a counsel in the dispute resolution practice, prior to which she worked at Kobre & Kim in New York.

Ellen is a PRC and New York law-qualified lawyer with extensive experience advising both Chinese and international corporations on complex commercial and financial disputes, cross-border investigations and regulatory compliance.

Linklaters’ Partner and Asia Head of Dispute Resolution Jelita Pandjaitan, commented:

“Ellen is a fantastic addition to our Asia dispute resolution team and expands our coverage of the important China market. Her extensive experience in advising both PRC and multinational corporate and financial institutions on their most complex cross-border, commercial disputes will benefit our clients in China and far beyond. Ellen is well-placed to guide clients in litigation, arbitration and investigations of all kinds in support of their strategic objectives.”

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Delivering excellent client service and using our global capabilities to help them pursue the right opportunities means they benefit from long and lasting relationships.

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Eversheds Sutherland Advises on Complex Insurance Business Transfer

Eversheds Sutherland has advised China Taiping Insurance (UK) Co Ltd (CTI), a subsidiary of the Fortune Global 500 China Taiping Insurance Group, on a complex insurance business transfer scheme which utilised a saving provision introduced by the UK Government prior to Brexit.

The transfer comprised the assignment of China Taiping’s EU insurance business to a leading international insurance and reinsurance group, DARAG.

This provision allows so-called Part VII transfers that were begun prior to Brexit to be completed, subject to all elements of the transfer being concluded before the end of December 2022.

The Eversheds Sutherland team was led by insurance Partners Martin Mankabady and Adriana Cotter and comprised Partner Paula Gaddum (Insurance & Reinsurance) and Senior Associates Henry Dean (Financial Services) and Edward Moss (Insurance).

High Court approval for the business transfer was obtained on 28 November 2022, and took into account a number of factors including the impact of inflation and the war in Ukraine.

Martin Mankabady, Partner, Eversheds Sutherland, commented:

“We were delighted to support our long-standing and important client, China Taiping, on this transfer, which involved utilising a new and temporary legislative provision and represented unchartered territory. Considering the current economic and geo-political environment, we are proud to have delivered a deal which helps our client to focus on and invest in its UK activities whilst safeguarding the interests of policyholders.”

Adriana Cotter, Partner, Eversheds Sutherland, commented:

“We are thrilled to have delivered this highly strategic transition for China Taiping, one that will reinforce its foundations to support its ongoing growth and progress within its key markets.”

Weimin Zheng, Deputy General Manager, China Taiping, said:

“Eversheds Sutherland brought much welcomed clarity to an extremely complex process. The technical excellence they displayed, particularly in relation to the regulatory and transactional elements of the deal, was evident throughout. The team was diligent and professional in its approach and drew on deep sector knowledge and experience that was second to none.”

 

Global Awards 2022 is now LIVE!

Congratulations to all winners on an excellent year!

The Leaders in Law – 2022 Global Awards commemorates those who have been successful over the past 12 months & have shown excellence not only in their expertise but in service.

You can view the 2022 Winners in the Publication below. Congratulations again to all Winners on a superb 2022!

View the 2022 Global Awards: Award Winners 2022 – Leaders in Law (leaders-in-law.com)

 

DLA Piper Grows Litigation and Regulatory Practice with New Partner Hire in Ireland

DLA Piper today announces the appointment of Gavin Woods as a partner in the firm’s Litigation and Regulatory practice in Ireland.

Gavin will join the firm in January 2023 from Arthur Cox where he has been a partner since 2011. Gavin specialises in litigation, dispute resolution, and investigations and advises on a broad range of commercial disputes in the technology and financial services sectors. Gavin has a recognised expertise in intellectual property, data, technology and content related issues including defamation and reputational matters. Gavin has significant experience in representing clients before the Irish Courts including the Commercial Court as well as through alternate dispute resolution such as arbitration and mediation.

Gavin is active in promoting Ireland as a jurisdiction for the resolution of international commercial disputes. As a committee member and former president of Arbitration Ireland (2017-2018), Gavin represents the association in its engagement with the international arbitration community and international arbitral institutions. Furthermore, Gavin is one of Ireland’s representatives to the International Chamber of Commerce’s Commission on Arbitration and ADR.

Country Managing Partner for DLA Piper in Ireland, David Carthy, said: “Gavin’s extensive knowledge of complex litigation, dispute resolution and investigations will be brought to bear for DLA Piper clients, and I would like to welcome him to the team. This continues to be an exciting time for the firm in Ireland as we continue to build our team to meet the growing needs of the business and we know that the appointment of Gavin will add significant value to our clients.”

Partner and Head of Litigation and Regulatory for DLA Piper in Ireland, Caoimhe Clarkin, said: “We are delighted to announce Gavin’s appointment as partner in our Litigation and Regulatory practice. Gavin is an experienced litigator and a brilliant lawyer. Gavin’s experience working with clients on reputation and other critical risk management issues including data privacy, defamation, brand protection, and internet-related disputes aligns with, and will further support, the needs of our growing client base. The continued growth of DLA Piper is extremely exciting, and Gavin is joining a busy team working on a broad range of high-profile international litigation and regulatory matters across all sectors.”

DLA Piper confirmed recently that it had delivered on its initial recruitment objective of building a team of 100 lawyers and business professionals in Ireland and announced plans to double its workforce in Ireland in the coming years.

Pinsent Masons – Global Infrastructure Survey Seeks Views on Decarbonisation Agenda

Organisations operating in the infrastructure sector around the world have been asked to share their views on the opportunities and challenges associated with transitioning to and operating in the ‘green’ economy.

Contractors, suppliers, and infrastructure asset owners and operators are among the organisations encouraged to participate in the Pinsent Masons 2023 global infrastructure survey, along with governments, consultants, lenders, investors and technology providers.The survey asks participants about the opportunities and challenges for their organisation associated with the green transition and the global green economy.

Opportunities listed include growing revenues and profits, accessing new clients and markets, attracting talent and investors, and raising profile and brand reputation. Challenges listed include internal appetite to embrace the global green economy, accessing capital to support investment, supply chain readiness, litigation and data and intellectual property (IP) risks.

Participants are also asked to rate their organisation’s readiness and maturity to take advantage of the green transition and global green economy now and how they see that evolving over the next three years. Another question asks for views on what will help stimulate demand and growth for new green products and services.

The survey also seeks to capture organisations’ maturity in relation to climate-related reporting requirements under the framework developed by the Taskforce for Climate-related Financial Disclosures (TCFD), as well as attitudes towards the role of industrialised construction in supporting the green transition and global green economy.

Other questions in the survey encourage participants to think about how they expect the green transition and global green economy to affect the availability of people and resources, impact on the type of partnerships and joint ventures their organisation will enter into, on areas of investment, and whether the green transition will effectively reverse globalisation of supply chains.

EU member states have reached a deal on the world’s first carbon border tax aimed at supporting the EU transition to net zero by 2050 and applies to iron, steel, cement, aluminium, fertilisers, hydrogen and electricity generation. A trial period starts in October 2023 and includes many of the most commonly used construction materials and is set to bring about a rethink of construction and manufacturing supply chains, which typically include China and the US as well as other countries.

The survey comes at a time when policymakers and regulators around the world are imposing increasing regulation on businesses of all kinds aimed at implementing international commitments around addressing the climate crisis.

Graham Robinson of Pinsent Masons said: “The economic effects of inaction to climate change far outweigh the costs of mitigation. This can be seen from climate related weather events across all parts of the globe totalled $2.5 trillion in the decade from 2011 to 2020 and have grown significantly as reported by the World Economic Forum citing data from the AON Weather, Climate and Catastrophe Insight: 2020 Annual Report.”

“The infrastructure and built environment sectors are responsible for around 40% of all global greenhouse gas emissions and therefore the global green economy represents one the greatest opportunities to propel growth in the construction of new green infrastructure and adaptation of existing infrastructure,” he said.

“The size of this opportunity is attractive to other sectors such as the global tech and advanced industrialised sectors and will lead to very significant opportunities for construction to form strategic partnerships and joint ventures with other industries and sectors,” Robinson said.

Infrastructure expert Ian Laing of Pinsent Masons said: “The challenges include a rethink of the entire construction value-chain as the Covid pandemic has already forced organisations across the infrastructure sector to look at the resilience of supply chains. The green transition, including the new EU carbon border tax, will only accelerate this rethink as globalisation potentially grinds to a halt for construction and could go into reverse.”

The survey closes on 31 January 2023. Pinsent Masons will collate, anonymise and analyse the results from the survey and share them in a report and at a series of global infrastructure law review of the year events early next year.

Hogan Lovells Advises Banks on the Establishment of a Commercial Paper Programme of Jungheinrich AG

Led by Partner Dr. Jochen Seitz the Frankfurt capital markets team of the international law firm Hogan Lovells advised Commerzbank Aktiengesellschaft (arranger), Bayerische Landesbank, DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main and BNP Paribas on the establishment of a 300 million euro Commercial Paper Programme of Jungheinrich AG (Jungheinrich). Commerzbank Aktiengesellschaft is also acting as paying agent.

Commercial papers constitute money market instruments with a maturity of up to 364 days that are tradeable as bearer bonds. The programme has a STEP label (Short-Term European Paper), which is relevant for the ECB eligibility of the securities issued. STEP is an initiative of the European Money Markets Institute (EMMI) that sets market standards and has established STEP as a seal of quality.

As one of the world’s leading providers for intralogistics solutions, Jungheinrich has been advancing the development of innovative and sustainable products and solutions for material flows. As a pioneer in the sector, the Hamburg-based family business is committed to creating the warehouse of the future.

With the establishment of its first Commercial Paper Programme, Jungheinrich expanded the group’s options for raising funds via the capital market independently of banks and successfully broadened its financial scope of action. The issuance of commercial paper serves Jungheinrich as an additional option to its existing short-term financing instruments. For further information, please see the Jungheinrich press release.

Hogan Lovells for the banks:

Dr. Jochen Seitz (Partner), Dr. Stefan Schrewe (Senior Associate), Kira Kuhnert (Foreign Associate) (all Capital Markets).

Commerzbank Inhouse Team:

Heike Hauser, Dr. Mauricio Hartwig-Jakob

Jungheinrich Inhouse Team:

Dr. Martin Riedl (Legal), Grit Herling, Lars Kopper (Treasury)