At this year's European M&A Awards, we look back on the most influential deal in the in the M&A industry in the past year.
Deal of the year contenders
Merger of Luxottica and Essilor
From his viewpoint at the helm of Italy’s Luxottica, Leonardo del Vecchio set his sights on France-based Essilor to combine the world’s biggest eyewear maker and number one lens manufacturer. The deal is struck last Christmas and announced in January 2017. At €47 billion, Italy’s richest man orchestrated the biggest cross-border transaction in continental Europe. Regulators in five jurisdictions have taken a closer look at the deal, which looks set to capitalise on the 2.5 billion people worldwide needing glasses. The deal makes the shortlist due to its complexity in merger reviews and its strategic vertical integration of the eyewear market.
Buyout of Visma
In June 2017, five private equity houses split KKR’s majority stake in Visma for £4.1 billion, a 22x multiple. The Norwegian software group now enters the fourth round of private equity ownership. KKR generates 3.2x money, according to our analysis. The deal illustrates the growing trend for club deals in European large buyouts and is one of the largest Nordic deals this year.
Merger of Linde and Praxair
pFounded in 1879, German-headquartered Linde merges with US-based Praxair, in ongoing consolidation in the industrial gases sector. The new company seeks to dispel any Yankee-German culture clash with board seats, corporate offices and stock exchange listings shared between the US and Germany. Divestments are needed to please competition authorities, raising questions on how easy €1 billion in annual synergies will be. This deal makes the cut for overcoming complexity of German unions in the deal process as well as the inevitable follow-on M&A.
Acquisition of Actelion by Johnson & Johnson
J&J spent $30 billion of overseas cash reserves on Swiss-based Actelion in June, ending a quest for a transformative acquisition target. Demands from Actelion CEO Jean-Paul Clozel stall progress but advisors devise a complex spin-off of the R&D division that sees him retain a degree of control via a listing of the research labs division. As a result, J&J waives rights to early-stage medicines, something which had ruled other bidders out of the race. Despite this being J&J’s largest acquisition to date, the creative dealcraft and innovative structure which got the parties to agree a deal attracts attention.
Buyout of Stada
The protracted tussle for control of Stada saw Bain and Cinven beat first-movers Advent and Permira to secure the largest European buyout in four years. As minority shareholders tender at €66, activist hedge fund Elliott Management builds a 15% stake and sits in the driving seat. Innovative dealmaking secures private equity owners control (at a price) whilst bondholders resent weak protections in deal financing. Navigating incredibly complex shareholder issues, this deal highlights the trends of both shareholder activism and more creative private equity deal origination.
The Deal of The Year will be announced at Mergermarket's European M&A Awards on 7th December 2018.
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