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Bermuda M&A deal value doubles for half-year

The total value of merger and acquisition transactions in Bermuda more than doubled to nearly $34 billion in the first half of 2018, driven by two major re/insurance takeovers.

Bermuda was home to three of the ten biggest offshore deals in the first six months, according to the Offshore-i report by offshore law firm Appleby.

The report found that the volume of offshore deals has fallen back from levels seen in the latter half of 2017, but value is on the rise.

Total deal value of $33.86 billion in the first six months of the year represented a 111 per cent increase over the last half-year period.

The three largest deals in Bermuda were the $15.3 billion acquisition of XL Group by Axa, the $5.56 billion buyout of Validus Holdings by American International Group and the $2.35 billion acquisition of a 64 per cent stake in Joy City Property by COFCO Property (Group) Co.

Among offshore jurisdictions, Cayman remained home to the largest number of deals, while Jersey was home to the largest deal value due to the $62 billion acquisition of Jersey-incorporated Shire Plc by Japan's Takeda Pharmaceutical.

In total, there were 1,344 offshore deals recorded in the first half of 2018, representing a 10 per cent decrease when compared to the last six months of 2017. The total deal value of $216 billion marked a 68 per cent increase over the second half of 2017.

The report also highlighted outbound M&A activity, that is when the acquirer is based offshore. One of the top ten deals was the purchase of Patrón Spirits International AG, maker of the popular Patrón tequila, by global spirits giant Bacardi, which is headquartered in Bermuda.

“Bermuda remains a popular choice for offshore deal-making as evidenced by the increase in total deal value and the size of deals involving Bermuda-incorporated companies,” said Timothy Faries, Bermuda managing partner and group head of corporate in Bermuda.

“With a focus on increasing transparency and fostering the burgeoning financial technology sector, Bermuda will continue to be at the heart of significant global transactions.”

The most frequent types of deals were acquisitions, capital increases and minority stakes in other companies, Appleby reported. Typically, these three categories have been fairly balanced but the last 18 months have seen acquisitions move notably ahead to where they now make up 40 per cent of all deals.

“Increasingly, firms are choosing to top up an existing stake and secure control of an investment outright,” said Cameron Adderley, partner and global head of corporate at Appleby. “This makes sense with the increasing competition for quality targets, a low-risk environment and easy access to finance.”

Shake on it: Bermuda recorded $33.9 billion of merger and acquisition deals in the first half of 2018

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Published September 20, 2018 at 2:42 pm (Updated September 21, 2018 at 1:04 am)

Bermuda M&A deal value doubles for half-year

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