5 April 2006 | by: HARGREAVES David
A BOOM in takeover activity that has seen about $6 billion of deals announced in the past three months could be sustained "over years", investment banker Rob Cameron believes.
Mr Cameron, of independent investment bank Cameron Partners, said that increasing globalisation, the effects of "the IT revolution", the closer business links between New Zealand and Australia, and the worldwide impact of private equity would sustain the boom longer than previous waves of activity.
A global survey by Thomson Financial shows that for the first quarter of this year US$3.8 billion merger and acquisition deals were announced involving New Zealand targets, a 187.5 per cent increase on the same quarter last year. There were 83 deals announced in the latest quarter compared with 64 a year ago.
The Origin Energy-Contact Energy merger was the biggest deal signalled in the period, valued at US$1.3 billion, followed by the Transpacific-Waste Management merger at US$579.3 million.
Australian entities accounted for three-quarters of all the deals by value.
The energy and power sector, led by the Origin-Contact deal, was the most active sector, with deals worth US$2 billion.
Deutsche Bank was the top adviser in terms of announced deals, helping with US$1.4 billion of deals. Cameron Partners placed second through its work on the Origin-Contact deal.
But in terms of completed deals during the quarter, Cameron Partners finished top, having worked on projects such as advising the consortium that bought NZ$435 million of Carter Holt Harvey forests and advising independent directors of Carter Holt during the takeover offer from Rank Group.
Mr Cameron said the growth of private equity funds was a key driver of merger and acquisition activity.
"What they have done is put together, on a very large scale, capital and capability -- and that is not going to stop. There will always be opportunities."
Merger mania continued apace worldwide in the first quarter. The Thomson Financial figures show that globally, deals worth US$880.8 billion were announced.
The world's top financial adviser during the period was Citigroup, which advised on 80 transactions worth more than US$340 billion.
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