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Descriptions of business activity throughout global markets in 2015 have been, by and large, a decidedly mixed bag, ranging from a belief that markets were in recession to being broadly steady. However practitioners may view last year’s activity, it would seem that a more accurate estimation lies somewhere between the two characterisations. Words such as uncertain, modest, slowed and unpredictable being have been used to indicate how the market performed over the past 12 months. But curiously, this rather subdued assessment of 2015 coincided with a high number of mega deals, which have been a consistent source of headlines in recent times.

UNITED STATES

David Yates

Hunton & Williams LLP

“In general, the middle market M&A sector, which is our natural play yard, was not as busy in 2015 as one might be led to think from reading the megadeal headlines. This is perhaps due to the perceived overvaluation of assets in the low interest rate environment that has pervaded for years. We think that with private equity dry powder continuing to be at an all-time high, plenty of available financing options, and the continuing drop of commodities prices, 2016 could be a strong year for mid-market M&A – and we have already seen some of that in the beginning of this year.”

BRAZIL

Thiago Sandim

Demarest Advogados

“Due to a series of both political and economic circumstances, the Brazilian economy has slowed down over the past year. This has directly affected certain sectors, most notably industry and commerce. Also, combined with the deepening economic woes in China, the downturn of commodity prices, and as result of several domestic corruption scandals, some of the main corporations in Brazil have taken a big hit, making the whole economy suffer. However, the services sector continues to grow. Also, with the Brazilian government paying high interest rates and with a devalued currency, there are great opportunities for foreign investors, who have been using both the institutional crisis engulfing the country, as well as the crisis of confidence hitting the nation, to raise their portfolios in Brazil and make great deals.”

UNITED KINGDOM

Chris Hale

Travers Smith LLP

“2015 was a year of slowing growth in the UK. Recently revised numbers published by the Office for National Statistics came out at 2.2 percent for the year, down from 2.9 percent in 2014. Despite this less robust picture, 2015 was a good year for private equity related M&A. According to the Centre for Management Buyout Research, private equity-backed buyouts had a value in 2015 of £19.5bn, the best year since 2010. It was a spectacular year for buyout exit values, reaching a record £47.6bn. Some of the largest exits, such as that of Worldpay, were by way of IPO.”

SWITZERLAND

Daniel Hayek

Prager Dreifuss

 “We saw only a modest pace of growth in 2015. In January 2015, the Swiss National Bank (SNB) announced that it would no longer hold the Swiss franc at a fixed exchange rate to the euro. Consequently, the Swiss franc soared and the Swiss stock market fell. The Swiss economy is yet to recover from the unpegging of the Swiss franc, but given the difficult currency environment, the Swiss economy has coped well with the challenges last year.”

ROMANIA

Florian Nitu

Popovici Nitu Stoica & Asociatii

 “The last 12 months offered great opportunities, but also a good number of failures, so I would say the outcome was mixed. We have seen new investments and equity funds and major industrialists showing an increasing interest in Romanian businesses and opportunities, with PE funds and banks raising significant amounts and committing to big tickets. At the same time, there were many infrastructure and concession projects suspended or even cancelled for various reasons, many foreign to business rationale. Also, changes to the regulatory framework across many sectors have occurred concomitantly, leading in the short term to a sort of administrative deadlock, but the prospects that this situation will improve soon are good.”

RUSSIA

Natalya Morozova

Vinson & Elkins LLP

“During the last 12 months the Russian economy has been in recession, experiencing a GDP reduction of 3.7 percent in 2015. Russia is the world’s second-largest producer of oil & gas, according to the BP Statistical Review of World Energy 2015, and the country’s economy is heavily reliant on revenues derived from its oil & gas exports. Naturally, it has been negatively affected by the dramatic drop in the price of oil in 2015 and the further decline in oil prices seen in the beginning of 2016. According to the Bank of Russia, hard currency export revenues reduced by one third in 2015. According to the report of the Federal Customs Service, in 2015, receipts from exports of crude oil and oil products dropped by approximately 42 percent, although the volume of exports of crude oil increased by 9.4 percent and of oil products by 4 percent. The total trading balance in 2015 decreased by 33.2 percent, though still a positive balance.”

JAPAN

Adrian Joyce

Norton Rose Fulbright

“Perhaps unsurprisingly, in the offshore oil & gas, shipping and commodities sectors, the last 12 months have been characterised by increasing uncertainty over the direction of those markets. However, such uncertainty has brought countercyclical opportunities for buyers of oil & gas, maritime and project assets and we’ve seen a steady growth of opportunistic acquisitions, litigation and restructuring work for Japanese and non-Japanese clients.”

THAILAND

Surasak Vajasit

Rajah & Tann (Thailand) Limited

“Much of the activity has been driven by businesses looking at opportunities within ASEAN, particularly given the establishment of the ASEAN Economic Community at the end of 2015. One area that has been particularly interesting is the appetite for e-commerce and technology driven businesses, with multinational players looking for successful home-grown businesses to acquire. Another interesting area has been the level of outbound Thai and also other South East Asian investment in the region. Apart from acquisition activity, businesses are also seeking to better understand their compliance requirements across the ASEAN region.”

AUSTRALIA

Brent Goldman

Nexia Australia

“Business activity has been mixed. There has been an increase in activity but a good description of sentiment is ‘still fragile’. In the mid-market, for deals under $200m, the number of M&A transactions fell 20 percent in 2015 but IPOs were up 8 percent based on funds raised. In particular, the end of the mining boom and the need for Australia to refocus its economy away from the mining sector is still working its way through business activity. This had led to some positive changes, with more activity in service sectors.”

UNITED ARAB EMIRATES

Andrew Greaves

Addleshaw Goddard (Middle East) LLP

“Business activity in the Gulf region was broadly steady across most sectors over the last 12 months, however market confidence, and by extension the regional economies of the Middle East, were affected towards the back end of the year as the impact of the steep decline in the price of oil and geopolitical issues filtered through.”

CONTRIBUTORS

Addleshaw Goddard (Middle East) LLP

Demarest Advogados

Hunton & Williams LLP

Nexia Australia

Norton Rose Fulbright

Popovici Nitu Stoica & Asociatii

Prager Dreifuss

Rajah & Tann (Thailand) Limited

Travers Smith LLP

Vinson & Elkins LLP