Japan M&A Trend Report: Q1-Q3 2013

Overview Japans Q3 M&A value (US$ 13.3bn) was set for a 10-year low until US-based Applied Materials acquired Tokyo Electron limited for US$ 8.7bn in the final week of the quarter. The largest USJapan transaction on Mergermarket record (since 2001) made up almost a quarter (24.0%) of Q1-Q3 2013 values (US$ 36.4bn). The Tokyo Electron deal added 65.7% towards Japanese M&A in Q3 but it did not manage to prevent a quarterly decline following a solid Q2 (US$ 15.1bn) leaving Q3s US$ 13.3bn down 12%. Q3 also decreased compared to Q3 2012 (US$ 13.9bn), down 4.5%. The late turn around in Q3 could be a sign of better things to come in 2013 but for now, Q1-Q3 deal value totalled US$ 36.4bn, down 33.9% compared to Q1- Q3 2012 (US$ 55bn). This marked a third year of declines for Japanese M&A during the Q1-Q3 period. Real Estate targeted M&A increased by value through Q1- Q3 2013, up 83% to US$ 4.6bn from US$ 2.5bn in Q1- Q3 2012. A boost in Real Estate investment signals that uplift in inbound investment could be around the corner followed by private equity investment up to two years later, according to Mergermarket intelligence. The US$ 8.7bn Tokyo Electron deal, the highest valued US acquisitions of a Japanese company, gave a boost to the Technology sector. Deal value was up 97.4% in value to US$ 11.5bn from US$ 5.8bn in Q1-Q3 2012. According to Mergermarket intelligence, a solid deal pipeline indicates that further growth in Japans Technology, Media and Transport sectors is very likely Outbound M&A activity continued on an upward trajectory in Q3, registering a second consecutive quarterly increase at US$ 21.1bn, up 191.5% compared to Q2 2013 (US$ 7.2bn) the highest quarterly increase in three years (Q2 to Q3 2010 increased 199.8% from US$ 3.6bn to US$ 10.7bn)
Value of Deals ($bn)
40
Value No. of Deals

M&A Trend: Japan

160

35

140

30

120

20

80

15

60

10

40

20

0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2007 2008 2009 2010 2011 2012 2013

Morgan Stanley beat Nomura Holdings and topped Mergermarkets Financial Advisor League Table by value with 30 deals worth US$ 31.4bn

Nishimura & Asahi topped the Legal Advisor League Table by value and deal count with 50 deals worth US$ 34bn and advised on three of the top five transactions

Industry Analysis
Q1-Q3 2013 Sector
Technology Real Estate Consumer Industrials & Chemicals Energy, Mining & Utilities Construction Pharma, Medical & Biotech Business Services Leisure Financial Services Media Transport Agriculture Total

Q1-Q3 2012 Deal count

35 15 52 67 4 13 16 45 19 19 10 10 2 307

Change Deal count

29 11 58 72 3 11 20 37 22 17 10 3 1 294

Value ($m)
11,491.7 4,615.3 4,463.6 3,950.9 3,458.0 3,059.1 1,674.2 1,321.0 1,082.8 967.3 271.6 50.7 5.1 36,411.4

Mrk share
31.6% 12.7% 12.3% 10.9% 9.5% 8.4% 4.6% 3.6% 3.0% 2.7% 0.7% 0.1% 0.0%

Value ($m)
5,821.3 2,521.8 6,672.7 12,400.0 17,678.0 1,129.5 378.8 2,265.6 1,315.6 3,237.7 1,615.6 5.4 55,042.1

Mrk share
10.6% 4.6% 12.1% 22.5% 32.1% 2.1% 0.7% 4.1% 2.4% 5.9% 2.9% 0.0% -

Value (%)
97.4% 83.0% -33.1% -68.1% -80.4% 170.8% 339.4% -41.7% -17.7% -70.1% -83.2% 843.3% -33.9%

Deal count
6 4 -6 -5 1 2 -5 8 -3 2 7 1 12

Cross-Border Analysis
60
Inbound Value
Outbound Value

Deal Size Analysis

80

Inbound Volume

70

50

Outbound Volume

2011

10,073

6,017

18,656

7,792

40,168

60 40

Value of Deals ($bn)

50

Number of deals

2012

9,788

8,108

20,294

20,529

12,600

30

40

30 20 20
10
Q1-Q3 2013

8,693

5,973 7,635 5,380 8,730

10

0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2007 2008 2009 2010 2011 2012 2013

10,000

20,000

30,000

40,000 50,000 Value of Deals ($m)

60,000

70,000

80,000

90,000

0m - 250m

251m - 500m

501m - 2,000m

2,001m - 5,000m

> 5,001m

Number of deals

25

100

Japan M&A Trend Report: Q1-Q3 2013

Top Deals
Bidder Advisors FA: Goldman Sachs LA: De Brauw Blackstone Westbroek; Mori Hamada & Matsumoto; Weil Gotshal & Manges; Advising FA: Simpson Thacher & Bartlett 2-Jul-13 Mitsubishi UFJ Financial Group Inc Bank of Ayudhya Public Company Limited (75% Stake) GE Capital Corporation FA: Bank of America Merrill Lynch; Phatra Securities LA: Allen & Overy; Nishimura & Asahi; Sullivan & Cromwell Target/Seller Advisors FA: Morgan Stanley LA: Jones Day; Nishimura & Asahi; Advising FA: Latham & Watkins Deal Value ($m) 8,730

Ann. Date

Bidder Company

Target Company Tokyo Electron Limited

Seller Company

24-Sep-13 Applied Materials Inc

FA: Deutsche Bank; Morgan Stanley LA: Baker & McKenzie; King & Wood Mallesons; Thanathip & Partners FA: Acxit Capital Management; Goldman Sachs; Morgan Stanley; Credit Suisse LA: Clifford Chance; Weil Gotshal & Manges FA: GCA Savvian Group; Morgan Stanley; Nomura Holdings LA: Herbert Smith Freehills; Hogan Lovells; Mori Hamada & Matsumoto; Nishimura & Asahi; Noerr FA: Leonardo & Co; Barclays; JPMorgan; Rabobank LA: Anderson Mori & Tomotsune; Davis Polk & Wardwell; De Brauw Blackstone Westbroek; Allen & Overy

5,731

26-Sep-13 Development Bank of Japan Grohe AG Inc; and LIXIL Group (87.5% Stake) Corporation

TPG Capital LP; and DLJ Merchant Banking Partners

FA: BNP Paribas; Moelis & Company; Sumitomo Mitsui Financial Group

3,558

LA: Linklaters; Mori Hamada & Matsumoto 11-Jun-13 Hitachi Ltd/Mitsubishi Heavy Mitsubishi Heavy Industries Industries Ltd (Joint Ltd (Thermal Power Venture) Generation Systems Business); and Hitachi Ltd (Thermal Power Generation Systems Business) Hitachi Ltd; and Mitsubishi Heavy Industries Ltd FA: -

3,308

LA: -

19-Feb-13 ORIX Corporation

Robeco Groep NV (90% Stake)

Rabobank NV

FA: Goldman Sachs; Houlihan Lokey; Morgan Stanley

2,590

LA: Linklaters; Nishimura & Asahi; Advisnig FA: Simpson Thacher & Bartlett

Financial Advisor League Table by Value Q1-Q3 2013

Rank Q1-Q3 2012 2013 2 5 7 1 10 18 4 9 11 21 68 86 57 74 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15= 15= 15= Deal % Value change count 30 15 23 44 8 6 2 8 25 27 4 6 7 6 5 5 5 -17.9% -19.2% -7.1% -75.4% 0.7% 100.8% -75.6% -38.3% -17.4% 52.9% 7406.2% 53488.9% 3068.9% 8928.3%

Financial Advisor League Table by Deal Count Q1-Q3 2013

Rank Q1-Q3 2012 2013 1 2 3 5 4 10 6 7 8 9 18 11 87 14 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Deal Count change count 44 43 30 27 25 23 20 17 15 13 8 8 7 6 6 -26 3 -5 1 -3 9 -5 -5 -1 3 -2 6 -1 2

House Morgan Stanley Goldman Sachs Sumitomo Mitsui Financial Group Nomura Holdings Bank of America Merrill Lynch Deutsche Bank Phatra Securities JPMorgan Daiwa Securities Group GCA Savvian Group BNP Paribas Plutus Consulting Yamada FAS Partners AGS Consulting Benedi Consulting Tokai Tokyo Financial Holdings

Value ($m) 31,422 19,656 15,293 12,213 10,179 8,257 7,572 7,258 6,908 5,597 5,269 4,879 4,823 4,785 4,785 4,785 4,785

House Nomura Holdings Mizuho Financial Group Morgan Stanley GCA Savvian Group Daiwa Securities Group Sumitomo Mitsui Financial Group Deloitte KPMG Goldman Sachs PwC Bank of America Merrill Lynch JPMorgan Yamada FAS Deutsche Bank Plutus Consulting

Value ($m) 12,213 3,883 31,422 5,597 6,908 15,293 1,856 1,587 19656 1,398 10,179 7,258 4,823 8,257 4,879

Legal Advisor League Table by Value Q1-Q3 2013

Rank Q1-Q3 2012 2013 3 2 18 108 85 88 13 17 40 12 1 5 15 72 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Deal % Value change count 50 46 8 5 4 10 6 9 6 21 41 8 3 5 24 28.7% -36.5% 142.24% 7086.1% 3001.7% 2797.7% 12.8% 51.1% 436.2% -16.1% -85.6% -63.7% -15.7% 594.8% -78.2%

Legal Advisor League Table by Deal Count Q1-Q3 2013

Rank Q1-Q3 2012 2013 2 1 3 5 4 6 22 38 20 11 16 31 13 14 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Deal Count change count 50 46 41 24 21 16 11 10 10 10 9 8 8 8 7 8 -16 3 8 4 2 6 7 5 1 2 5 -3

House Nishimura & Asahi Mori Hamada & Matsumoto Simpson Thacher & Bartlett Weil Gotshal & Manges De Brauw Blackstone Westbroek Allen & Overy Jones Day Linklaters Latham & Watkins Baker & McKenzie Nagashima Ohno & Tsunematsu Clifford Chance Sullivan & Cromwell Herbert Smith Freehills Anderson Mori & Tomotsune

Value ($m) 34,039 23,504 15,382 13,941 12,717 11,127 9,869 9,719 9,517 7,612 6,763 6,194 6,124 5,079 4,068

House Nishimura & Asahi Mori Hamada & Matsumoto Nagashima Ohno & Tsunematsu Anderson Mori & Tomotsune Baker & McKenzie TMI Associates Oh-Ebashi LPC & Partners Allen & Overy Skadden Arps Slate Meagher & Flom Freshfields Bruckhaus Deringer Linklaters Simpson Thacher & Bartlett Clifford Chance Shearman & Sterling Morrison & Foerster

Value ($m) 34,039 23,504 6,763 4,068 7,612 1,565 1,268 11,127 2,501 2,132 9,719 15,382 6,194 1,685 1,645

Japan M&A Trend Report: Q1-Q3 2013

Notes All data is based on announced transactions over US$ 5m. Deals with undisclosed deal values are included where the targets t urnover exceeds US$ 10m. Deals where the stake acquired is less than 10% will only be included if their value is greater than US$ 100m. Activities excluded include property transactions and restructurings where the ultimate shareholders interests are not changed. All data excludes minori ty stake deals (10% 30%) where the dominant target geography is Asia-Pacific and the deal value is less than US$ 100m Criteria http://www.mergermarket.com/pdf/deal_criteria.pdf All data correct as of 04 October 2013 Press Contact: Jessica Chan Jessica.Chan@mergermarket.com Tel: +852 2158 9706 Deal Submissions: Fidelia Liu Fidelia.Liu@mergermarket.com Tel: +852 2158 9723 Sales: Sales.Asia@mergermarket.com Tel: +852 2158 9764 M&A Trend: Based on the dominant geography of the target company being Japan. Excludes lapsed and withdrawn bids Cross-border M&A: Inbound refers to cross-border M&A where the dominant geography of the target company is Japan. Outbound refers to cross-border M&A where the dominant geography of the bidder company is Japan. Excludes lapsed and withdrawn bids Top Announced Deals: Based on the dominant geography of the target, bidder or seller company being Japan. Excludes lapsed and withdrawn bids. FA refers to Financial Advisor and LA refers to Legal Advisor Industry Analysis: Based on the dominant geography of the target company being JAPAN. Industry sectors represent the primary industry sector of the target company only. Excludes lapsed and withdrawn bids League Tables: Based on the dominant geography of the target, bidder or seller company being Japan. The Financial Advisor tables exclude lapsed and withdrawn bids, and the legal advisor tables include lapsed and withdrawn bids All values are in US$