1 | M&A NEWS J u n e 2 0 21
12 Seven things Bill Gates
predicted back in 1999. In
2015 he predicted a
Pandemic outbreak, too.
20 Biontech founder Uğur
Şahin. At least nine new
vaccine billionaires have
been created by the Corona
crisis!
25 Olav Scholz Germany’s
Minister of Finance: Germany
stands or highest taxes and
duties worldwide.
51 Venus Williams joins
Canadian vegan platform
PlantX as investor &
ambassador.
42 Ryan Reynolds: One
of the ten celebrities who
created their own alcohol
brands in the United States.
COVER STORY
4 Zhong Shanshan built a fortune on China's
Unquenchable demand for his bottled water
GLOBAL NEWS
8 It's getting rolling
10 Fuel cell
12 7 things Bill Gates predicted back in 1999
15 How productive is an hour of work?
EUROPE
16 Sharp drop in Brexit trade set to reverse after UK exports
fall by £1bn
18 Record year for Swiss and European start-ups
20 Nine new Corona billionaires
22 Mining news
23 Most SMEs do not have succession plans in place
25 Germany is the world champion
29 Car bodies from the Weimar Republic
AMERICAS
36 Amazon seals historic $8.45 billion MGM Studios acquisition deal
40 The shift
43 Liquidity boosts venture capital fortunes in Brazil
44 Buy, build, or both? Trends in portfolio company M&A
47 Virgin Hotels’ new CEO readies brand for high-profile expansion
51 Venus Williams joins Canadian vegan platform PlantX
as investor & ambassador
54 Amazon founder Jeff Bezos named as secret owner of luxury
$500m superyacht
57 Ten celebrities who created their own alcohol
2 | M&A NEWS J u n e 2 0 21
 74 Eric Broussard,
Amazon Executive: Stage
ASIA-PACIFIC set for Indian small biz
64 Tech M&A in Asia at record high, main deal driver in the region to build global brands.
66 Winners: FinanceAsia's Country Awards 2021, Part 1
69 Behind TikTok is a Chinese tech giant fuelling
the world’s hottest app
70 Infrastructure investment will play a key role in China’s
economic recovery
74 Stage set for Indian small biz to build global brands
78 Old-school tycoons who made Hong Kong are losing to China’s rich 78 Li Ka-shing: Old-
81 Holtec buys Indian Point Energy Center school tycoons who made
82 Pendal Group acquires US investment management company Hong Kong are losing to
China’s rich.
ME-AFRICA
84 2021 kicks off with a wave of new Mergers and Acquisitions
in the Middle East
90 Bahrain sees 23% rise in the value of government tenders
issued in Q1
92 ‘Airbnb of Saudi’ raises $6m funding to expand across KSA
94 With $517B private wealth, Dubai is Middle East’s richest city
96 Coral Bloom to account for 80% of developed hotels in 81 Dr Kris Sing, Holtech
phase I of Red Sea project President: buys Indian
97 New consortium scores big in South Africa’s floating Point Energy Center.
power station deal
101 Platinum records for South African mines

REAL ESTATE
106 An English estate bigger than Central Park is available
for the first time in 400 years
110 E.L. Doctorow’s long time Manhattan home lists for $2.1 million 90 Shaikh Nayef bin
Khalid Al Khalifa,
EXTRAS Chairman of the Tender
115 The world’s glaciers are melting faster, scientists say Board: Bahrain sees
117 Branding & Brand 23% rise in the value of
118 You are a successful M&A Advisor... government tenders
119 Why did the chicken cross the road? Because... issued in Q1.

110 E.L. Doctorow’s

.Cover story – Cover long time Manhattan
3 | M&A NEWS J u n e 2 0 21 home lists for $2.1m.
Cover Story

Zhong Shanshan built a fortune on

China's unquenchable demand for his
bottled water

Zhong Shanshan
Asia's richest man

According to a report by AFP, until recently, few people had even heard of the
Chinese billionaire with a gruff reputation who built a fortune on China's seemingly
unquenchable demand for his ubiquitous red-capped bottled water.

But reclusive Zhong Shanshan has become Asia's richest man following the stock
listings last year of his Nongfu Spring mineral water and separate pharma company
Wantai Biological Pharmacy Enterprise, which has tapped into massive demand for
Covid-19 test kits.
4 | M&A NEWS J u n e 2 0 21
 Fastest accumulation of
wealth in history

Zhong's net worth has

surged to $85 billion and
made him the seventh-
richest person on the
planet, Hurun Report, a
China-based compiler of
"rich lists", said last week.
Called a "lone wolf" by
Chinese media for his rare
public appearances and
aversion to interviews,
Zhong has achieved one of
the fastest accumulations
of wealth in history, according to Bloomberg. He became the first Chinese
entrepreneur to enter Hurun's top-ten global rich list this year, leaping out of
nowhere to put him hot on the heels of Facebook's Mark Zuckerberg and American
investor Warren Buffett.

Worked as bricklayer,
carpenter

Not bad for someone who

dropped out of school at the
age of 12 during the political
upheaval of China's 1966-76
Cultural Revolution, and
whose later jobs included
bricklayer, carpenter and
news reporter, according to
Chinese media. Zhong
founded Nongfu Spring in
1996 and still owns an 84
percent stake in the
company which, according to market research firm Mintel, holds more than a quarter
of the bottled water market in China, where many people avoid tap water over health
concerns. In contrast to charismatic Alibaba founder Jack Ma -- who Zhong
dethroned as China's richest man - little is known about Nongfu's billionaire boss
aside from his gruff image.

5 | M&A NEWS J u n e 2 0 21
 Nongfu Spring

"I don't have the habit of flattery in

my personality," he once told
Chinese media in a rare interview.
"I don't like to deal with people and
have to drink," he added, referring
to a Chinese business culture that
encourages excessive wining and
dining to cement deals. His
fortunes have risen just as those of
Chinese tech companies have slid.
Ma is now worth a comparatively
paltry $55 billion, according to Hurun, after government regulators launched an anti-
monopoly investigation into his tech empire, which has pummelled Alibaba's share
price and left a massive IPO by financial arm Ant Group in limbo.

Alibaba effect

Although Alibaba and

Nongfu are headquartered
in the humming eastern
tech hub of Hangzhou,
Zhong is not a regular
attendee at the city's
business events, one local
entrepreneur told China
Economic Weekly.

A former business partner

told state media he once
attended an industry
conference with Zhong, who "went to the stage to give a speech and offended
everyone as soon as he opened his mouth", without providing details of the offending
words.

Hurun says the share listings make Zhong one of only a handful of entrepreneurs in
the world today to have founded more than one $10 billion business. Source: The Economic
Times

6 | M&A NEWS J u n e 2 0 21
7 | M&A NEWS J u n e 2 0 21
Plant for fuel cells

It's getting rolling

Frankfurt, May 16, 2021 - Fuel cells for hydrogen cars are expensive. Michelin is now
building a large plant in Europe and promises that the cost of the cells will drop
drastically due to the large quantities.

Several stacks with 75 kW can be connected together.

Under the name Michelin, most people are familiar with products that are round and
black, they enable cars to roll. Less familiar is the fact that the company is also
involved in drive technology.
Since October 2019, for example, fuel cells from the French tyre manufacturer have
been supplying electricity of the Renault Kangoo with electricity, which they produce
from hydrogen and oxygen in the air.
The fuel cells produce electricity from hydrogen and oxygen in the air, with only
water as exhaust gas.

8 | M&A NEWS J u n e 2 0 21
 "Michelin has been working on fuel cell
technology for more than 15 years," explains
Anish Taneja, President of Michelin's Northern
Europe region. The fourth generation is
currently being developed. The fuel cells of
the group are to be available in large
quantities in a few years.
Anish Taneja, President Michelin Northern Europe

For this purpose, the joint venture Symbio was founded with the automotive supplier
Faurecia, it starts this year near Lyon with the construction of one of Europe's largest
factories for fuel cells. In four years, 20,000 fuel cell systems are to be produced
there annually, by the end of the decade it should be more than 200,000.
"The goal is to achieve a market share of twelve per cent and a turnover of 1.5 billion
euros by 2030," says Taneja. While others are rather hesitant - Mercedes has
discontinued its hydrogen model - Michelin is fully committed to the fuel cell.
The company bases its optimism mainly on two developments: On the one hand, the
hydrogen economy is an important building block on the way to climate neutrality,
and the EU's efforts to promote this path are correspondingly energetic.
And secondly, the fuel cell is the heart of the hydrogen car, but its high cost - along
with the lack of filling stations - is the main reason for the niche existence of the few
modes of hydrogen cars that are on offer today.
Here, a change is apparently in sight, because in the large factory the cell should be
able to be produced considerably cheaper than before due to economies of scale and
technical development. "In 2030, the manufacturing costs will only be a tenth of
what they are today," Taneja expects.

The idea is not new

That would be an important step towards the hydrogen car. Even though production
in the new factory will not start until 2023, customer contracts have already been
signed, he says. Symbio currently offers three fuel cell systems with all the necessary
components from its pilot factory in Vénissieux; a small one with 7 to 40 kW power
for use in light commercial vehicles, a medium one with 40 to 80 kW in larger vans,
SUVs or transporters and a large one with 80 to 500 kW for smaller trucks.
The idea of a hydrogen economy - the light element then serves as a clean energy
carrier not only for transport - is not new, but the production through electrolysis
has also been around for more than a century.
The whole thing only becomes environmentally friendly without carbon dioxide when
electricity from renewable energies is used to split water into hydrogen and oxygen.
9 | M&A NEWS J u n e 2 0 21
The idea is to use electrical energy from wind power, for example, which is not
available at the moment, or to produce the hydrogen in the desert using solar power.
Michelin is relying here on the EU's strategy of technological leadership and the
production of 10 million tonnes by 2030.
And what, in Taneja's view, speaks against battery-electric propulsion? Nothing, he
says, but there is a lack of raw materials for the batteries and the charging stations,
and in addition huge amounts of electricity would have to be constantly supplied by
powerful grids. The future of transport belongs to a mix of different technologies,
Michelin bets on competition.
Hydrogen, for example, which is refuelled like liquefied petroleum gas, has its
advantages in combination with the fuel cell on long-distance journeys, in regular
services with their own refuelling station and also in lorries, which probably cannot
be operated sensibly with batteries in the long term. And where will all the green
electricity come from, which will not only replace coal and nuclear energy, but is also
supposed to boost transport? According to Taneja, it is up to the politicians to invest
in the expansion of renewables.
In the long term, we want to run on 100 per cent green power," he says.

The stuff dreams are made of

Fuel cell
The fuel cell turns hydrogen into electricity, which
can be used to travel long distances. That sounds
tempting, but isn't there a catch?

Electric driving could be so pleasant if the energy

could be stored better. While diesel has a calorific
value of around 12 kilowatt hours per kilo, a
modern battery stores only about 150 watt hours
in a kilogram - fortunately, electric motors work
more efficiently than internal combustion
engines, and batteries can be recharged.

Cars with fuel cells are not new,

the first ones came onto the market in 2013.

10 | M&A NEWS J u n e 2 0 21
Nevertheless, until an ingenious innovation revolutionises the energy density of
batteries, electric cars will either lug around huge and heavy packages that contain
expensive raw materials to boot, or they simply won't get far.
One solution is for cars to make their own electric power. This can be done One
solution is for cars to generate their own electricity. This can be done with internal
combustion engines that drive a generator or, technically more elegant, with a fuel
cell. Such cars drive electrically with batteries that are batteries that are constantly
charged by a fuel cell powered by hydrogen from a tank and oxygen from the air.
The advantage: it works quietly, and the only "exhaust gas" produced is clean water.
The principle is not particularly
new. As early as 1838, the
German chemist Christian
Friedrich Schönbein and the
Welshman William Robert Grove
discovered it almost simult-
aneously, but it was easier to
produce electricity with the
generator developed by Werner
Siemens.

Christian Friedrich Schönbein William Robert Grove

The fuel cell was only taken up again for space travel. In it, hydrogen is not burnt in
a flame, but converted electrochemically. The function is basically always the same:
pairs of electrodes are separated by a solid or liquid electrolyte.
When hydrogen and air are added, depending on the type, the protons of the protons
of the fuel migrate through the electrolyte from the anode to the cathode or those
of the atmospheric oxygen from the cathode to the anode, where they combine to
form water.
The electrons that cannot pass through the electrolyte must take the path around
the outside via an electrical conductor, and current flows.
Individual cells are packed together in stacks and connected in series until the
desired voltage is reached. The types differ in the type of electrolyte and the working
temperature. The polymer membrane fuel cell (PEMFC) is used in cars. The
electrolyte is an ion-conducting plastic film.
When electricity is generated, heat is produced that can be used to heat the car. The
range is the same as that of conventional cars, and the fuel is the same as natural
gas. Source: Frankfurter Allgemeine Zeitung

11 | M&A NEWS J u n e 2 0 21
Visions of the future

7 things Bill Gates predicted back in 1999

Bill Gates grins. Bill Gates is said to own around 147 billion US dollars. Together with his soon ex-wife, he
is committed to helping poorer people with the "Bill & Melinda Gates Foundation". Photo: Getty Images

Facebook, price comparison portals, intelligent advertising - all technologies that are
firmly part of our everyday lives these days. In 1999, most people would have
thought it was all science fiction, but Microsoft founder Bill Gates already saw it
coming.
In 1999, Bill Gates, the founder of Microsoft, published his book "Business @ the
Speed of Thought" and gave readers various tips on how to run a business and
develop products. In addition, the CEO made a few predictions about what the
technological world might look like in the future.
As it turns out 20 years later, Gates was amazingly right about almost everything.
On his blog, which has since been taken offline, business student Markus Kirjonen
presented a few quotes from Gates' book that have proved to be equally or partially
true. TECHBOOK has summarised the most fascinating six for you.

12 | M&A NEWS J u n e 2 0 21
1. Social media
"Private websites will be established that will allow your friends and families to chat
with each other and plan events," the visionary wrote in 1999. Four years later, the
three major projects Myspace, LinkedIn and WordPress were launched.
After these were able to generate hundreds of thousands of users in a very short
time, Facebook opened its doors in 2004, initially for students, and in the following
years developed into the largest social media platform of all time with billions of
users. Many others followed, such as YouTube, Instagram, Tumblr and Snapchat.

2. Smartphones
"People will carry around small devices that will allow them to stay in constant
contact with each other and do their business electronically from anywhere. They
will be able to follow the news, see flights they have booked, get information from
the financial markets and do everything else on
these devices," the book says.
The smartphone replaced the classic mobile
phone in the late 2000s. The major difference,
apart from the high-resolution touch screens, was
the proprietary operating system that allowed
users to install a wide range of applications.
Nowadays there is an app for almost every need.

3. Price comparison portals

"Automated price comparison services are being developed that allow users to look
at prices from many sites, making it effortless to find the cheapest product for all
industries," Bill Gates predicted. In the same year, the company Check24 put one of
the first comparison portals online in Germany, at that time for car insurance.
Today there are numerous portals in this country. Most of them are considered
"white labels", which means that the operator receives the price data from the
provider personally.
In addition to price comparison, many portals offer users to create profiles for better
searches, to get other buyers' opinions and to include additional facts such as
delivery time and sustainability in the purchase decision.

13 | M&A NEWS J u n e 2 0 21
4 Personalised advertising
"Devices will have intelligent advertising. They will know your buying preferences
and serve ads that are tailored to your preferences," says the Microsoft founder.
While companies in the late 90s could only place their ads on newspaper websites,
in 1997 GoTo.com became the first operator to start selling targeted ad space on
various websites.
With the rise in computer power and the ability to monitor and direct traffic,
companies have been able to develop many different targeting methods to get
specific ads to the right customer. This involves creating accurate profiles about the
customer through their search habits and social media activity for optimal targeting.

5. Online job placement

In 1999, Gates wrote: "Similarly, job seekers may be able to find jobs online by
specifying their interests, needs and special skills." In 2003, the company LinkedIn
was founded, which is now the largest job network in the world with 500 million
users.
Users upload their individual CVs and profiles to find suitable jobs through it, but can
also be contacted by entrepreneurs. With the exception of China and Russia, the
service can be used anywhere in the world.

6 Smart home
"Constant video surveillance of your home will become commonplace and will let you
know if someone visits you while you are away," Gates thought was no longer remote
science fiction as early as 1999. Moreover, he said that "personal assistants will be
developed that will connect and synchronise all your devices, whether they're at
home or at work, so that data can be shared among them."
According to Gates, it is also conceivable that a user could involve their home device
when shopping in town, for example, preparing a meal by compiling a shopping list
and preparing all kitchen appliances for cooking. With these statements, Gates is
describing here, without knowing it, the phenomenon of the smart home.
Permanent video surveillance is offered by the company Dropcam, for example.
Google Now and Nest provide the system that allows the devices to network and
communicate with each other. In our Smart Home article, we present even more
services and functions. Source: TECHBOOK

14 | M&A NEWS J u n e 2 0 21
In 2015 Bill Gates predicted a Pandemic, too
Bill Gates saw the COVID-19 outbreak coming — and he knew we weren’t prepared
for it. The Microsoft co-founder on multiple occasions over the past decade talked
about the potential for something like the novel coronavirus that has infected nearly
200,000 worldwide and killed almost 8,000 people.
His TED Talk from 2015 titled “The next outbreak? We’re not ready” is being shared
widely online in recent weeks given the impact of COVID-19 around the world. “If
anything kills over 10 million people in the next few decades, it’s likely to be a highly
infectious virus rather than a war,” Gates said during the TED Talk. “Not missiles,
but microbes.” Two years later, he said the same thing at an event in Davos.
“It’s pretty surprising how little preparedness there is for it,” Gates said in 2017.
Source: GeekWire

GDP Statista

How productive is an hour of work?

May 3, 2021 - The Irish are a particularly industrious people - one hour of work here
generates a gross domestic product of around 114.8 U.S. dollars. That's according
to OECD data for 2020, which shows that the average hour worked in Luxembourg
contributes about $109.6 to gross domestic product.

In France, the figure is just under 78 U.S. dollars, while Germany is at around 75
U.S. dollars per hour worked, as the infographic from Statista shows. Eastern
European countries are significantly less productive in terms of gross domestic
product.

Slovenia, the Czech Republic, Slovakia and Hungary are below the EU average of
around 58.1 US dollars per hour worked. A worker in Hungary would therefore have
to work two and a half times as long to make a similarly high contribution to the to
the economy as a person in Ireland. Source: Statista

15 | M&A NEWS J u n e 2 0 21
Unite Kingdom / Ireland

Sharp drop in Brexit trade set to reverse

after UK exports fall by £1bn
The fall-off in trade in the first quarter of 2021 was expected

There have been tens of thousands of inspections at the likes of Dublin and Rosslare Ports on goods
coming into Ireland. Photo: Aidan Crawley/Bloomberg

Dublin, May 26, 2021 - Recent monthly plunges in UK-Irish trade won’t last, experts
say, as new UK figures show average exports to Ireland are up on previous years.

At an event yesterday, the British-Irish Chamber of Commerce and advisory firm

BDO said negative post-Brexit predictions were “overdone” and that trade will
rebound later this year.
16 | M&A NEWS J u n e 2 0 21
“The depth and respect of relationships, consumer preferences, market knowledge,
geo-cultural synergies, trust in supply chains that have grown over decades will not
be eroded because of Brexit,” said John McGrane, director-general of the British-
Irish Chamber.

“The fall off in trade in the first quarter of 2021 was expected, with many businesses
stockpiling in anticipation of disruption, which naturally creates a future deficit,” said
Carol Lynch, a partner at BDO Customs & International Trade. “When combined with
the closure of the UK and Irish retail and hospitality sectors for most of the year, the
drop in imports and exports does not paint the full picture.”

UK exports to Ireland fell by a billion pounds - or

47.3pc - in January compared with December
2020, largely because of stockpiling, the UK’s
Office for National Statistics said yesterday. It was
the largest fall of any of the UK’s top export
partners since the Brexit trade deal came into
force on January 1.

John McGrane, Director-General, British-Irish Chamber

But the data also showed that average exports to Ireland between October 2020 and
March 2021 were higher than for the same period in 2019-20 and in 2017-18.

Figures from Ireland’s Central Statistics Office last week showed that goods imports
from the UK were down by a third in March, compared to the same period in 2020 –
following much larger falls in January and February - while Irish goods exports to
the UK went up by 13pc.

"Whilst businesses may have to adapt to new processes, there is strong demand for
Irish goods and services. With support, businesses will find innovative solutions to
overcome the challenges of the recent trade disruption,” said Mr McGrane.

However, the UK survey found that 38pc of businesses that have exported in the last
12 months say additional paperwork is a challenge when exporting to Ireland and
the EU.

Overall, total UK-EU trade fell by 20.3pc between the last quarter of 2020 and the
first quarter of this year.

The head of the EU’s international trade committee, German MEP Bernd Lange, said
yesterday that trade volumes had “reduced quite significantly” on both sides of the
Channel.
17 | M&A NEWS J u n e 2 0 21
The figures come as MEPs near a deal on how to share out the EU’s €5bn Brexit
adjustment fund. It is due to be signed off by the full Parliament in June.

Last month, EU diplomats suggested shaving €200m from Ireland’s proposed €1.1bn
share of the funding to offer more to France and other EU countries.

MEPs are proposing a less severe cut in Ireland’s allocation, although the final figure
has yet to be released. and the Commission wants to pay the bulk of the funding
this year. Source: Independent.ie

Switzerland

Record year for Swiss and European

start-ups
Despite Corona and Brexit: New and young companies raised
more venture capital in 2020 than in any previous year. This is
shown by EY's Start-up Barometer.
Zurich, May 28, 2021 - Neither the Corona pandemic nor Brexit have slowed down
the funding of European start-ups. On the contrary, the number and value of funding
deals reached record levels in 2020.
The number of financing rounds rose to just under 6,700 - an increase of 58 percent
compared to 2019. The financing volume made a leap of 17 percent to CHF 39 billion.
According to the latest edition of the annual "Start-up Barometer" study by the
consultancy firm EY, the financing volume in the second half of 2020 even reached
the highest value ever for a half-year, at around CHF 22.7 billion.
Thus, the largest three start-up financings of 2020 also fell into this period: The
Telepass Group, an Italian provider of mobility services, raised CHF 1.1 billion in
October.
The British insurance start-up Inigo received around 750 million in November and
the battery manufacturer Northvolt from Sweden 562.8 million.

18 | M&A NEWS J u n e 2 0 21
 The number and value of funding deals reached record levels in 2020. Image: Pixabay

Sascha Stahl, Head Start-ups and Family Business Leader at EY in Switzerland,

comments: "In the wake of the Corona pandemic, numerous challenges for the
economy have become even more apparent - for example, the urgent need for
digitalisation, the vulnerability of logistics chains or the great importance of IT
network security. Many start-ups have the right solutions at the ready. This has made
them attractive to capital providers."
Many transactions in Zurich - Basel with high deals
Switzerland saw strong growth in 2020, with the number of deals increasing by 211
or 64 per cent to 540 deals compared to 2019. This resulted in investments totalling
CHF 1.9 billion (2019: 1.6 billion).
This puts Switzerland in fourth place in Europe in terms of both the number of
agreements and the investment volume, behind the UK, Germany and France in each
case.
In a Switzerland-wide comparison, the most deals were concluded in Zurich in 2020
(168; 2019: 114), while Basel achieved the highest financing volume nationwide
(equivalent to CHF 517.8 million; 2019: CHF 263.2 million).

19 | M&A NEWS J u n e 2 0 21
Lifesciences firms secure the biggest Swiss deals
The three largest Swiss deals in 2020 were achieved by the life sciences companies
VectivBio from Basel and Sophia Genetics from Lausanne (102.3 million US dollars
each) and Monte Rosa Therapeutics from Basel (96 million Swiss francs). Kandou
Bus (Lausanne, 85.9 million), Pharvaris (Zug, 74.4 million), SkyCell (Zurich, 62
million), Screening Eagle Technologies (Zurich, 55 million), Noema Pharma (Basel,
54 million), Bitcoin Suisse (Zug, 45 million) and Polkadot (Zug, 40 million) followed
in fourth to tenth place. Source: KMU_today

Germany

Nine new Corona billionaires

Biontech founder Uğur Şahin. Photo: Ralph Orlowski/REUTERS

The light at the end of the pandemic tunnel was brought by the vaccine.
The life-saving vaccines ensured full coffers for the successful
manufacturers and their investors. At least nine new vaccine billionaires
have been created by the Corona crisis!

May 23, 2021 - The Corona crisis has cost millions of people around the world money,
jobs and economic prospects - in Germany alone, 300 billion euros in wealth was
lost due to lockdowns and other restrictions.

20 | M&A NEWS J u n e 2 0 21
At the top of the list of new billionaires are Biontech CEO Uğur Şahin and Moderna
CEO Stéphane Bancel. According to an analysis by the "People's Vaccine Alliance",
both CEOs now own around 4 billion dollars (3.28 billion euros). This is reported by
CNN.

Senior executives at China's vaccine giant CanSino Biologics and early investors in
Moderna have also become billionaires on paper: The companies' shares skyrocketed
after the vaccine's successful approval.

If the Corona crisis had never happened,

Germany would be almost 300 billion euros
richer today!

Share prices went through the roof

Moderna's share price is up more than 700 per cent since February 2020, while
Biontech shares are up 600 percent. CanSino Biologics' stock is up 440 percent in
the same period.

The nine new vaccine billionaires now collectively own about € 15.85 billion,
according to the calculation.

Enough to fully vaccinate some 780 million people in low-income countries, activists
criticise. "These billionaires are the human face of the huge profits that many
pharmaceutical companies make from the monopoly they have on these vaccines,"
Anne Marriott, Oxfam's health policy manager, said in a statement.

In recent weeks, a debate has flared up about whether the vaccine manufacturers'
patents should be lifted, at least temporarily, in order to be able to produce even
more vaccine worldwide. This is also because the vaccine development was partly
supported with public money. Biontech, for example, had received 325 million euros
from the German government, but had also committed itself to supplying low-income
countries with its vaccine at cost price.

Opponents see a softening of patent protection as a threat to future innovations in

all areas of life. The fear: Those who cannot earn money with a life-saving invention
will not take the risk of failing in its development.

Worldwide, more than 160 companies had tried to develop a vaccine, spending
billions in research and development costs. Only a few companies, including Biontech
and Moderna, were successful in the end and delivered the fastest vaccine in human
history. Most companies, however, were left holding the bag. Source: Bild

21 | M&A NEWS J u n e 2 0 21
Ukraine

Mining news
Rights to mine Lithium, titanium and gold deposits coming up for auction in Ukraine
this year have prompted reports in International Mining, Hellenic Shipping News and
S&P Global Platts. Investor interest is heightened by a forward-looking report
published last week by the International Energy Association: “The Role of Critical
Minerals in Clean Energy Transitions.”

Noting “Ukraine has some of Europe’s biggest lithium reserves, but doesn’t currently
produce the light metal,” S&P stresses Ukraine’s proximity to the EU and the free
trade pact. Referring to a presentation by Roman Opimakh, head of Ukraine’s State
Geological Service, S&P reports: “Three projects are now set to being auctioned:
Kruta Balka with lithium oxide content of 0.86%; Dobra with lithium oxide content
of 1.38%; and Shevchenkivske, with lithium oxide content of 1.1%.”

Planning a series of license auctions for this year, Ukraine has prepared an
Investment Atlas with approximately 30 critical mineral assets, including titanium,
lithium, nickel, cobalt, chrome, tantalum, niobium, beryllium, zirconium, scandium,
molybdenum, gold and graphite, Opimakh said to S&P. Five gold blocks are to
auction. “Ukraine has the potential to become a significant gold producer,” he said.
For most metals, exploration licenses are for five years, and development licenses
are for 20.

Separately, in July, Ukraine’s State Property Fund plans to auction state-owned

United Mining and Chemical Company, Europe’s largest miner of ilmenite, the main
source for titanium oxide. Ukraine produces 6% of global titanium ore and its proven
reserves are among the world’s 10 largest. The first of this year’s ‘Big Privatizations,”
the company is Europe’s only miner of rutile and zircon, reported International
Mining. Information for the auction can be found at this link. Site visits are taking
place. The starting price is $135 million.

To speed the delivery of Ukrainian iron ore to Polish steelmakers, Ukrzaliznytsia has
started to electrify a key bottleneck: a 94 km stretch of track between Kovel, Volyn
oblast, and Izov, on the Polish border.

The crossing handles 90% of the freight tonnage between the two countries, largely
iron ore from Kryvyi Rih. By eliminating diesel locomotives, UZ will be able to cut air
pollution, shorten delivery times and increase the weight of trains by 30%, said Ivan
Yuryk, UZ’s Acting Board Chairman.

22 | M&A NEWS J u n e 2 0 21
Cargill Metals has agreed to invest US$75 million in a Canadian major iron mining
project in Kriviy Rih. In the deal Cargill, a major international iron ore trader, has
agreed to take 4 million tons of iron ore from the Shymanivske mine, reports Black
Iron Inc. “We are very pleased to help finance Black Iron’s Shymanivske Project,”
Lee Kirk, managing director of Cargill Metals, said, noting environmental benefits.
Black Iron’s CEO Matt Simpson released a statement saying: “Black Iron’s planned
68% iron content magnetite pellet feed is in the top 4% of global production by iron
content and is anticipated to reduce emissions generated in the production of steel
by an estimated 30%.”

With world demand strong for iron ore, grain and coal, bulk cargo shipping rates
have hit 11-year highs, Interfax-Ukraine reports, citing the Baltic Dry Freight Cost
Index. In the last month, some rates have jumped by 50% percent. At Ukraine’s
ports, bulk exports account for about 75% of cargo volumes. Source: Henniger Winkelmann
Consulting / CBA Advisors Kiev

Ireland

Most SMEs do not have

succession plans in place
Dublin, May 26, 2021 - Most small and medium-sized
business owners do not have a succession plan in place.

And many of those owners that do not have a continuity

plan in place do not intend to one in place, according to
research commissioned by Investwise Financial Planning.

SMEs need to secure future with proactive planning

says David Quinn of Investwise. Photo: David O'Shea

The research found that 60pc of small or medium-sized enterprises in this country
do not have a succession plan in place to ensure the smooth continuity of the
business after retirement.

And 42pc of SME decision makers who have not planned for succession currently do
not intend to put such a strategy in place. Just 16pc said that they will develop a
succession strategy, while 42pc said that they might. Around three quarters of Irish-
owned businesses in the private sector are family owned.

23 | M&A NEWS J u n e 2 0 21
Managing director of Investwise Financial Planning David Quinn said a lack of
effective succession planning is one of the main reasons why many family businesses
fail to survive to the second generation. He said even fewer survive to the third
generation and beyond.

Mr Quinn of said research indicates less than a third of family business transfer
successfully from one generation to the next. “Our research reveals a significant
opportunity for SME/family businesses to secure their future by proactively planning
for succession. “SME owner/managers pour their heart and soul into their
businesses; protecting a business legacy and creating a strong path to future success
for the next generation are too important to leave on the long finger.”

He said owners need to think about how they can future-proof their business and
ensure that “all the sacrifice and hard work is not wasted but securely invested in an
operation fit for the future”. Reasons for not having a succession plan include a lack
of understanding or knowledge of what is required and not knowing where to start.

Other reasons include the fact that day-to-day business operations can be all-
consuming, and the challenge of balancing family versus business interests. One
third of respondents said succession was not a priority as it was in the future. Source:
Independent.iw

24 | M&A NEWS J u n e 2 0 21
Germany
OECD study ‘The highest taxes and duties’
Germany is the world champion
In no other country do employees have to pay such high taxes and contributions as
in Germany. And contrary to what is often claimed, families are also asked to pay a
lot.

Not yet full? Finance Minister Olaf Scholz is pleased about the high tax revenues in Germany. This is the
country where employees are having their wallets dug into the deepest in the world.

Duesseldorf, May 2, 2021 – The election campaign is approaching, and with it the
dispute over tax policy is once again becoming more heated. The FDP has taken a
positive stance by calling for major tax cuts. The left-wing camp, on the other hand,
wants to reduce the tax burden on lower incomes, but make high-income earners
pay more. The bottom line is that their programs do not envisage any major tax cuts.

However, a new study by the OECD, which annually compares the tax and
contribution burdens of its member states, shows that Germany is already the world
champion when it comes to taxes and contributions.

Nowhere else in the world do employees have to pay such high taxes and
contributions as in Germany. And contrary to what is often claimed, families are also
asked to pay a lot. At least as soon as both spouses work.

25 | M&A NEWS J u n e 2 0 21
According to the study, a single person with average earnings had to pay 38.9
percent of their salary to the tax authorities in the form of taxes and social security
contributions in the previous year. This is the highest burden of all OECD countries.
By comparison, the OECD average is 24.9 percent.

The situation is somewhat better for families in which only one spouse brings home
the money. In Germany, these families benefit from the spousal splitting system,
which improves the tax situation for single-earner households in particular. With a
tax burden of 32.9 percent, Germany ranks ninth in an OECD comparison, putting it
in the upper midfield.

Despite splitting: tax burden high for many couples

Advocates of higher taxes like to use this comparison as proof that the tax burden
in Germany for families is not that high after all.

However, the left-wing parties in particular want to abolish or at least restrict the
marital splitting system, which could increase the tax burden for these families. Even
the more left-wing economist Peter Bofinger therefore thinks nothing of abolishing
marital splitting.

And: As soon as both spouses work, the picture changes. Then, with a burden of
41.5 percent, Germany is again far above the OECD average of 28.9 percent and in
second place behind Belgium. In Belgium, income tax is higher than in Germany, but
above all employers there have to pay high social contributions.

Labour factor is burdened with almost 50 percent

The employer's social contributions are also included for single average earners, the
overall burden on the labor factor in this country is 49 percent. Here, too, the burden
is higher only in Belgium, at 51.5 percent. The average within the OECD is 34.6
percent.

The figures do not yet take into account the tax relief measures that the German
government has launched for 2021. At the beginning of the year, the grand coalition
abolished the solidarity surcharge for 90 percent of taxpayers. This has resulted in a
tidy plus on the pay checks of many employees this year.

On the other hand, however, additional contributions to statutory health insurance

have risen in 2021 as a result of the expensive reforms introduced by Health Minister
Jens Spahn (CDU).

26 | M&A NEWS J u n e 2 0 21
And in view of the billions of euros in gaps in the social security systems in 2022 and
2023, the coming German government will be forced to increase either social
contributions or the tax subsidy to the social security funds. The bottom line is
therefore that the burden is unlikely to fall.

Critics: OECD figures only partly comparable

Critics of the OECD study argue that the annual comparison by the industrialized
countries organization is hardly suitable for justifying tax cuts or increases. For
example, the OECD study excludes deductions such as the lump sum for employees,
the basic tax allowance and the child tax allowance, as well as value-added tax and
property taxes.

27 | M&A NEWS J u n e 2 0 21
If all this were taken into account, the picture would be completely different. For
example, value added tax in Germany is relatively low.

If total revenue from taxes and social security contributions is measured in terms of
annual economic output, Germany ranks ninth in the EU with 41.7 percent. France
then leads this ranking, ahead of Denmark and Belgium.

In addition, countries such as Greece, the USA and Mexico have a much lower tax
burden than Germany. However, employees there have to provide for themselves to
a greater extent due to weaker social systems. The ranking therefore does not reflect
what citizens receive in return for their taxes and contributions.

Countries also differ greatly in how they finance their social systems. Germany's poor
performance is due less to high taxes than to comparatively high social security
contributions.

Scandinavia: Same performance, lower taxes

However, countries with comparable social benefits also perform better than
Germany - including all Scandinavian countries. So the study does provide a little
comparability. Especially since other indicators also suggest that the tax and
contribution burden in Germany is now quite high - especially when measured
against the fact that the 2010s were economically a golden decade for the country.

For example, the federal government is only keeping social security contributions at
40 percent thanks to higher tax subsidies. Without these extra funds from the federal
budget, social contributions would have long since risen above the mark. At the same
time, the state's tax revenues, measured against economic output before the
pandemic, have climbed to almost 24 percent, the highest level since 1980.

The average tax burden for an employee with a constant income has remained
constant or even fallen slightly as a result of various smaller tax cuts, as a recent
study by the Institute of the German Economy showed.

The German tax system disadvantages low earners

But because many employees earned more thanks to the upswing, they had to pay
higher taxes, since in Germany the tax burden increases as income rises - from which
the state in particular benefited through ever higher tax revenues. Despite the lavish
revenues and even identical election programs of the CDU/CSU and SPD on tax
policy, however, the grand coalition has not been able to bring itself to address a
long-standing imbalance in the tax system.

28 | M&A NEWS J u n e 2 0 21
In particular, employees with low incomes are subject to a relatively high tax burden
in Germany, as well as social security contributions. The OECD and other
organizations such as the IMF and the EU have therefore been calling on Germany
for years to reduce the tax and contribution burden on lower incomes. However,
nothing has happened except for a reform of the so-called midi-jobs, which means
that low-income earners have to pay somewhat lower social security contributions.
Source: Handelsblatt

Germany

Berliners revive noble forge Erdmann & Rossi

Car bodies from the Weimar Republic

Erdmann & Rossi in Berlin-Halensee built ex-clusive car bodies
more than 100 years ago. A company takes up the tradition - it is
not only about cars. It will still be expensive.

August 2, 1916 was a special day for Friedrich Peters, owner of the Erdmann & Rossi
body shop in Halensee: For the second time, he received the title of purveyor to the
court, this time from Adolf Friedrich, Grand Duke of Mecklenburg-Strelitz.

He had previously tailored a Mer-cedes-Benz for Princess Charlotte, Duchess of

Mecklenburg-Schwerin, and put a body in black and red on the chassis, which was
delivered from Sindelfingen complete with engine. A dream of an automobile: a
Pullman limousine with a partition window, four doors and even more side windows.
29 | M&A NEWS J u n e 2 0 21
His Royal Highness now called a similar showpiece his own, this time in black and
green. He was highly satisfied.

A century later, Arthur Waldenberger, Managing Director of Automobile Erdmann &

Rossi Licensing Services GmbH & Co. KG, can hardly hope for similar honours, as
November 9, 1918, abruptly ended the time of the court suppliers. However, the era
of luxury cars from Erdmann & Rossi did not.

In the 1920s and 1930s, the company rose to become a legend of German
automotive engineering. It was not until the Second World War that the era came to
an end, and all that remained of the glory of the past was a repair shop in Halensee.

In 2006, even this remnant of the company was extinguished, but the fame of the
early years was still known to specialists in automotive history and collectors of
historic vehicles.

Museum pieces. Arthur Waldenberger, Managing Director of Erdmann & Rossi, in the permanent
exhibition "Road Traffic" at the Museum of Technology in Berlin with curator Frank Steinbeck in front of a
1929 Mercedes refined by Erdmann & Rossi.

30 | M&A NEWS J u n e 2 0 21
For a few years now, however, Erdmann & Rossi has been back, committed to
tradition and acutely aware of its responsibility for the old company name, but in a
completely different form than the original company.

No longer is it a sheet metal shop filled with flying sparks, welding fumes, the smell
of new leather and the fumes of fresh car paint, but rather a start-up residing in a
chic Charlottenburg law firm that grants licenses to selected car body companies for
the reproduction of Erdmann & Rossi brand vehicles.

You could look for an original on Berlin's streets for a long time and still not find it.
But if you want to use your imagination for more than just old photos, there is the
German Museum of Technology in Kreuzberg, the "Road Traffic" department, in the
building wing of the loading area of the former Anhalter freight station. Indeed, there
is a Mercedes-Benz 460 Nürburg from 1929 that was refined in Berlin, designed by
Ferdinand Porsche, then head of design at Daimler-Benz - a not entirely successful
attempt to compete with the Horch 8 in the league of luxurious eight-cylinder cars.

Two-tone paint and lots of chrome

In comparison, the Nürburg was "more like a handcart," says Arthur Waldenberger,
who immediately starts talking shop with curator Frank Steinbeck during his visit to
the museum. After all, thanks to Erdmann & Rossi, the car on display has been
transformed into a highly elegant cabriolet, typically painted in two colours, blue and
black, and decorated with lots of chrome. It is not one of the clunky tanks that
Daimler-Benz was building at the time, but rather a vehicle with elegantly flowing
lines, pure luxury, with 80 hp and a speed of up to 100 km/h, but very thirsty: the
car consumed 25 litres per 100 kilometres.

Drawing
of a Horch
951
Sedan
cabriolet
from the
Erdmann
& Rossi
archive.
© Archive
Erdmann
& Rossi

31 | M&A NEWS J u n e 2 0 21
Nevertheless, a vehicle that can still make a technophile shine today. But how does
one come up with the idea of wanting to reanimate the bodywork art of bygone
times manifested in such a gem, and the long-dead brand at the same time? Arthur
Waldenberger has to correct this. As famous as Erdmann & Rossi once was, it was
not a brand. It would hardly have been possible to register the name in the pre-war
period. At that time, goods could be protected as trademarks, not services such as
the design and construction of individual car bodies.

The book of a Berlin architect brought the idea

Waldenberger should know, after all he has a doctorate in trademark law and
specializes in this field as a lawyer. For a long time, he had also had the idea of
reactivating a brand that had fallen into oblivion.

In addition, he was interested in cars, especially historical ones, and one day he
came across the book by Berlin architect Rupert Stuhlemmer about Erdmann & Rossi
("Nobelkarosserien aus Berlin, Verlag Kraftakt, Halle/Saale”) - the initial spark for the
rebirth of the brand, which only now, set in motion by Waldenberger, also became
a brand in the legal sense.

The company was founded in 2011 with three partners, but it still took a few years
for the idea to become the first registered vehicle. It's not as if there were an
abundance of design plans lying around, right down to the last detail.

It is estimated that no more than 700 bodies were released from the Erdmann &
Rossi factory onto the roads between 1906 and 1949, most of which have been
scrapped, lost, or are now history.

This Maybach DS 8 refined by Erdmann

& Rossi - built between 1930 and 1940
- belonged to Prince Bernhard of the
Netherlands (1911 to 2004). © Archive
Erdmann & Rossi

However, a number of models -

Waldenberger speaks of a
"double-digit number" - are so
well documented by plans,
drawings and photos that a
reproduction is possible, carried
out by highly specialized body
builders who are familiar with
historical techniques and, above
all, have a license from Berlin.
32 | M&A NEWS J u n e 2 0 21
The prerequisite is a historic chassis including engine, but Waldenberger assures us
that we can also help with its procurement.

The finished vehicles are roadworthy, and because of the original chassis they even
receive an H-approval plate - individually manufactured to the highest quality
standards, "luxury in the fifth dimension," as the website puts it.

You need time and 500,000 euros - at least

However, if you want to buy a luxury car, you should have a bit of time and a
generous financial cushion. It takes two years from the order to the handover of the
car, and you have to reckon with at least half a million euros, Waldenberger reveals.
Three vehicles have been built since 2016, including the Horch 853 Special Roadster
pictured on the website. A streamlined coupé based on a 1936 BMW 319/1 is
currently being built in a workshop near Brandenburg an der Havel.

A replica Horch 853 special roadster. The original had a 5.0-liter engine and weighed up to 2.8 tons
empty. © Erdmann & Rossi

33 | M&A NEWS J u n e 2 0 21
Waldenberger admits that her project has met with scepticism in the classic car
scene; replicas are frowned upon by purists. But companies such as Jaguar have
already copied their own car legends, Aston Martin James Bond's DB5, for example.
They only produce vehicles that no longer exist. The new car, a one-off based on a
historic model, is also in far better condition than some classic cars.

However, the lawyer and his partners want to do more than just press new sheet
metal into old forms. Erdmann & Rossi is to be established as a luxury brand from
Berlin, for products that revolve, directly or indirectly, around the themes of driving,
travel, and movement. The ambitious plans even aim at Erdmann & Rossi as a new
brand for new luxury cars, sports cars with modern drives above all, manufactured
in small series.

Who does not have half a million can buy chocolates

So far, except for the replicas, it has remained with more manageable offerings. A
miniature clock designed by Klaus Jakob, a watchmaker from Lörrach, based on
historical fittings, is already out of stock, and a second edition is to follow. The Berlin
confectionery manufacturer Maison de Slik has put together a special edition of
confectionery, which is sold in beautifully designed, leather-covered wooden boxes
and which, it is said, are also suitable for stylish storage of small vintage car parts
after consumption.

And with the license partner automobile club of Germany (AvD) a Mappe with art
prints of some body designs of Erdmann & Rossi was brought out. The greeting in
the enclosed brochure was written by Albrecht Prince von Hohenzollern, President
of the Imperial Automobile Club, which was newly founded in 2012 and is associated
with the AvD as a traditional club.

He is the younger brother of Karl Friedrich von Hohenzollern, the head of the
Swabian line of the house, not to be confused with the Brandenburg-Prussian line,
whose head Georg Friedrich Prinz von Preussen is currently more associated with
exclusive real estate and gems of art history than with cars. The brief excursion into
Hohenzollern genealogy is appropriate, since Kaiser Wilhelm II was also a customer
of Erdmann & Rossi, ordering the extremely appropriate "Torpedo carriage" there as
a state gift for the Turkish Minister of War Enver Pasha.

Willi Erdmann could not have dreamed of such success when he opened a
coachbuilding business in Luisenstrasse in Mitte in 1897. In 1906, Eduard Rossi, who
was already familiar with automobiles, joined the company as a partner. Their
company now focused entirely on the new means of transport and moved to
Linienstrasse in Mitte, but Rossi was killed in an accident three years later.

34 | M&A NEWS J u n e 2 0 21
 After a short period as sole owner, Erdmann sold
to his chief accountant Friedrich Peters, who
determined the fate of the company for 30
years. He was followed by his brother Richard,
then by his son Günther.

International Motor Show IAA 1933

in Berlin: Streamlined coupé with
1.7-liter 7/40 - Mer-cedes engine
and a body by Erdmann & Rossi.

Under Friedrich Peters, the company quickly moved up into the premier league of
German coachbuilders and played a leading role. From 1923, it was based at
Karlsruher Strasse 19-22 in Berlin-Halensee, with up to 250 employees. Ten years
later, it took over its competitor Jos. Neuss, adding its name to its own company
logo.

Along with the workforce of Jos. Neuss' staff, its coachbuilder Johannes Beeskow,
now a legend in his own right, had also moved to Peters. Both shared a preference
for streamlined bodies, which were fitted to chassis of luxury brands such as Merce-
des-Benz, Horch, Maybach, Rolls-Royce, and Bentley.

The exclusive clientele included members of the high nobility such as former Crown
Prince Wilhelm of Prussia, Prince Bernhard of the Netherlands or Iraq's King Ghazi I,
entrepreneurs such as Ernst Heinkel, actors Emil Jannings and Gustav Fröhlich, Ernst
Udet, flying ace and model for the title character in Carl Zuckmayer's "Des Teufels
General" (The Devil's General), or Nazi celebrities such as Hermann Göring and
Rudolf Heß.

The racing drivers Rudolf Carraciola and Bernd Rosemeyer also ordered from
Erdmann & Rossi. The latter had very specific ideas for the body to the chassis of a
Horch 853, which unfortunately could not all be implemented should his 1937-built
"Manuela" coupé ever be reconstructed like the special roadster of the same model
already reborn thanks to Automobile Erdmann & Rossi Licensing Services.

"Mr. Rosemeyer attaches great importance to high seat support under the knees" -
the wish handed down in the order book could easily be fulfilled, for the ordered fire
protection it looks different: The splashboard and the floor in front of the driver's
seat were to be "very well sealed with asbestos," the racing driver, who was trying
to prevent possible accidents, had demanded. Asbestos? That's not possible. Source:
Der Tagesspiegel

Museum Video: https://www.youtube.com/watch?v=9Cbmzz3aOMk

35 | M&A NEWS J u n e 2 0 21
United States

Amazon seals historic $8.45 billion MGM

Studios acquisition deal

New York, May 27, 2021 - Amazon finally acquired MGM after days of continuous
reporting about the deal. The contract was signed and it was said to be something
historic because Metro-Goldwyn-Mayer is a legendary studio in Hollywood. Amazon
purchased MGM Studios for $8.45 billion and with it, the tech and e-commerce
company just obtained a huge collection of media content.

36 | M&A NEWS J u n e 2 0 21
The content alone is overwhelming because it includes numerous popular media
pieces that have been around for a long time and still remain popular to this day.

Amazon’s significant media acquisition this year

As per CNBC, Amazon is aiming to compete with big players in the streaming market,
which means it plans to go against Netflix, Hulu, Disney Plus, HBO Max and other
brands by providing its own Prime Video with amazing content.

Now that it has officially purchased MGM Studios, it means that it can now use its
large library of all-time favorites series, movies and reality shows such as “Rocky,”
“James Bond,” The Wizard of Oz,” “The Handmaid’s Tale,” “Survivor” and “Real
Housewives.”

These titles and a lot more others can be added to Prime Video as exclusives. It can
be said that its acquisition of MGM is a strategic move to attract more subscribers
for Amazon Prime.

Currently, it was mentioned that Prime has over 175 million subscribers and they
have streamed movies and TV shows in the previous year. Prime subscribers also
enjoy free shipping, but with the new media content that it will be offering after
buying MGM, it was predicted that more people will sign up because of this.

The gains from the MGM mega-deal

More sign-ups will also mean more sales for the Amazon e-commerce store. Thus, it
is clear that there is a lot to gain from this sealed deal. As per CNN Business, MGM
Studios’ extensive library consists of more than 4,000 film and 17,000 TV show
catalogs and these will all belong to Jeff Bezos’ company now.

“The real financial value behind this deal is the treasure trove of IP in the deep
catalog that we plan to reimagine and develop together with MGM’s talented team,”
Amazon Studios and Prime Video senior vice president, Mike Hopkins, said. “It’s very
exciting and provides so many opportunities for high-quality storytelling.”

Finally, Jeff Bezos said that Amazon is really excited to have MGM on its turf. He is
looking forward to developing the vast catalog and intellectual property (IP) that
they acquired for this century. Source: EconoTimes

37 | M&A NEWS J u n e 2 0 21
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United States

The shift
Facebook’s ‘Supreme Court’ tells Zuckerberg he’s the decider. he
company tried to punt its Trump dilemma to a panel of experts.
On Wednesday, the experts punted back. By Kevin Rose

New York, May 6, 2021 - There’s

a saying plastered on the walls
of Facebook’s headquarters in
Menlo Park, Calif.: “Nothing at
Facebook is somebody else’s
problem.”

It’s one of the social network’s

bedrock principles — the idea
that, instead of offloading hard
challenges to others, Face-
bookers should roll up their
sleeves and do it themselves.

So, it was a bit of poetic justice that on Wednesday, the Facebook Oversight Board
— a newish panel of experts charged with ruling on some of the company’s hardest
calls on content moderation — rejected the company’s attempt to outsource one of
the thorniest tasks in its 17-year history: deciding what to do about former President
Donald J. Trump.

Mark Zuckerberg, the company’s chief executive, had hoped that the board — a
group of roughly 20 lawyers, scholars and former politicians — would render up-or-
down verdicts on such questions.

Instead, the group handed down another message: Mr. Zuckerberg, this problem is
yours to fix.

Technically, the oversight board upheld Facebook’s decision to restrict Mr. Trump
from posting on Facebook and Instagram after the Jan. 6 insurrection at the U.S.
Capitol, which was fuelled by election disinformation that Mr. Trump shared on his
social media accounts.

40 | M&A NEWS J u n e 2 0 21
 But the group also criticized Facebook for seeking to
“avoid its responsibilities” by giving Mr. Trump “the
indeterminate and standardless penalty of indefinite
suspension,” rather than making a permanent decision
about whether to reinstate him, suspend him for a finite
period or bar him permanently.

And it punted the decision about Mr. Trump’s accounts

back to the company, saying that Facebook would have
to issue a final verdict within six months.

The board’s decision to uphold Facebook’s suspension of

Mr. Trump was a relief to many at the company, where
some employees were privately worried that they would
soon face pressure to allow Mr. Trump to run wild on their
platform again. On Wednesday, the company released a
statement saying it was “pleased the board has recognized that the unprecedented
circumstances justified the exceptional measure we took.”

But the board’s refusal to settle the larger question of Mr. Trump’s Facebook future
was a setback in Mr. Zuckerberg’s years-long quest to extricate himself from the
center of a global free speech debate, and delegate the responsibility of deciding
what Facebook’s 2.7 billion users can and can’t post to a more willing set of referees.

When Mr. Zuckerberg first pitched the idea of a “Facebook Supreme Court” several
years ago, he promoted it as a way to make the company’s governance more
democratic, by forming an independent body of subject matter experts and giving
them the power to hear appeals from users.

“I think in any kind of good-functioning democratic system, there needs to be a way

to appeal,” Mr. Zuckerberg told Ezra Klein in a 2018 Vox podcast.

The oversight board also served another purpose. For years, Mr. Zuckerberg had
been called in as Facebook’s policy judge of last resort. (In 2018, for example, he
got personally involved in the decision to bar Alex Jones, the Infowars conspiracy
theorist.)

But high-profile moderation decisions were often unpopular, and the blowback was
often fierce. If it worked, the oversight board would take responsibility for making
the platform’s most contentious content decisions, while shielding Mr. Zuckerberg
and his policy team from criticism.

41 | M&A NEWS J u n e 2 0 21
It’s hard to imagine a dispute Mr. Zuckerberg would be more eager to avoid than
the one about Mr. Trump. The former president rode Facebook to the White House
in 2016, then tormented the company by repeatedly skirting its rules and daring
executives to punish him for it. When they finally did, Republicans raged at Mr.
Zuckerberg and his lieutenants, accusing them of politically motivated censorship.

Facebook faced plenty of pressure in the other direction, too — both from Democrats
and civil rights groups and from employees, many of whom saw Mr. Trump’s
presence on Facebook as fundamentally incompatible with their goal of reducing
harmful misinformation and hate speech. No matter what Mr. Zuckerberg and his
team decided, they were sure to inflame the online speech wars and make more
enemies.

Before the decision on Wednesday, Mr. Zuckerberg and other Facebook executives
did everything they could to convince a sckeptical public that the oversight board
would have real teeth. They funded the group through a legally independent trust,
filled it with hyper-credentialed experts and pledged to abide by its rulings. But for
all its claims of legitimacy, the oversight board has always had a Potemkin quality to
it.

Its leaders were selected by Facebook, and its members are (handsomely) paid out
of the company’s pockets. Its mandate is limited, and none of its rulings are binding,
in any meaningful sense of that word. If Mr. Zuckerberg decided tomorrow to ignore
the board’s advice and reinstate Mr. Trump’s accounts, nothing — no act of
Congress, no judicial writ, no angry letter from Facebook shareholders — could stop
him.

That paradoxical setup — an oversight board with no legally enforceable powers of

oversight — created tension even before the decision on Wednesday. The board has
overturned Facebook’s decisions in the majority of the cases it has reviewed so far,
and Facebook has pushed back in several instances.

In February, the company rejected the panel’s call to be more lenient with users who
posted endorsements of Covid-19 treatments that contradicted the advice of health
officials, such as a user who endorsed the use of hydroxychloroquine and
azithromycin to treat the virus.

Facebook responded by saying that it would do no such thing, and that it disagreed
with the oversight board’s assessment that such posts did not create an imminent
risk of harm. (Technically, Facebook was allowed to ignore the board on this point
because its statement was a nonbinding recommendation, rather than an official
decision. But since this is all corporate Calvinball anyway, I’m not sure the distinction
means much.)
42 | M&A NEWS J u n e 2 0 21
Don’t get me wrong: I’m not saying the oversight board is a useless experiment, or
that nothing productive will come from it. From what I know, the board is composed
of thoughtful people who care deeply about fairness and free expression, some of
whom are agitating for a bigger remit.

I’m not suggesting that Mr. Zuckerberg’s making these calls on his own is a good
thing, or that the U.S. government would be better at drawing the boundaries of
online speech than a corporate advisory panel.

I’m also not saying that other social media platforms are better than Facebook at
governing themselves in a transparent and consistent way. YouTube, for example,
has said only that it will reinstate Mr. Trump’s account at some unspecified date in
the future, when it presents less risk of fomenting violence.

What I am suggesting is that all of this — the oversight board, the 9,000-plus public
comments it received while deliberating on Mr. Trump’s case, the six-month deadline
Facebook now faces to render a final verdict — is a weak substitute for actual
accountability, or a process that would meaningfully reduce the power Mr.
Zuckerberg and his peers have over the online speech of billions of people.

Whether you agree with the oversight board’s decisions or not, let’s not kid ourselves
about who’s really in charge of Facebook. The social network is still a “Mark
Zuckerberg production,” and no quasi-judicial verdict will change that. Source: The New
York Times

Brazil

Liquidity boosts
venture capital
fortunes in Brazil
Sao Paulo, May 27, 2021- Venture capital firms
have emerged as big winners during the era
of low interest rates in Brazil, as younger and
smaller companies have accessed capital markets through initial public offerings
(IPOs), according to a survey by local digital investment platform Confiance Invest.

43 | M&A NEWS J u n e 2 0 21
"Now, a company can dream about an IPO
within five years of existence because the
market is mature," said Gustavo Poppe, head of
Confiance Invest. "There is liquidity all over the
market. That is the beauty of a more mature
capital market."
Gustavo Poppe,
CEO Confiance Invest

In the first four months of 2020, more than 40% of IPOs in Brazil came from
companies less than 20 years old, while almost a quarter came from companies less
than 10 years old, Confiance Invest said. A third of them had less than BRL300
million ($56.5 million) in sales, it added.

"There is some appetite for companies with just 10 years of experience and sales of
less than BRL300 million. It did not use to be the case," Poppe said.

The number of IPOs in Brazil came to 22 in the first four months of the year, equal
to 79% of the number registered during the same period last year. M&A deals,
meanwhile, rose 120% year-on-year in the same period, according to Confiance
Invest.

"We see greater liquidity for IPOs of smaller and younger companies and also for
M&As with a stronger intensity in input operations or venture capital, which
translates in greater attractiveness for such a market as there are likely greater exit
opportunities," Poppe said. One such example, Enjoei, an 11-year-old online
marketplace, raised BRL1.13 billion in an IPO in November last year. Source: Latin Finance

United States

Buy, build, or both? Trends in portfolio

company M&A
New York, May 20, 2021 - Add-on acquisition activity in the United States has
experienced a steady, near linear growth since the early 2000s. In 2002, add-ons
accounted for 43.2% of all buyout activity.

Last year, add-ons accounted for a staggering 71.7% of all buyout activity – a 65%
increase in less than 20 years.
44 | M&A NEWS J u n e 2 0 21
Any trend that spans two decades with the resilience to withstand multiple financial
crises deserves attention and further analysis. In this article, we examine a few of
the tail winds behind the consistent growth of the buy-and-build strategy. We also
feature a list of the most active Axial members and their portfolio companies pursuing
add-on opportunities via the Axial platform.

Discounted deals on the decline

A recent survey of private capital fund managers

revealed that 91% of respondents expect there to be
a significant hike in asset prices over the next 6
months. This sentiment comes on the heels of an
already historically high EBITDA multiple environment,
according to data from Bain & Company. After a year
rife with uncertainty and economic volatility, investors
seem more ready than ever to put their capital to work,
contributing to the increase in valuations and
competition. Industries such as payments, IT services,
and vertical software have been especially competitive due to their insulation from
the fallout of COVID-19 and recession proof characteristics. GPs have had to
consistently pay up for businesses in these industries, and in turn, are doubling down
on inorganic growth strategies to remain competitive.

Multiple arbitrage

Multiple arbitrage is one of the most oft-cited reasons and strategies that PE buyers
will use to offset the effects of rising valuations. The logic behind multiple arbitrage
is fairly straightforward.

45 | M&A NEWS J u n e 2 0 21
Larger companies often demand higher EBITDA multiples than smaller ones do.
Rolling up a group of smaller, but cheaper companies can therefore more cost
effectively increase the net exit value of an investment over time.

Buy-and-build strategies also give GPs access to less competitive segments of the
market that would normally be considered too small due to minimum equity check
requirements. This approach has shined a light on the lower middle market,
specifically companies generating between $5-100M revenue, where there is no
shortage of targets to pursue (364,900 as of February 2021).

Data from the Axial Platform

The Axial platform specializes in connecting the lower middle market’s entrepreneurs
and their advisors with a diverse group of capital partners. Our unique position in
the LMM M&A economy has given us a front row seat to the growth in add-on deal
activity over the last few years. Add-on mandates on the platform have grown an
average of 55% every year since 2015. 2021 is on pace to record the highest number
of net new add-on projects on the platform.

Industry Breakdown

The buy-and-build model

traditionally favors any
fragmented sector where
the sponsor and/or ma-
nagement team at the
portfolio company level
have expertise in executing
and integrating new
acquisitions. The pie chart
below displays the most
popular industries among
Axial members currently
pursuing add-on acquisit-
ions. Source: Axial

46 | M&A NEWS J u n e 2 0 21
United States

Virgin Hotels’ new CEO readies brand for

high-profile expansion
James Bermingham joined company after leading Montage's
operations

Virgin Hotels has a portfolio of five hotels with new properties opening soon in markets such as New York
City. Shown here is the Funny Library coffee shop at Virgin Hotels Dallas in Dallas, Texas. (Virgin Hotels)

New York, May 19, 2021 - While James Bermingham’s success as Virgin Hotels’ new
CEO will depend on his brand’s ability to penetrate some of the most competitive
hotel markets in America, his exuberance towards meeting this goal was manifested
long ago across the Pond.

“I was born and raised in Dublin, and lived in London,” Bermingham said in reference
to Sir Richard Branson and his London-based Virgin Group of companies. “I’ve always
been an admirer of his approach to people, product and planet.”

47 | M&A NEWS J u n e 2 0 21
 James Bermingham is CEO of Virgin Hotels.

Bermingham, who took the Virgin Hotels

CEO post in early March after almost two
decades with luxury hotel company
Montage Hotels & Resorts, can’t afford to
waste any time applying that approach.
Having opened its fourth property in
Nashville last July, Virgin Hotels soft-
opened its 1,500-room Las Vegas hotel at
the site of the former Hard Rock Hotel in
late March, and its official grand opening
is set for June. The company will also
debut its New Orleans property this
summer and will open a 463-room, glass-
clad new-build hotel in New York by early
next year. The brand’s first non-U.S. property is slated to open in Edinburgh next
spring.

All the while, Bermingham looks to maintain the brand’s hallmarks, whether they be
the hotels’ multi-section guest “chambers” where the bedrooms can be closed off
from bathrooms and closets, its Commons Club restaurant and lounge, its Funny
Library coffee shop, the red-and-white color motif, or the brand’s vow to avoid price-
gauging via guest perks like free parking at the Las Vegas hotel and mini-bar items
available at local convenience store prices.

In the post-COVID-19 age, Bermingham is also counting on the hotel brand’s “Lucy”
smartphone app to help set the brand apart from other lifestyle brands by enabling
guests to minimize contact through the app’s remote check-in, keyless room access
and in-room controls.

“We’ve proven during the last eight to 12 months how effectively we can operate
and deliver the experience in the COVID environment,” he said. “The quality of our
protocols is really tried and tested.”

Virgin Hotels is scaling up just as the U.S. hotel industry appears to be edging its
way back towards normalcy. For the first quarter, U.S. hotel revenue per available
room was $46.16 per night on a 46.5% occupancy rate and an average daily rate of
$99.35, according to STR, CoStar's hospitality analytics firm. While RevPAR
represented a 42% drop from the pre-pandemic period of first-quarter 2019, first-
quarter RevPAR was still up about $1 a night from last year. And for the week ended
May 1, U.S. RevPAR had increased to $62.13 as occupancy hit 57%.

48 | M&A NEWS J u n e 2 0 21
Chekitan Dev, Singapore Tourism distinguished professor in Asian Hospitality
Management at Cornell University's School of Hotel Administration in the SC College
of Business, said Bermingham has as two-part challenge ahead.

"Imbue Virgin Hotels with the flawless operations excellence that Montage is known
for and, at the same time, keep Virgin Hotels’ iconoclastic and irreverent image
distinct from every other hotel brand," he said. “Virgin’s timing is perfect as the
cracks have begun to show in some legacy hotel brands, and independent hotels are
hurting."

Looking ahead to a brighter future

Bermingham, 55, is counting on Virgin Hotels’ future to be brighter than its past. In
2011, the company partnered with a Chicago developer to acquire the Old Dearborn
Bank Building with plans to open the brand’s first property there in 2013. At the time,
Virgin Hotels also said that hotels in Los Angeles, New York, Miami, San Francisco,
Washington and London were in development, along with planning more growth with
an asset-light strategy in which Virgin Hotels would bring in developers to build and
own the hotels while the brand would manage them. Virgin Hotels was also counting
on the network of Virgin-branded airlines to help promote the new hotel brand.

Shown here is a rendering of Virgin Hotels

New York, which is expected to open in
Winter 2021.
(Virgin Hotels)

But the brand lost one of those

airlines when Alaska Airlines
acquired Virgin America in 2016
and phased out the brand by
2019. Meanwhile, the Chicago
property didn’t open until early
2015, and the brand’s next two
properties — in San Francisco and
Dallas — didn’t open until 2019.
Additionally, after the San Franc-
isco hotel shut down to meet the pandemic stay-at-home protocol that the city
enacted in March 2020, the San Francisco hotel’s owner terminated Virgin Hotels’
management contract.

In turn, Virgin Hotels sued the hotel owner last May for allegedly wrongly terminating
the contract.

49 | M&A NEWS J u n e 2 0 21
“From a market-penetration standpoint, [the hotel] did very well. The intent to
unlawfully terminate the management agreement gave us no option,” Bermingham
said of the lawsuit. “San Francisco is an important market. Absolutely, we will be in
that market at some point in the future.”

The next step in that future is the official grand opening of Virgin Hotels Las Vegas,
which was redeveloped from the former Hard Rock Hotel by JC Hospitality Partners
and includes restaurants such as Nobu and Los Angeles-based Thai food offshoot
Night + Market, in addition to the Commons Club and Funny Library.

Fletch Brunelle, vice president of marketing for the Las Vegas Convention and Visitors
Authority, said Virgin Hotels brought a different property into the market than what
was there.

“It’s a unique offering," he said.

The next property scheduled to open is the 225-room Virgin Hotels New Orleans,
which is due to open in August. And by early next year, the 463-room Virgin Hotels
New York, which is being built by the Lam Group, will open in Manhattan’s NoMad
district.

Challenges of expanding the brand

While acknowledging the twin challenges of expanding a brand in the wake of a

pandemic and establishing a foothold in markets such as Las Vegas and New York,
both Bermingham and Dev indicated that the combination of Virgin’s global presence
and consumers’ willingness to explore newer brands when resuming travel may work
to the brand’s advantage.

“Opening in two hyper-competitive markets will help Virgin iron out any kinks it has
in its marketing and operations models to help it enter other markets,” Dev said.
“Plus, these two hotels will serve as living billboards to increase awareness and offer
proof of concept to hotel owners and guests.”

Bermingham added that the brand is seeing "a pretty extraordinary desire to travel."

“Every Virgin company scales, and usually scales fast. That’s going to happen," he
said. Source: Hotel News

50 | M&A NEWS J u n e 2 0 21
Canada / United States

Venus Williams joins Canadian vegan

platform PlantX as investor &
ambassador

Vancouver, May 8, 2021 - Tennis champion and entrepreneur Venus Williams has
joined plant-based e-commerce platform PlantX as an investor and ambassador in
an effort to help the company raise awareness about the benefits of plant-based
foods and encourage consumers to shift to a plant-based lifestyle.

Canada-based PlantX, which offers over 10,000 plant-based products across the
food, beauty and clothing sectors, announced its partnership with plant-based
advocate Venus Williams and as a PlantX ambassador, Williams will promote the
company’s mission of helping everyone easily transition to a plant-based diet.

51 | M&A NEWS J u n e 2 0 21
Willams, who has seven Grand Slam titles, five Wimbledon titles, and four Olympic
gold medals to her name, was diagnosed with Sjögren’s syndrome, a condition where
the body’s immune system attacks its own healthy cells many years ago. To recover
from the effects of the condition, and to get back to her professional tennis career,
Williams adopted a plant-based lifestyle in 2011 and since then, the diet has proved
beneficial for her, with the champion athlete crediting it for her successful return to
tennis.
This led Williams to launch her own vegan protein firm, Happy Viking, which provides
a range of yellow pea and brown rice protein blends. The products contain omega-
3 fatty acids and gut-friendly prebiotic fiber. Featuring a combination of Complete
Body Mind Macronutrients (CBMM) and
inspired by Williams’ post-workout recipe,
her shake will soon be available to buy on
PlantX’s e-commerce platform in Canada
and U.S.

Vegan marketplace PlantX

filed for NASDAQ listing in January

In a press release seen by Green Queen, Williams said that she is thrilled to be
partnering with PlantX. “It is the first marketplace of its kind and I wish it had been
around when I was transitioning to a plant-based diet over a decade ago. Living a
plant-based lifestyle has improved my quality of life and I am looking forward to
working with PlantX to help others learn about the benefits of living plant-based.”

Furthermore, through this partnership, Williams will share her own journey with
having a plant-based lifestyle and will curate a list of her personal favourites from
the PlantX product portfolio under a special section called “Venus’ Favorites”,
promoting it on her social media channels as well.

PlantX founder, Sean Dollinger (photo

left) said: “Venus’ success as an elite
plant-based athlete is incredibly
inspiring. I am thrilled that our values
align so powerfully in a way that can
encourage people to give plant-based
living a try. Our partnership with
Venus aims to celebrate these values
and raise awareness of the benefits
that a plant-based lifestyle can
provide.”

52 | M&A NEWS J u n e 2 0 21
 Apart from this partnership, PlantX
appointed U.S.-based Michelin-rated
celebrity chef, and author Chef
Matthew Kenney as its Chief Culinary
Officer, signed a five-year agreement
with Matthew Kenney Cuisine(MKC),
and is set to acquire Kenney’s plant-
based deli and retail space, New Deli.
Kenney will be instrumental in
product and recipe innovation and will
head the meal delivery vertical.

Matthew Keneddy, Chief Culinary Officer

After expanding to the U.S. late last year with its online platform, PlantX will be
opening brick-and-mortar retail stores in locations like San Diego, CA; Canada; and
Israel, and has plans for future franchises across North America.

Other athletes too are promoting the benefits of plant-based diets, for instance, U.S.
soccer stars Toni Pressley and Ali Riley are set to unveil a vegan cooking show called
‘Girls Gone Veg’, to change the perception that “veganism is not a sustainable diet
for athletes and that vegan dishes are these hollow, unfilling meals” and through
their own personal experiences, will link these diets to the effects of being able to
play at the highest level of professional soccer.

U.S. professional boxer Claressa

Shields too recently highlighted how
her strength and athletic performance
is attributed to her plant-based diet
after she won at the junior
middleweight division and made
history as the first woman fighter to
win an undisputed championship in
two weight classes.

Claressa Shields, boxing champion

The James Cameron and Arnold Schwarzenegger backed documentary film The
Game Changers drew worldwide attention to the performance gains for athletes
following plant-based diets and highlighted the misinformation the animal protein
industry promotes. Source: green queen

53 | M&A NEWS J u n e 2 0 21
United States

Amazon founder Jeff Bezos named as

secret owner of luxury $500m superyacht

The Eos in Hong Kong. Photographer: South China Morning Post/Getty Images/Dickson Lee

May 10, 2021 - Jeff Bezos, the billionaire founder of Amazon, is finally set to join the
gilded ranks of the haves and have-yachts.

The world’s richest man has been named as the soon-to-be proud owner of one of
the most expensive and extravagant superyachts ever built.

At 127metres (420ft) the craft - known only by its project name Y721 - will be as
long as the Great Pyramid at Giza is tall and loaded with state-of-the-art treasures
including an in-deck swimming pool and ‘ambient’ cinema, all contributing to a
rumoured price tag of around $500million.

It will be one of the finest sailing yachts in existence.

Bezos, whose fortune is around $200 billion, would also have to foot an estimated
$50 million annual running costs bill.

54 | M&A NEWS J u n e 2 0 21
Bezos and partner, Lauren Sanchez, a helicopter pilot, have commissioned a separate support vessel with
a dedicated landing facility. Photographer: Simon Stacpoole/Offside/Getty Images

Plans for the luxury sailing ship are being kept under wraps but some details have
now emerged via its Netherlands-based manufacturer Oceanco’s website and
through enthusiast forums.

The details so far available suggest it may be modelled on the 106-metre Black Pearl,
pictured below, currently the largest and most technologically advanced sailing yacht
in the world.

It will stretch across several decks and be powered with the assistance of three giant
masts. Those sails mean it will not sport a helipad - instead, in a twist worthy of the
wealthiest Bond villain, sources say it comes with its own yacht.

Bezos and partner, Lauren Sanchez, a helicopter pilot, have commissioned a separate
support vessel with a dedicated landing facility.

The luxury yacht sector has thrived through the pandemic as the global elite invest
in ever more extravagant boats to avoid the crowds in opulence and privacy. Bezos
is understood to have put the order in before the virus hit, having spent time on Eos
- another three-masted schooner - owned by film and Fox TV mogul Barry Diller and
his wife Diane Von Furstenberg, the celebrated fashion designer, in 2019.
55 | M&A NEWS J u n e 2 0 21
 Luxurious inside, image by Oceanco

He was later pictured on board David Geffen’s yacht in the Balaerics, alongside model
Karlie Kloss, Josh Kushner and former Goldman Sachs CEO Lloyd Blankfein.

Bezos is not short of a few bob, and filings with the Securities and Exchange
Commission suggest he added to his vast fortune with the sale of nearly $2 billion
worth of shares in his company last week.

That came after Amazon reported blockbuster first-quarter earnings results,

trouncing Wall Street’s expectations, and took his total disposals to around $10bn in
a year. He had previously outlined proposals to sell around $1bn in Amazon stock
each year to fund his space exploration company, Blue Origin, which intends to
launch its first astronaut crew to space this summer.

In his forthcoming book on Bezos, Amazon Unbound, Bloomberg journalist Brad

Stone discloses further details of the ship, which is also likely to play a central role
in Bezos’s life as he steps back from running the online behemoth he created. He
writes: “What did the future hold for their founder? At least part of the answer to
that could be found in the shipyards of the Dutch custom yacht builder Oceanco.

“There, outside Rotterdam, a new creation was secretly taking shape: a 127-meter-
long, three-mast schooner about which practically nothing was known, even in the
whispering confines of luxury boat builders—except that upon completion, it will be
one of the finest sailing yachts in existence.” Source: Evening Standard

56 | M&A NEWS J u n e 2 0 21
United States

10 celebrities who created

their own alcohol
Being an A-list celebrity means being able to pursue passions
outside the industry. From gin to wine, these 10 stars are all
about their boozy brands.

The beauty of being a celebrity in the public eye is the opportunities that come their
way. Although they can afford everything under the sun, brands send them free gear
all the time for the exposure.

Celebs also have the financial support to launch various projects that they're
passionate about outside of industry work.

For these 10 celebs, that passion was alcohol. From wine to vodka, these celebrities
found themselves entrenched in the adult beverage industry and are doing
exceptionally well because of it.

If anything ever happened to their day jobs, these celebs have their alcohol brands
to fall back on.

57 | M&A NEWS J u n e 2 0 21
10
Brad Pit & Angelina Jolie: Miraval Rosé
Back when Brad Pitt and
Angelina Jolie were marri-
ed and happy, the couple
ventured into the wine
industry together. Called
Miraval, the grapes are
grown in the Côtes de
Provence region of
France. The lush rosé has
stood the test of time and
continues to be a sought-
after wine in different
parts of the world. Now divorced, Pitt and Jolie have help from the Perrins, a well-
known family prominent in creating exceptional wine, who now owns half the
company. Rosé (and Pitt and Jolie) fans can snag a bottle for around$17.99.

9
Shay Mitchell: Onda
Onda is a relatively new
project that actress Shay
Mitchell is diving into but
it's projected to make a
splash.

The brand will essentially

be cocktails in a can that
were inspired by
Mitchell's favorite drinks:
"A lime margarita and
grapefruit paloma."

The 12oz. cans will have simple ingredients and come in two flavors. Each can is 100
calories with 5% alcohol and runs $39 for a pack of eight cans.

Mitchell is still working on Onda, specifically looking for the perfect tequila for the
brand.

58 | M&A NEWS J u n e 2 0 21
8
George Clooney: Casamigos Tequila
George Clooney and Rande
Gerber's Casamigos has to
be one of the most well-
known, celebrity-created
alcoholic drinks out there.
Funny enough, the billion-
dollar brand was created by
"accident," according to
Business Insider. Clooney
and Gerber have such an
adoration for tequila that
they decided to make their
own just for "fun," for friends and family. It took two years but the buddies finally
found the perfect recipe. It was such a hit that they were creating too many bottles,
forcing them to get licensed to sell their tequila legally. It became such a hit that
Diageo bought the company for $1 billion in 2017.

7
The Bella Twins: Belle Radici
Former WWE superstars
Brie and Nikki Bella's love of
wine inspired them to
create their own brand,
Belle Radici. Meaning
"beautiful roots" in Italian,
the sisters created the wine
with friends.

For those who watched

Total Bellas, the twins spent
much of their time learning
about different wines and what they were looking for in their own. Belle Radici has
both white and red wine, sold for around $23.99 a bottle.

59 | M&A NEWS J u n e 2 0 21
6
Tituss Burgess: PBTB Wine
Unbreakable Kimmy
Schmidt gave fans the
legend that is Tituss
Burgess. In the show,
character Titus sang a song
about pinot noir. Well, the
hilarious tune became such
a hit that Burgess decided
to go along with his
character and create his
own wine. PBTB stands for
Pinot By Tituss Burgess.
After the success of his pinot noir, he went on to release wines that supported the
LGBTQ+ communities called Pride Pinot Noir and a rosé that supported GLAAD.

5
Giuliana Rancic: XO, G
Giuliana Rancic was once
the face of E! News. She
started working with E! in
2002 and climbed her way
to the top until leaving her
co-host job in 2015.

Although she found her

way back to E! a few years
later, Giuliana launched
other projects in her spare
time, including her own
wine label. Titled Xo, G, her wine comes in a package of four individual wine glasses
to be sipped and shared. They're incredibly convenient and easily transportable. Xo,
G comes in rosé, sparkling, red, and white.

60 | M&A NEWS J u n e 2 0 21
4
Ryan Reynolds: Aviation Gin
Ryan Reynolds isn't just a
pretty face on the big
screen, he also ventured
into the world of gin.
Unlike other celebrities on
this list, Reynolds didn't
create Aviation, but he
loved it so much when he
sampled it that he bought
a stake in the brand and
became a "significant
owner," according to
Forbes. Thanks to his celebrity, he's now the face of Aviation and claims it's the "best
on the planet."

3
Mindy Kaling: Barefoot Boxed Wine
Mindy Kaling fans fell in love
with her on The Office but
found her relatable AF on
The Mindy Project. She was
always drinking wine on the
couch in her cutest
pajamas, thinking out loud
and feared she was missing
out on a social life...

As it turns out, it wasn't just

fans who found her
relatable — mega wine brand Barefoot who did too. Mindy and Barefoot teamed up
for Barefoot On Tap, a miniature boxed wine that can be easily transported anywhere
you go. Kaling also created miniature handhelds so that Barefoot can fit in your
purse!

61 | M&A NEWS J u n e 2 0 21
2
Danny DeVito: Premium Limoncello
Actor Danny DeVito has
seen and done it all in
Hollywood, but now he's
venturing into the adult
beverage world, creating
his own brand of limon-
cello.

DeVito keeps the Italian

beverage close to home
by only using lemons from
Sorrento. It's simple,
bright, but very strong as it's 60 proof. Limoncello is typically served as an after-
dinner drink over ice and DeVito's can be purchased for around $25.

1
50 Cent: EFFEN Vodka

In 2014, 50 Cent joined forces with EFFEN Vodka and is still working with them
today. According to EFFEN's website, its smooth texture is thanks to French wheat.
It's sold in a variety of flavors with 50 Cent as the face of the brand. Source: The Things
62 | M&A NEWS J u n e 2 0 21
63 | M&A NEWS J u n e 2 0 21
Asia

Tech M&A in Asia at record high,

main deal driver in the region
Mergers and acquisitions targeting
technology companies have hit a
record high in Asia Pacific, Dealogic
data shows, and dealmakers expect
this M&A pace to continue as the
pandemic spurs a shift toward
virtual activities in the economy.
Hong Kong, May 27, 2021 - Tech M&A has totalled US$136.2 billion in 2020, more
than double the year-ago levels, according to data provider Dealogic. Tech deals
accounted for 28 percent of the regions' overall M&A transactions, which totalled
US$482.4 billion as of Wednesday, the highest share in at least a decade, the data
shows.

This boom "is a result of technology changing the way our economy works", said
Jung Min, co-head of M&A and Technology, Media and Telecom at Goldman Sachs
in Asia (ex-Japan).

"For a consumer, it affects how you shop, pay, eat, move and entertain. For a
business, it affects how you recruit top employees, source your supply chain,
manufacture and, of course, sell to customers," he added.

For businesses to ensure they have the required scale to win in this environment,
M&A is "transformational", he said. Corporate executives are also bullish on the
sector, a survey by law firm Baker McKenzie shows.

64 | M&A NEWS J u n e 2 0 21
The survey of 800 senior executives in Asia Pacific shows over three quarters of the
respondents predicting tech deals would increase markedly in the next 12 months.

In the survey, conducted in the first quarter and published on Thursday, 92 percent
said technology, media and telecoms companies would drive their own deal activity,
while 57 percent said they would acquire new technology and associated expertise.

"This signals major consolidation across the tech sector, as fast growth companies
snap up rival firms and complementary platforms, and move into new markets," the
report said.

In April, Grab Holdings, the largest ride-hailing and food delivery firm in Southeast
Asia, went public in the world's biggest US$40 billion merger with a special purpose
acquisition company.

Grab's rival Gojek and e-commerce leader Tokopedia have also announced a merger
to create a multi-billion-dollar tech company in Indonesia's largest-ever deal.

A Go-Jek driver rides a motorcycle on a street in Jakarta, Indonesia, Dec. 15, 2017.
Reuters /Beawiharta/File Photo/File Photo

Mega deals in the pipeline also include a possible take-private of Japan's Toshiba
Corp. Toshiba has hired UBS to advise on a strategic review, amid calls from
shareholders to explicitly seek offers from potential suitors after it dismissed a US$20
billion take-private bid from CVC Capital this year. Source: Reuters

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Asia

Celebrating excellence
Winners: FinanceAsia's Country Awards
2021, Part 1
Today, we unveil the winners from Bangladesh, CLM (Cambodia,
Laos, Myanmar), China and Hong Kong.

Hong Kong, May 25, 2021 - It's been a quarter of a century since FinanceAsia was
established. In the years since then, there have been a number of seismic shifts in
Asia's financial markets that have been reflected in our Country Awards for the best
banks, brokers and law firms across the region.

FinanceAsia's early years were dominated by tycoon-driven excesses and currency

mismatches, setting the stage for the Asian Financial Crisis. This prompted root-and-
branch reform of the banking industry right across the region, providing the
foundations for the exponential growth we've witnessed over the past two decades.
In recent years, new financing models and home-grown regional players have
started to become the order of the day. The region's wealth generation is giving
these national champions the financial firepower to compete against and, in some

66 | M&A NEWS J u n e 2 0 21
instances, start to overshadow long-established international players. Over the past
year, two other new trends have started to make themselves felt in these awards as
well.

Firstly, environmental, social and governance (ESG) factors have become an

essential topic of conversation. During the awards pitching process, it was impressive
and inspiring to hear what banks are doing to improve their own carbon footprint
and help companies transition to cleaner forms of energy, better governance, and
societal well-being.

Secondly, Covid-19 has accelerated the entry of retail investors into many of the
region's equity markets, facilitated by advancing digitalisation. 'Mom and pop'
investors have been the saviour of many of the region's brokers during the past year.
For the second year running, FinanceAsia's Country Awards have taken place against
the backdrop of a raging pandemic. Asia's banking industry has performed
remarkably well, supporting clients in tandem with government schemes and taking
a conservative stance on provisioning. Some of this year's winners have had a record
year and there has been a roster of sizeable and significant equity, debt, and M&A
deals. We would like to congratulate all the winners and to extend a special thanks
to the editorial advisory board who helped us to pick them. They are:

Glenn Kim - Principal Investable Oceans; chair Financial Services Capital; advisory
board Fluency; former senior advisor to Deutschland Finanzagentur, Iceland Ministry
of Finance, Greece Ministry of Finance, plus head of public sector and emerging
markets EMEA and Asia and Japan DCM Lehman Brothers.

Terry Mahony - deputy chairman VinaCapital; former CIO emerging markets equities
TCW and Indochina Capital, plus launch CIO of HSBC's GEM fund.

David Morton - advisor Helsinki Foundation Asia Pacific and chairman Yojee; former
Asia Pacific head of corporate, financials and multinationals banking HSBC.

Sangeeta Venkatesan - chairman FairVine Super; chief executive Applegrove Capital;

board member WiBF; former chief operating officer Commonwealth Bank of Australia
and Nomura.

Susan Yuen - non-executive director Alliance Bank Malaysia; former regional CEO
NBAD and CEO ANZ Hong Kong, plus head of corporate and institutional banking
HSBC Malaysia and head of multinationals banking Maybank. Sadly, the pandemic
means there will not be an awards dinner again this year. However, plaques will still
be available and, where possible, we would be more than happy to arrange individual
ceremonies to present the awards.

67 | M&A NEWS J u n e 2 0 21
In Part 1, we are delighted to unveil the winners from Bangladesh, China, Hong Kong
and CLM (Cambodia, Laos, Myanmar).

Full write-ups explaining the rationale behind each choice will be published online as
well as in the summer edition of FinanceAsia magazine.

Bangladesh
Domestic
Best Bank: The City Bank
Best Investment Bank: IDLC Investments
International
Best International Bank: Standard Chartered
Best International Investment Bank: HSBC

China
Domestic
Best Bank: ICBC
Best Investment Bank: CICC
Best ECM House: CICC
Best DCM House: Citic Securities
Best Broker: CICC
Best Private Bank: CMB Private Banking
Best Law Firm: Han Kun
Best Domestic Rating Agency: China Lianhe Credit Rating Company
International
Best International Bank: HSBC
Best International Investment Bank: Goldman Sachs
Best offshore rating agency: Fitch Ratings

Hong Kong
Domestic
Best Bank: HSBC
Best Sustainable Bank: HSBC
Best Investment Bank: HSBC
Best ECM House: HSBC
Best DCM House: HSBC
Best Broker: HSBC
Best Private Bank: HSBC
Best Law Firm: King & Wood Mallesons
International
Best Interntional Bank: Citi
Best International Investment Bank: Morgan Stanley

68 | M&A NEWS J u n e 2 0 21
Hong Kong
Chinese Financial Institutions
Best Bank: Bank of China (Hong Kong)
Best Investment Bank: CICC
Best ECM House: Citic CLSA
Best DCM House: BOCI
Best Broker: Haitong International
Best Private Bank: CMB Private Banking
Best Offshore Rating Agency: Lianhe Ratings Global

CLM (Cambodia, Laos, Myanmar)

Best Bank: ACLEDA Bank
Best Investment Bank: Yuanta Securities Source: FinanceAsia

China

Behind TikTok is a Chinese tech giant

fueling the world’s hottest app
The TikTok Story goes inside the Beijing parent company
Beijing, May 22, 2021 – TikTok is powered by sophisti-
cated artificial intelligence that predicts what people
want to see next. The app goes beyond even the
systems used by Facebook Inc. or Snapchat.

Zhang Yiming, founder of ByteDance at HQs in Beijing.

Photographer: Giulia Marchi/Bloomberg

TikTok studies usage closely and considers hundreds of data points including what
websites you’re browsing and how you type, down to keystroke rhythms and
patterns. The algorithms were developed at ByteDance Ltd., TikTok’s Chinese parent
company and the most valuable startup in the world.

In episode two of Foundering: The TikTok Story, we look at how ByteDance founder
and Chief Executive Officer Zhang Yiming fundamentally changed how a generation
consumes media on their phones. Zhang started his company in a small Beijing
apartment and used American venture capital money to buy up startups and music
rights in the U.S. In his first-ever interview with Western media, he revealed his
unique management style. “Unlimited salary for unlimited talent,” Zhang told
Bloomberg in 2017. Source: Bloomberg
69 | M&A NEWS J u n e 2 0 21
China

Infrastructure investment will play a key

role in China’s economic recovery
In the wake of the coronavirus pandemic, many governments globally are looking at
infrastructure investment as a key driver of economic growth in coming years. While
China’s economy has recovered relatively well compared to other nations, the
government is once again looking at infrastructure investment as a pillar for
economic growth.

Shanghai

Historically, the Chinese government has relied on infrastructure investment to

reverse economic downturns, such as the landmark RMB4 trillion fiscal stimulus that
followed the 2008-09 global financial crisis. This changed around 2015, when
government policy shifted towards consumption and services as drivers of economic
growth. Last month, the government further refined its economic strategy by
introducing its “dual circulation” economic growth model, which aims to promote
domestic supply and demand. To this end, the government is seeking to boost
household income and strengthen the social safety net as part of its effort to boost
consumption, and to upgrade manufacturing industries and develop advanced
technologies to increase self-reliance on domestic supply.

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 Figure 1: Infrastructure investment is a key component in China’s fixed asset investment
Source: China’s National Bureau of Statistics, WIND and Moody’s Investors Service

Investment will focus on developing “new infrastructure” – such as informational

networks, urbanization and major transportation and water conservancy projects –
while traditional infrastructure projects will continue to drive infrastructure spending,
given their very large scale, capital intensity, and ambitious development targets.

Nearly all of China’s 31 provinces, municipalities and autonomous regions have

announced key infrastructure investment plans for the next 5-7 years, covering
24,515 projects at RMB43 trillion, of which around 25% will be spent on
transportation projects.

Figure 2: Infrastructure investment growth will accelerate after coronavirus hit.

Note: Infrastructure investment growth measured by cumulative growth of fixed asset investment.
Source: WIND and Moody’s Investors Service

Government stimulus will support infrastructure investment

The central government has so far shown its support for regional and local
governments in this challenge. It plans to transfer RMB2 trillion in funding directly to
local governments to support economic recovery and has increased its quota for
special purpose bonds – used to fund infrastructure investment – by RMB1.6 trillion

71 | M&A NEWS J u n e 2 0 21
to RMB3.75 trillion. It is also allowing local governments to use bond proceeds as
seed capital for significant revenue-generating infrastructure projects, lifting an
earlier restriction, and has introduced infrastructure real estate investment trusts
(REITs) as a new funding channel. Infrastructure companies will be able to sell their
projects to these REITs, shortening the payback period for long-dated infrastructure
assets.

Building on experience gained from the global financial crisis, the central government
is likely to be more cautious this time around in expanding credit to support the
economic recovery. The total direct fiscal response package announced in May this
year is equivalent to 4.5% of GDP or RMB1.3 trillion, according to the IMF Policy
Tracker. This is modest compared with the stimulus package that followed the global
financial crisis, when public investment in infrastructure and property construction
accounted for over 10% of GDP, or about 87% of its RMB4 trillion stimulus package
at the time.

Transportation will drive infrastructure investment

Moody’s expects that infrastructure investment will focus on the transport sector
over the next 3-5 years, driven by increasing passenger numbers and freight
demand, as well as rapid urbanization, which the government aims to increase to
70%-75% by 2035, up from 61% in 2019.

Figure 3: Expanding transportation network – high-speed rail, railway and highway (by length). Source:
WIND and Moody’s Investors Service

Moody’s expects that transportation investment will be focused on new railways in

central and western regions, along with the ongoing expansion of high-speed rail,
road and metro networks. This is consistent with the national ‘Outline of building
China’s strength in transportation plan’ and corresponding development plans
announced by various provincial governments.

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Strengthening the transportation network is also essential to facilitating strategic
regional development plans, such as in Beijing-Tianjin-Hebei and the Guangdong-
Hong Kong-Macau Greater Bay Area.

Green energy will also remain a key focus for the power sector, although investment
growth is likely to slow post-2020 as the country approaches wind and solar grid
parity in 2021. Coal-fired capacity additions are also likely to slow under China’s
carbon neutral strategy.

Policy-driven investment in the water utility sector will continue to focus on flood
control, water conservation and water projects in poor areas, and national strategic
projects.

Investment by gas utilities will focus on the consolidation and expansion of the
national and regional distribution pipeline, as well as on LNG receiving terminals and
storage facilities as they will increase the diversification of gas supply.

Future investment for the port sector will focus mainly on connectivity between the
ports and surrounding railways and highways, smart ports that leverage disruptive
technology and automation, and strategic regional integration and industry
consolidation.

Infrastructure companies are likely to maintain high debt leverage

Most infrastructure companies will likely maintain high debt leverage – as measured
by the ratio of funds from operation to debt – due to their sizable capital spending
to support government development plans.

Nonetheless, a sustained recovery is underway for the sector, and Moody’s expects
most infrastructure companies’ liquidity and debt servicing requirements will remain
broadly manageable thanks to government subsidies and capital injections.
Moreover, most are state-owned entities, underpinning their strong market positions,
low funding costs and ample funding access.

Conclusion

While its economy appears not as severely hit by the coronavirus, China is looking
at infrastructure spending to support economic recovery. This will include new and
traditional infrastructure, underpinning a healthy new project pipeline along with
continued high leverage for companies carrying out the work.

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 Ivy Poon (left), Vice President – Senior Analyst
Qingqing Guo (right), Assistant Vice President – Analyst

Ivy and Qingqing are analysts in Moody’s Public

Project & Infrastructure Finance Group, based
in Hong Kong and Shanghai. They cover a
range of state-owned and privately-owned
infrastructure and utility companies in China.
Source: FinanceAsia/Moody’s

India

Stage set for Indian small biz

to build global brands
As work from home became the new normal due to the Covid-19
pandemic, Broussard said thousands of our e-commerce sellers
from India played a key role in serving customers globally during
this period.
Mumbai, May 26, 2021 - There is a huge opportunity to create global brands from
India. Customers across the world are buying from businesses around the globe and
this presents a tremendous opportunity to businesses in India, said Eric Broussard,
Vice President, international marketplaces and retail, Amazon.

E-commerce brings this opportunity closer to businesses irrespective of their size. It

enables a level playing field and keeps the sellers and the entrepreneurs in charge
of their inventory, the markets they want to sell in and work to create a global brand
for themselves. With Amazon Global Selling,
Broussard said Indian exporters can today list
their products on 17 international marketplaces
or websites of Amazon. They can get access to
150 million paid Prime members and over 300
million customers in 200 countries and territories
across the world.

Indian Small-businesses Remain Resilient Amidst COVID-19

Economic Impact

74 | M&A NEWS J u n e 2 0 21
“The way I see it, there is a huge opportunity to create global brands from India,”
said Broussard at Amazon’s flagship event Smbhav. “Already we have some great
examples of Indian businesses starting from scratch and building successful global
brands with customers across the world.”

Eric Broussard, Vice President,

international marketplaces and retail,
Amazon

For instance, Vahdam Teas which is not

just a successful business on Amazon
globally but has featured in Oprah
Winfrey’s favourite things a couple of
years ago, according to Broussard. Also,
Wow Shampoo has become one of the
most popular shampoo brands on
Amazon in the US.

Almost 60 percent of the physical products sold on Amazon globally now come from
independent Sellers—not Amazon. Sellers’ sales have grown twice as fast as our own
retail sales since they first started on Amazon.

75 | M&A NEWS J u n e 2 0 21
During the 2020 Holiday shopping season, more than 71,000 small and medium-
sized businesses worldwide surpassed $100,000 in sales. And Indian businesses on
Amazon Global Selling saw a 50 percent growth in business year on year during the
Black Friday and Cyber Monday sale.

As ‘stay at home’ and ‘work from home’ became the new normal due to the
coronavirus pandemic, Broussard said thousands of our e-commerce sellers from
India played a key role in serving customers globally during this period.

In this changing world, the pace of technology adoption has accelerated. There has
been a structural shift in online shopping behaviour. More customers are coming
online for their shopping needs in the US, Europe, India, and all over the world. This
has also meant that more businesses are relying on technology to connect with
customers online and grow their business.

“The pandemic has shown us the power of and potential of technology for
businesses, as well as for life in general,” said Broussard. “Our commitment to
supporting small and medium-sized businesses has never been more steadfast.
Today, we have more than 70,000 businesses in India (which) were part of the
Amazon global selling programme and are selling to customers across the world.
Amazon is helping boost exports from India with this programme.”

With each country looking to increase its share in global exports and international
trade and exports are an important factor in boosting domestic economies.

They are also important in generating employment, enabling a greater choice of

products for customers and providing larger markets for growing companies. Amazon
has pledged to enable $10 billion in exports from India by 2025.

“This sets the stage for millions of Indian small businesses to cater to the global
customers and build global brands from India,” said Broussard.

Amazon Global selling helps customers across the world shop locally for global
products. On the seller side, global selling enables businesses of all sizes to sell to
customers across the world, leveraging Amazon’s investments in technology and
infrastructure.

“You could have a customer in New York City, Berlin, Tokyo, Dubai (to buy)
bedsheets from a seller in Delhi or Mumbai through Amazon.com or Amazon.co.uk
or Amazon.co.jp. They can get the product delivered to their address in one to two
days, pay in local currency; while the seller in India gets the money in Indian rupees
in their bank account,” said Broussard.

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 For instance, Mumbai-based Jack in the Box (pictured left) is
redefining creativity toys for kids. It started on Amazon global
selling programme in 2017 and has been growing 2X year-
over-year. It is now selling to customers in 15 countries,
including the US, Canada, Germany, and the Middle East. In
the last four years, it has grown to be one of the top craft toy
brands in the world, from Mumbai.

Also, businesses are using FBA (fulfilment by Amazon) to

make their products Prime eligible. Amazon’s Prime
programme enables customers to get unlimited free shipping
on a wide array of products. Amazon is investing in growing the Prime program
across the world. This helps the flywheel spin faster for customers and sellers.

For instance, Vaibhav Aggarwal from Lucknow who runs a health and personal care
business called Wonder Care and sells products like lung exerciser and hernia belts.
Wonder Care has relied on FBA to expand their exports business and today caters to
customers across North America, Europe, APAC (Asia Pacific) and Australia.

“We have been focused on making every aspect of selling globally simpler for our
sellers. For example, a seller from India doesn’t need to know Japanese to list her
products on Amazon.co.jp,” said Broussard.

For this Amazon has a solution called Build International Listings (BIL) which helps
the sellers in listing their products across all marketplaces. The solution translates
the content into international languages such as German, Japanese, and French,
making the process easier.

Broussard also said the Government of India is making efforts to create an

encouraging environment for helping small and medium businesses to be part of e-
commerce exports and contribute to a much stronger economy.

He said Amazon's teams in India are working with industry players, state and central
governments and other partners to create a conducive ecosystem to lower the entry
barrier for Indian businesses to start or expand their exports business.

“The host of initiatives from the Government to strengthen manufacturing, nurture

entrepreneurship and promote digital enablement are playing a key role in
supporting the development of global businesses,” said Broussard. “This puts India
in a great position to expand further and build global Indian brands.” Source: Business
Standard

77 | M&A NEWS J u n e 2 0 21
Hong Kong

Old-school tycoons who made Hong Kong

are losing to China’s rich
Mainland moguls added three times more wealth in five years.
Changes underscore fading relevance of city’s conglomerates.

Li Ka-shing Hong Kong’s richest man is losing friends in China and the West.

New York, May 25, 2021 - The prediction was vintage Jack Ma, as provocative as it
was prescient. “This is the era of the internet,” the Chinese billionaire proclaimed in
October 2013, just weeks after his plan to take Alibaba Group Holding Ltd. public in
Hong Kong had been scuttled by regulators. “It no longer belongs to Li Ka-shing.”

Ma’s dig at the famed Hong Kong tycoon raised plenty of eyebrows at the time, but
few would disagree with him now. The past few years have seen a remarkable shift
in fortunes between China’s tech-savvy moguls and their old-school Hong Kong
counterparts -- a trend that shows few signs of fading any time soon.

78 | M&A NEWS J u n e 2 0 21
Even as Xi Jinping’s government moves to curb the clout of Ma and some of his
peers, the combined wealth of China’s 10 richest people has surged threefold since
2016 to $425 billion, according to the Bloomberg Billionaires Index. For Hong Kong,
it doubled to $218 billion during the same period. Li, once Asia’s richest person, is
now ranked No. 12, several spots below Ma, who eventually listed Alibaba in New
York in 2014.

The changes underscore the fading relevance of Hong Kong businessmen who built
their empires on real estate, ports, infrastructure, telecommunications, aviation, and
retail.

At their peak, when the former British colony was the indispensable gateway to a
rapidly developing mainland China, Li and his peers were courted by Beijing for their
business acumen and access to overseas capital. These days their political clout is
waning, and their businesses are increasingly viewed by investors as stale.

What’s more, Hong Kong’s future as a financial hub is facing an existential threat as
China’s Communist Party chips away at the “one country, two systems” framework
that has underpinned the city’s success for decades.

One consequence has been a dramatic

slide in the stock-market valuations for
Hong Kong’s biggest conglomerates. Over
the past five years, five of the city’s top
groups -- CK Hutchison Holdings Ltd., New
World Development Co., Henderson Land
Development Co., Sun Hung Kai
Properties Ltd. and Wharf Holdings Ltd. --
have consistently traded at deep discounts
to their net assets.
Hong Kong Stock Exchange

Their shares now fetch just 0.5 times book value on average, versus 10 for the five
companies controlled by some of China’s richest tycoons, data compiled by
Bloomberg show.

“The main businesses of the large Hong Kong companies don’t have much growth,”
said Andy Wong, founding partner at LW Asset Management in the city. “Investors
prefer to focus on growth more than on a company’s value,” he said, adding
technology-driven sectors are attractive, especially after the pandemic.

While private family offices of some of the city’s tycoons have pivoted to high-growth
investments, their listed businesses have been slow to catch up.
79 | M&A NEWS J u n e 2 0 21
Their counterparts across the border have leveraged technology to provide a range
of consumer services and create wealth. Chinese tycoons have also benefited from
the $14.3 trillion economy’s quick recovery from the Covid outbreak. China was the
only major economy to expand last year, while Hong Kong saw back-to-back
recessions in 2019 and 2020.

Most of China’s richest billionaires come from the tech industry, including Tencent
Holdings Ltd.’s Pony Ma, Bytedance Ltd. founder Zhang Yiming and NetEase Inc.’s
William Ding. The wealth of Zhong
Shanshan, China’s current richest person
and founder of bottled water giant Nongfu
Spring Co. is almost $69 billion, more than
double that of Li’s.

Zhong Shanshan

Many of Hong Kong’s business empires owe their success to government policies
that encouraged only a small group of deep-pocketed developers to bid at auctions
of land parcels, a system that turned Hong Kong into the world’s most expensive
property market. The windfall from rising prices allowed the tycoons to diversify into
utilities, retail, ports and infrastructure.

But that formula has been difficult to replicate in larger markets like mainland China
due to high capital requirements, local competition and regulatory barriers, said
Richard Harris, founder of Hong Kong-based Port Shelter Investment Management.

The result is that many of the city’s tycoons have focused on defending their current
turf rather than expanding into new businesses, Harris said. “Many of them are quite
happy making sure they don’t lose” what they have, he said.
Yet even that has proven difficult in recent years as Hong Kong’s economy was
battered by anti-government protests and the pandemic.

Sun Hung Kai Properties, the developer led by billionaire brothers Raymond and
Thomas Kwok, reported the biggest decline in underlying profit since 2013 for the
year ended June. Swire Pacific Ltd., one of city’s two centuries-old British trading
firms, recorded an underlying loss last year, the first since listing in 1959. Its flagship
Cathay Pacific Airways Ltd. is struggling despite a government-led rescue.

Some of Hong Kong’s conglomerates have started looking further afield for growth
opportunities. New World Development Co., which is into infrastructure building,
hotels and shopping malls, is accelerating its expansion into insurance, health care
and education in mainland China. Chief Executive Officer Adrian Cheng has said he

80 | M&A NEWS J u n e 2 0 21
wants to grow the non-property service businesses. Much of the effort “revolves
around non-traditional businesses,” a spokeswoman said. Swire Pacific is investing
in health-care groups in mainland China. Jardine Matheson Holdings Ltd., the owner
of luxury hotel group Mandarin Oriental International Ltd., is partnering with private
equity firm Hillhouse Capital Management Ltd. to look for investment opportunities
in Greater China and Southeast Asia.

Representatives for Sun Hung Kai declined to comment, while CK group and Wharf
didn’t respond to requests for comment. Swire said the group’s financial strength
and ability to invest remain strong and is looking at new sectors. Henderson Land
said it’s been diversifying from property, with a strong presence in Hong Kong and
China, and has been incorporating sustainable technologies.

CK group, which Li built after his family fled to Hong Kong from the mainland as
refugees in 1940, is the most diversified among them. Li’s personal investment
vehicle, Horizons Ventures, has been investing in plant-based food, renewable
energy, and digital services. The firm’s early bet in Zoom Video Communications Inc.
surged to $11 billion last year during the pandemic, or one-third of Li’s wealth. He
was also an early backer of Facebook Inc., Spotify Technology SA and Siri. The post-
pandemic recovery will be crucial time for Hong Kong’s tycoons to consider similar
bets on emerging industries, according to Falcon Chan, a partner at Deloitte China.

“It’s critical to think about what’s the next big bet,” Chan said. “What some of these
big guys do in the next one or two years will have a tremendous impact if they want
to pivot.” Source: Bloomberg, Li Ka-shing, Photographer: Anthony Kwan/Bloomberg

India

Holtec buys Indian Point Energy Center

May 28, 2021 - A Holtec International subsidiary the subsidiaries that own Indian
Point Energy Center from Entergy Corp. Holtec plans to complete major
decommissioning activities at the site.

“We thank all our employees at Indian Point for operating a safe, secure and reliable
plant for more than 20 years under Entergy’s ownership, and we look forward to
many of them continuing on with Entergy at new locations,” said Entergy chairman
and CEO Leo Denault. “With our previously announced agreement for the post-
shutdown sale of Palisades nuclear power plant in 2022, we remain on track to
complete our exit from nuclear power operations in merchant markets.”

81 | M&A NEWS J u n e 2 0 21
 “Protecting public health and safety and the
environment is the foundation upon which the
Indian Point decommissioning program will be
carried out,” said Holtec’s president and CEO Kris
Singh.

Dr Kris Sing
President Holtech

“The cutting-edge technologies that we have employed at Pilgrim and Oyster Creek
to ensure maximum worker and environmental safety and wellbeing of the local
communities will be employed at Indian Point to secure the same excellent outcomes
that we continue to achieve at other plants in our fleet. We are committed to a
continuous engagement with the stakeholders at the local and state levels to ensure
a smooth dissemination of information at all times.” Source: Mergers&Acquisitions

Australia / United States

Pendal Group acquires US investment

management company
Sydney, May 17, 2021 – Australian Pendal Group Limited acquired US-headquartered
investment management and advisory company.

Deal: Pendal Group Limited has acquired Thompson, Siegel & Walmsley LLC (TSW)
and has been advised on an associated capital raise. Value: The transaction was
funded by an $190 million placement of new shares to institutional investors and a
five-year $200 million debt facility, as per a statement provided by the lawyers.

Key players: The A&O Legal Team was led by M&A partners Stephen Besen and
Michael Parshall in the New York and Sydney offices, respectively. The team also
included New York associates Loren Thomas, Lucy Cai and Nkem Anene and on the
equity raise Australian associates Isobel Smith, Ashton Pyke and Michelle Huo.

“U.S. securities law advice was provided by Sydney ICM partner Mark Leemen and
associate Edward Ren. Sydney partner Adam Stapledon and senior associate William
Kim advised on the acquisition financing. U.S. tax advice was provided by New York
partner Dave Lewis, senior counsel Caroline Lapidus, and associates John Hibbard
and Lauren Diner,” the statement said.

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 Vilmar Gor, head of Fixed Income
and Defensive Strategies at Pendal Group

“New York partner Brian Jebb and associate Zoe

Wachter advised on employment and benefits
matters. Washington, D.C. partner Chris Salter, New
York senior counsel Kuang Chiang and associate
Pierce Young provided regulatory advice. Partner
Elaine Johnston and associate Puja Patel advised on
antitrust. Real estate advice was provided by partner
Adam Sofen and associate Natasha Robbins.

Partner Keren Livneh and associates Natalie Montano Young and Kyle Coogan
advised on transactional IP matters.”

Deal significance: Pendal Group Limited is an independent global investment

manager with $101.7 billion in funds under management. The company’s acquisition
of TSW will substantially increase Pendal’s presence as a global investment manager,
particularly in the US market, A&O said.

“Pendal’s acquisition of TSW strategically positions Pendal’s U.S. business to drive

growth in the world’s leading equity market. This transaction follows Pendal’s
longstanding expansion efforts through both organic and inorganic growth, including
its acquisition of UK based manager J.O. Hambro Capital Management in 2011, which
A&O advised on,” the statement said.

Commenting further, New York M&A partner Mr Besen said: “This deal is evidence
of the continuing trend of consolidation in the investment management industry.
A&O’s work with Pendal on this transaction highlights A&O’s expertise in advising on
complex cross-border acquisitions in the investment management industry.”

Mr Parshall, partner in A&O’s Sydney office added: “A&O’s Sydney and New York
offices worked together seamlessly across practice areas to leverage our local
expertise on a global scale, allowing us to integrate the acquisition work of our New
York team with the corporate and debt work of our Sydney teams”.

“Whether in the U.S. or the UK and Europe (with the J.O. Hambro acquisition) we
are pleased to have continued matching our leading global network to Pendal’s
growth initiatives as part of its transition to being a truly global investment
management platform,” he said. Source: LawyersWeekly

83 | M&A NEWS J u n e 2 0 21
2021 kicks off with a wave of new
Mergers and Acquisitions in the Middle
East

Bahrain’s Arab Banking Corporation is 59.37% owned by the Central Bank of Libya while Kuwait
Investment Authority holds a 29.69% stake. Image by TK Kurikawa / Shutterstock.com

Dubai, May 23, 2021 - Following a mostly muted business year due to the outbreak
of COVID-19 and a plunge in oil prices, 2021 kicked off with a wave of deal-making
as companies position themselves for improved economic conditions post-pandemic
era amid vaccine optimism.

84 | M&A NEWS J u n e 2 0 21
Mergers and acquisitions (M&A) activity in the Middle East had a robust start this
year with over four new mega-deals closed in January alone after 2020 closed on a
high note with a surge in deal-making in Saudi Arabia and the UAE, including the tie-
up between National Commercial Bank and Samba Financial Group into Saudi
National Bank, a mega-bank with around $239 billion (SAR 896 billion) in assets.

According to EY, the increasing trend for alternative deal models – such as joint
ventures, alliances, and divestments – are expected to drive M&A in the GCC region.
Here are the seven deals that closed in the first quarter of 2021 in the Middle East.

First Abu Dhabi Bank

- Bank Audi Egypt
Deal value: Unknown
Sector: Banking
Image by Jeff Kingma /
Shutterstock.com

First Abu Dhabi Bank

(FAB) said that it had
agreed to acquire the
Egyptian unit of
Lebanon’s Bank Audi in
January. The deal,
which will be FAB’s first
international acquisition,
is expected to be closed
within the next few months, subject to regulatory approvals in the UAE and Egypt.

The two lenders suspended talks last May due to difficult market conditions amid the
impact of the pandemic on the economy.

The acquisition of Bank Audi Egypt is expected to increase FAB’s operations in Egypt,
making it one of the biggest foreign lenders with assets of more than $8.1 billion.

Ranked third on Forbes Middle East’s Top 100 Companies 2020 list, FAB had total
assets of $250 billion (AED 919 billion) in 2020 and has a market cap of $43 billion
(AED 159 billion) as of May 10, 2021.

85 | M&A NEWS J u n e 2 0 21
 Arab Banking Corporation -
Blom Bank Egypt
Deal value: $427 million
Sector: Banking
Image by Bank ABC – Bahrain

In January, Bahrain’s Arab Banking

Corporation (ABC) agreed to acquire
a 100% stake of Blom Bank Egypt
for $427 million. The deal, which is
subject to regulatory approvals in
Bahrain, Egypt, and Lebanon, is expected to close in Q2 2021. Bank ABC opened its
doors for business in Egypt in 1999 after buying Egypt Arab African Bank, and as of
December 2020, the lender had total assets of $30.4 billion.

Blom Bank Egypt, which provides retail and corporate banking, SME banking, and
financial institution solutions and services, has a network of 41 branches and a paid-
up capital of $191 million.

Bank ABC ranked 62 on Forbes Middle East’s Top 100 Companies 2020 list, and the
Bahraini lender is 59.37% owned by the Central Bank of Libya while Kuwait
Investment Authority holds a 29.69% stake. Bank ABC had total assets of $30.4
billion in 2020, and the banking group has a market cap of $896 million (BHD 337.6
million) as of May 10, 2021.

Masraf Al Rayan - Al Khalij

Commercial Bank
Deal value: Unknown
Sector: Banking

Image by Masraf Al Rayan

In January, Qatar’s Masraf Al Rayan

and Al Khalij Commercial Bank
agreed to a share-swap merger deal
that is expected to create a mega
Shari’ah-compliant bank with
combined assets worth approxi-mately QAR 172 billion $47.2 billion. The transaction
is expected to be closed in H1 2021, subject to regulatory approvals. Al Rayan will
issue 0.50 shares for every Al Khalij share, corresponding to a total of 1.8 billion new
shares issued to Al Khaliji shareholders.
86 | M&A NEWS J u n e 2 0 21
Al Rayan has a network of 17 branches in Qatar, while Al Khaliji, which offers
wholesale banking, treasury, and personal banking services, has four branches in
Qatar. The Qatari government is the largest shareholder in both banks through
various entities, with over 50% shareholding in Al Rayan and more than 47% in Al
Khalij. Al Rayan and Al Khalij have market caps of $9.2 billion (QAR 33.4 billion) and
$2.1 billion (QAR 7.8 billion), respectively, as of May 10, 2021.

Aramco Oil Pipelines Company

Deal value: $12.4 billion
Sector: Energy

Image by FAYEZ NURELDINE / AFP

Earlier in April, Saudi Aramco signed

a $12.4 billion energy infrastructure
deal with an EIG Global Energy
Partners-led consortium for a 49%
stake in its newly formed pipeline
subsidiary, Aramco Oil Pipelines
Company. Aramco will retain a 51% shareholding in its pipeline business. The lease
and leaseback deal gives the EIG-led group rights to 25 years of tariff payments for
oil carried on Aramco’s pipelines. Saudi Aramco’s pipeline deal is similar to Abu Dhabi
National Oil Company’s $20.7 billion energy infrastructure deal with a Global
Infrastructure Partners-led consortium last June.

ADNOC Logistics & Services

Deal value: Unknown
Sector: Energy

Image by ADNOC

The Abu Dhabi National Oil

Company’s (ADNOC) shipping and
maritime logistics unit took over
British equipment hire specialist
Speedy Hire’s entire Middle East operations in March. The deal that added over 2,000
pieces of equipment such as cranes, forklifts, and other high-value machinery to
ADNOC Logistics & Services (ADNOC L&S). However, the value of the transaction
was not disclosed. ADNOC L&S recently bought two crude carriers taking its entire
fleet to 140 owned vessels and 100 chartered vessels.

87 | M&A NEWS J u n e 2 0 21
 Almarai Co. - Bakemart
Deal value: $25.5 million
Sector: Food & Drink

Image by Volodymyr Dvornyk /

Shutterstock.com

Saudi Arabia’s Almarai agreed in

March to take over the entire UAE
and Bahrain operations of
Bakemart, the UAE-based
manufacturer and producer of
frozen bakery items, in a $25.5
million deal. With a market
capitalization of $14.6 billion (SAR 55 billion) as of May 10, 2021, Almarai is the
biggest dairy firm in the Gulf region.

Ranked 31st on Forbes Middle Top 100 Companies 2020 list, Almarai reported
revenues of $4.1 billion in 2020, a 7% increase compared to $3.8 billion the
previous fiscal year.

International Holding Company

- Royal Horizon Holding
Deal value: $21.8 million
Sector: Retail

In January, Abu Dhabi-based

International Holding Company
(IHC) acquired a 60% stake in
commodities supplier Royal Horizon
Holding for $21.8 million through its
subsidiary Zee Stores. IHC’s Zee
Stores was founded in 2002 and had
assets worth $51.5 million as of September 2020 and an annual turnover of around
$81.7 million.

Last December, Zee Stores was listed on the Abu Dhabi Securities Exchange Second
Market together with IHC’s other subsidiaries, Palms Sport and Easy Lease. With a
market capitalization of $48.5 billion (AED 178 billion) as of May 10, 2021, IHC has
grown exponentially through acquisitions both inside and outside the UAE.

88 | M&A NEWS J u n e 2 0 21
Anticipated deal

Aldar Properties - SODIC

Deal value: $420 million
Sector: Real estate

Image by Mellouk Quider / Shutterstock.com

Abu Dhabi-based property developer Aldar Properties offered to acquire a minimum

of 51% stake in Egypt’s Sixth of October for Development & Investment Co. (SODIC)
for $420 million in March.

Aldar stated that the indicative purchase price offered would be in the range of EGP
18 ($1.15) to EGP 19 ($1.21) per share.

With a market capitalization of $7.64 billion (AED 28.1 billion) as of May 10, 2021,
Aldar Properties secured a deal to take over the management and development of
Abu Dhabi government capital projects worth $12.3 billion earlier in the year.

Last month, Abu Dhabi’s Mubadala Investment Company sold a 12.2% stake in Aldar
to a subsidiary of investment firm Alpha Dhabi Holding for $953 million. Source: Forbes

89 | M&A NEWS J u n e 2 0 21
Bahrain

Bahrain sees 23% rise in the value of

government tenders issued in Q1

The oil sector was the biggest source of contracts in Q1, accounting for 48 percent of awards. (Reuters)

• $1.6 billion of government contracts awarded in Q1

• Increase driven by Bahrain's infrastructure development plans

Dubai, May 23, 2021 - Bahrain issued $1.6 billion worth of government contracts in
the first quarter (Q1) of 2021, a year-on-year rise of 23 percent, according to new
data released by Bahrain’s Tender Board — the country’s government procurement
regulator.

The total number of individual contracts rose 25 percent year-on-year over the first
three months of 2021, with the majority issued as part of Bahrain’s $32 billion
infrastructure development plans.

The oil sector was the dominant source in Q1, accounting for $767 million — or 48
percent — of all contracts. This was followed by the aviation sector ($382 million),

90 | M&A NEWS J u n e 2 0 21
the construction and engineering consultancy sector ($194 million) and the materials
and equipment sector ($119 million).

“The volume of economic activity, with 25 percent more

tenders awarded in the first quarter of this year
compared to last year, demonstrates the strength of the
economy and the size of the opportunity for businesses
that are looking to partner with Bahrain,” the chairman
of the Tender Board, Shaikh Nayef bin Khalid Al Khalifa,
said in a press statement.

Shaikh Nayef bin Khalid Al Khalifa,

Chairman of the Tender Board

“Improvements made to our e-tendering system over the last year are just part of a
wider digitalization drive that is realizing greater efficiencies, benefiting the private
sector and taking full advantage of Bahrain’s advanced digital infrastructure.”

An analysis of the contracts awarded in 2020 showed that Bahrain’s Ministry of

Health reported a 140 percent year-on-year increase in the total value of tenders, as
the country ramped up its expenditure to combat the spread of the coronavirus
disease (COVID-19).

The data showed that 1,688 tenders

worth $4.1 billion were issued in
2020, a decline of 14.58 percent.
Despite the overall drop in the value
of tenders awarded, the Ministry of
Health awarded 137 tenders valued
at $298.1 million, compared to 93
tenders valued at some $123.8
million in 2019.

“This surge in spending is attributed

to the Kingdom’s robust and rapid
COVID-19 response in many fronts,
including a track and trace app, extensive testing, vaccinations, hospital robots, car
park conversions to hospitals and more,” the Tender Board said in a statement. Source:
Arab News

91 | M&A NEWS J u n e 2 0 21
Saudi Arabia

‘Airbnb of Saudi’ raises $6m funding

to expand across KSA

Saudi Arabia opened up to international tourism in September 2019. (Supplied)

• Series A funding led by Saudi venture capital firm STV

• Gathern currently has a presence in 100 Saudi towns and cities

Jeddah, May 23, 2021 - Gathern, a Riyadh-based start-up similar to Airbnb,

announced on Sunday the completion of a SR22 million ($6 million) Series A funding
round headed by Saudi venture capital firm STV and supported by existing investors
Vision Ventures, 500 Start-ups, Saudi businessman Naef Sultan AlAthel, and ARG
Limited.

The company plans to use the new funding to invest in developing its product and
expanding its geographic presence in Saudi Arabia, where it is now present in more
than 100 towns and cities, including Riyadh, Jeddah, Dammam, Abha, Al-Baha, Taif,
Al-Ula, and Umluj.

92 | M&A NEWS J u n e 2 0 21
 Naef Sultan AlAthel ,
Gathern investor

Founded in 2017 by entrepreneur Latifa Altamimi, Gathern

allows users to rent a villa, apartment, farm, caravan, room,
chalet, camp, or yacht directly from an individual owner
through its platform on a daily basis, and it is the first company
in Saudi Arabia that has obtained this license from the Ministry
of Tourism.

“We are incredibly excited to partner with Gathern – it is our first investment in the
travel space, and the largest ever investment in a female-led Saudi startup,” Ahmad
Alshammari, a partner at STV, said in a press statement. “We believe that Latifa and
the Gathern team have the right engine to tackle this fast-growing market with a
fresh approach. They have proven themselves to be incredibly nimble and resilient
during COVID-19, where they grew significantly despite the global challenges. We
are excited to see what the future holds.”

Latifa Altamimi, co-founder and CEO at Gathern, said: “Saudi Arabia has a renewed
vision for its tourism sector, with both domestic and international tourism seeing
significant support. With Gathern, we look to offer a different
experience from the traditional travel experience, by providing
unique tourist residences from actual residents.

Latifa Altamimi,
Gathern’s CEO and co-founder

This allows anyone to explore the real culture and cities in Saudi Arabia. If you
become a host on our platform, you simply list your villa, apartment, farm, caravan,
room, chalet, camp, or yacht, which allows you to earn significant additional income.”

Saudi Arabia opened up to international tourism in September 2019 and has since
announced a number of megaprojects to attract visitors, including a $530 million
fund to develop key destinations across the Kingdom. Riyadh aims to raise the
contribution of its tourism sector to its GDP from 3 percent to 10 percent, in a bid to
modernize its economy and veer away from oil dependence.

Market research firm Euromonitor International estimated in March that inbound

tourism spending in Saudi Arabia would reach $25.3 billion by 2025, recovering from
the impact of the coronavirus disease pandemic. Source: Arab News

93 | M&A NEWS J u n e 2 0 21
United Arab Emirates

With $517B private wealth, Dubai is

Middle East’s richest city

People living in the UAE are on average the richest in the Middle East with a per capita wealth of $89,000.
Image by shutterlk/Shutterstock.com

The total private wealth worth $517 billion makes Dubai the wealthiest city in the
Middle East and the 30th richest city in the world (by total wealth held), according
to a report released by NW Wealth. The bustling commercial hub of the UAE achieved
the title despite the severe economic impact of COVID-19 on the wealth of nations.

According to a report titled 'Middle East Wealth Report 2021', the emirate had 52,100
high-net-worth individuals (HNWIs), 2430 multimillionaires, and 10 billionaires.

A review of the wealth sector in the Middle East, the report categorized those with a
net asset of over $1 million as HNWIs, $10 million as multi-millionaires, and $1 billion
as billionaires.

Tel Aviv in Israel was the second wealthiest city in the Middle East with a total wealth
of $304 billion, the report said. It covered Turkey, UAE, Israel, Iran, Iraq, Saudi
Arabia, Yemen, Syria, Jordan, West Bank, Gaza, Lebanon, Oman, Kuwait, Qatar, and
Bahrain.

94 | M&A NEWS J u n e 2 0 21
 UAE dominates

Among countries, the UAE is the

wealthiest country in the Middle
East with a total wealth of $870
billion that included the fortune of
83,400 HNWIs and 13 billionaires,
among others.

The report said people living in the

UAE are on average the wealthiest
in the Middle East, with a per
capita wealth of $89,000. In terms
of growth in wealth, the country
came second with a growth of 24% while Israel took the first position with a wealth
growth of 35%.

The report attributed the growing wealth of the UAE to it being one of the world’s
biggest recipients of migrating HNWIs in the last two decades. It revealed that over
35,000 HNWIs are estimated to have moved to the UAE from 2000 to 2020 and
many of them are from India, the Middle East, and Africa.

It said low tax rates, overall safety,

a better health care system, and
Dubai’s position as an international
business hub were some of the
factors that lured HNWIs.

31% of HNWIs in the UAE had a degree in economics, accounting, and finance while
22% had a background in engineering. 22% of HNWIs acquired their wealth in
financial and professional services and 20% in basic metals.

The UAE is also the largest wealth management center in the region with an asset
under management of approximately $110 billion.

Wealth in the Middle East

The report said the private wealth held in the Middle East came to around US$4.3
trillion. Israel was the second richest country in the Middle East with a wealth of
$784 billion followed by Saudi ($542 billion), Turkey ($482 billion), Iran ($395
billion), and Qatar ($202 billion). Source: Forbes

95 | M&A NEWS J u n e 2 0 21
Saudi Arabia

Coral Bloom to account for 80% of

developed hotels in phase I of Red Sea
project
John Pagano, CEO of TRSDC
The Coral Bloom designs aimed to meet travellers’
demand during and post-COVID-19 pandemic.
(Argaam)

Riyadh, May 23, 2021 - Coral Bloom’s

gateway island Shurayrah will represent
80% of developed hotels in the first phase
of The Red Sea project, CEO of The Red
Sea Development Company (TRSDC), John
Pagano, told Al-Eqtisadiah paper reported.
hurayrah will play a key role in contributing
to the Kingdom’s GDP. TRSDC will continue developing resorts and expects to receive
visitors by the end of 2023. The Coral Bloom designs aimed to meet travelers’
demand during and post-COVID-19 pandemic, which changed significantly in the last
12 months, he added.

Saudi Arabia's Crown Prince Mohammed bin Salman launched, Feb. 10, the nature-
inspired Coral Bloom designs for the 11 unique resorts on the Red Sea project’s hub
island. Source: Arab News

96 | M&A NEWS J u n e 2 0 21
South Africa

New consortium scores big in South

Africa’s floating power station deal

Powergroup SA — a consortium comprising four companies, which is in partnership with Turkish

Karadeniz Energy Group — was registered with Companies and Intellectual Property Commission only on
15 May last year.

Johannesburg, May 7, 2021 - The South African consortium holding a 49% share of
the controversial 20-year Karpowership SA floating power station deal announced in
March by Minerals and Energy Minister Gwede Mantashe was formed less than a
year ago.

Powergroup SA — a consortium comprising four companies, which is in partnership

with Turkish Karadeniz Energy Group — was registered with Companies and
Intellectual Property Commission (CIPC) only on 15 May last year.

Two of the companies involved in Powergroup have experience in the energy

industry, but two others, owning 35% collectively, have none.

97 | M&A NEWS J u n e 2 0 21
Karpowership — of which Karadeniz holds 51% — was named as preferred bidder
to provide 1 220MW of electricity through three floating power stations using
liquefied natural gas.

Its appointment as a preferred bidder in a 20-year deal worth R218-billion, has been
challenged by one of the unsuccessful bidders in the process, DNG Energy, whose
executive director, Aldworth Mbalati, has claimed that the bidding procedures were
manipulated.

The award has also been questioned by opposition parties, which called for an
investigation into the award of the contract, but they were outvoted in parliament.

The 20-year powership contract is yet to receive approval from the department of
environment or Transnet, which operates the Saldanha, Coega and Richards Bay
harbours off which Karpowership’s vessels will be moored.

According to CIPC records, on 15 May last year, Powergroup’s directors were Durban
lawyer Ravin Rajoo, energy investor Sechaba Moletsane and former banker Sureshan
Moodley.

98 | M&A NEWS J u n e 2 0 21
 Rajoo, an adviser to the taxi industry in KwaZulu-Natal
and his-sister-in-law, Narissa Ramdhani, are directors of
Bodasing Investco, which holds 15% of Powergroup.

Ramdhani has extensive business interests, none of them

in the energy sector; Rajoo is managing partner of
Bodasing and Company attorneys in Umhlanga.

Powergroup’s Girector
Durban lawyer Ravin Rajoo

Rajoo has served as a legal advisor and strategic

consultant to the South African National Taxi Council. He
also acts as a legal adviser to the National Taxi Alliance.

Among his higher-profile clients is Mandla Gcaba, head of

KwaZulu-Natal’s most influential taxi family and a nephew
of former president Jacob Zuma.

Powergroup’s Director
Energy investor Sechaba Moletsane

Karpowership spokesperson Kay Sexwale said Rajoo had

been requested to assist in providing legal and
commercial advice and was later invited to become
shareholder. She said Rajoo had been “part of an energy
demand-side management patented solution that
addresses load-shedding mitigation before his
involvement with this project.

Powergroup’s Director
Devarasi Moodley

Therefore, had knowledge of the energy space and challenges in South Africa.”

Sexwale confirmed that Bodasing Investco had been created as a special-purpose

vehicle for the project.

Former banker Moodley and his wife, Devarasi, a property investor, own 20% of
Powergroup through their investment company, 1st Group Investments.

Moletsane and his wife Lusanda own 45% of Powergroup through Khumo ea Tsebo
Advisory Services. Lusanda Moletsane is the co-director of Matlama Resources,

99 | M&A NEWS J u n e 2 0 21
together with George Mokoena, a lawyer and former adviser to former state security
ministers Bongani Bongo and David Mahlobo.

According to CIPC records, on 28 May last year Moletsane, Rajoo and Moodley
resigned as directors of Powergroup.

On the same day, Ramdhani, Devarasi Moodley and Lusanda Moletsane were
registered as active directors of the Powergroup, together with Anthea Mokoena.
She later resigned from Powergroup, shortly before the Karpowership bid was
submitted to the department of mineral resources and energy.

Bid evaluation began on 29 January, with Mantashe naming the preferred bidders
on 15 March. The department has defended the award, saying it was made in
accordance with procurement and financial management procedures, and through
a transparent and fair process.

Spokesperson Nathi Shabangu said the department would defend the application
by DNG but declined to comment further. Source: Mail&Guardian

100 | M&A NEWS J u n e 2 0 21

South Africa

Platinum records for South African mines

‘Little silver’ lining: Sibanye-Stillwater Khuseleka platinum mine near Rustenburg. Sibanye’s adjusted
earnings from its mines rose by 90% in the first quarter of 2020. Photo: Waldo Swiegers/Bloomberg/Getty
Images
Johannesburg, May 16, 2021 - Platinum group metals — which, despite last year’s
volatility, outpaced coal sales for the first time in a decade — are well hedged as
countries around the world cut emissions. This is according to local industry experts,
who say platinum miners are in a good position for a lower carbon future in which
others may be left in the dust.

In a show of how fortuitous a spot some platinum miners find themselves in,
Sibanye-Stillwater last week reported a bumper start to the year.

Sibanye acquired Aquarius Platinum in April 2016 and later that year bought Anglo
American Platinum’s Rustenburg mines. Sibanye’s 2019 acquisition of Lonmin saw it
competing with the world’s largest PGM producers.

The mine acquired all these assets for R13.5-billion over a five-year period.

101 | M&A NEWS J u n e 2 0 21

According to Sibanye’s quarterly performance results, the South African mines
delivered a 90% increase in adjusted earnings, which rose to R15.3-billion from R8-
billion in the first quarter of 2020.

PGMs consist of platinum, palladium, rhodium, ruthenium, osmium and iridium.

According to Sibanye’s first quarter update, precious metals prices remained strong
during the period, with palladium and rhodium prices reaching record levels.

Going platinum

PGM prices have continued to rise. “The PGM markets remain tight with the
fundamental outlook for these metals positive. In the medium term, the roll out of
Covid-19 vaccines across the globe continues and stimulus measures drive global
economic recovery,” said Sibanye’s chief executive, Neal Froneman.

“Longer term our PGMs and green metals are expected to continue to play a critical
role as global sentiment shifts towards a more environmentally conscious future.”

Sibanye was not the first to report record returns as a result of surging PGM prices.

In April, low-cost PGM producer Sylvania Platinum Group reported that it made
R618.3-million in profit in the first three months of 2021 — almost double the R316.9-
million it made the previous quarter. Sylvania’s earnings increased from R453.7-
million to R879.5-million. These first quarter record results continue a trend that
emerged in 2020, when most industries were left reeling from pandemic-induced
uncertainty.

A review of the 2020 annual results of the biggest local platinum miners — Anglo
American Platinum, Impala Platinum, Sibanye-Stillwater and Northam Platinum —
reflect higher earnings across the board compared with 2019.

Notably, Sibanye’s net earnings for its South Africa-based PGM operations increased
to R29-billion, up from just R8.8-billion in 2019. And Impala Platinum’s reported
headline earnings of R16.1-billion were five times higher in 2020 than they were the
year before.

Price boom

According to Statistics South Africa, the country’s PGM output was adversely affected
by Covid-19-related mine disruptions. Electricity outages at the Anglo-American
Platinum Converter Plant also constrained supply for several months. This resulted
in the lowest annual mine supply from South Africa for over two decades.

102 | M&A NEWS J u n e 2 0 21

But despite a 15% drop in PGM production in 2020, sales revenue increased by 40%
as a result of higher prices, StatsSA noted. In US dollar terms, prices for palladium
increased by 43% and rhodium by 187.2%. In rand terms, rhodium prices climbed
by 222.6%.

103 | M&A NEWS J u n e 2 0 21

The PGM sector is the largest contributor to South African mining in terms of sales,
according to StatsSA. But coal is the most significant component of mining in terms
of value adding, accounting for 25%.

For the first time in a decade, PGM sales overtook those of coal to become the most
significant contributor to total mining-industry sales, reaching R190-billion in 2020.
This was more than the value of iron ore and gold sales combined, StatsSA noted.
“The last time a similar development occurred was between 2001 and 2008 during
the platinum price boom.”

In demand

Andries Rossouw, a mining expert at PwC, said

the recovery in PGM demand in 2020 “actually
surprised a lot of people”. New vehicle
manufacturing in China grew significantly, as
people opted for private transport amid Covid
concerns, Rossouw said.

Andries Rossouw

Vehicle demand is the single largest demand segment for platinum. Only battery
electric vehicles do not contain any PGMs.

More significantly, Rossouw said, there was higher demand for platinum and
palladium catalyst loadings — used to control vehicle emissions — on the back of
more stringent emission requirements in China and in Europe.

The World Platinum Investment Council (WPIC) is optimistic about continued upside
trends for PGMs.

Though platinum supply is expected to increase by 17% in 2021, the market is

forecast to remain in a deficit for the third consecutive year. The WPIC expects
continued uncertainty over South African PGM supply because of electricity
disruptions.

There will also be a 3% increase in total demand. And as economies continue to

reopen amid vaccine rollouts, demand in platinum-reliant sectors will rise above 2019
levels, the WPIC notes.

All of these conditions make for a positive supply demand outlook for 2021 and
greater price pressure for PGMs. And the WPIC expects investor interest to remain

104 | M&A NEWS J u n e 2 0 21

above the average five-year level because more investors are attracted by platinum’s
use in the hydrogen economy.

Cruising into the future

According to the WPIC, demand for platinum in the vehicle industry is forecast to
rise in 2021 by 25%, well above pre-Covid levels.

One future threat to platinum’s hold on the vehicle sector is the rise of battery electric
cars, which, according to the International Energy Agency, accounted for two-thirds
of new electric car registrations in 2020.

The electric vehicle market will probably put a damper on palladium and rhodium
demand, Rossouw said. “But we’re not talking about anything that’ll happen in the
next 10 years in terms of a big shift in demand. You will start seeing slower growth
in demand, but if we continue to see low supply growth, it’s not going to make a
huge difference.” On the other hand, platinum is crucial to the hydrogen economy.
It is used in fuel cell electric vehicles and to produce green hydrogen. Last month
Anglo American Platinum announced it is working on the development of a PGM-
based technology to simplify hydrogen storage in electric vehicles.

Late last year, the non-profit economic research organisation, Trade & Industrial
Policy Strategies, identified the hydrogen economy as a potential pathway to a
sustainable future.

“Given South Africa’s high dependency on coal, and the combustion of coal being
associated with high CO2 emissions, South Africa will have to transform key value
chains towards more sustainable production. This transformation not only protects
the country’s resources from future climate events but also secures South Africa’s
future in the global marketplace.”

Rossouw said: “All this will support platinum demand for the future … It is a very
versatile metal and that probably means that compared to other metals it has more
sustainable long-term prospects.”

Andrew Lane, Deloitte’s Africa energy, resources and industrials lead, agreed. “PGMs
are quite nicely hedged for the energy transition.”

A large part of the PGM basket is exposed to the vehicle value chain, Lane said.
“They are heavily exposed to the internal combustion engine. But they are also
exposed fuel cells. So they’ve got one foot in either camp … So I would expect that
they are going to be relatively robust.” Source: Mail&Guardian

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United Kingdom

An English estate bigger than Central

Park is available for the first time
in 400 years
The crown jewel of the property is a historically designated
Jacobean manor house with seven bedrooms

May 21, 2021 - A mammoth English country estate at a whopping 904 acres is larger
than New York City’s Central Park—or almost three times the size of Hyde Park—has
come to the market asking for offers in excess of £18 million (US$25.5 million).

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The Newhouse Estate, nestled within the verdant New Forest in Southern England,
has been handed down through the same family for generations, making its debut
this week the first time the property has been available to buy in close to 400 years.

The crown jewel of the sprawling estate is its Jacobean mansion, a Grade I-listed
house dating to around 1604, according to a news release from listing agency. Its
historic destination identifies the home as one of “exceptional interest,” according to
Historic England, the public body responsible for protecting and preserving the
country’s oldest buildings.

The sellers of the property could not be determined.

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Grade I is the rarest of England’s three historic building categories, with only 2.5%
of the country’s estimated 500,000 listed buildings qualifying for the distinction.
Enlarged in the mid-18th century, and majorly restored in the late 20th century, the
seven-bedroom home has been well maintained by the owners over the centuries.
It has a drawing room, a dining room, a morning room, a library and cellars, the
release said.

"Newhouse is a truly stunning, historic, but incredibly manageable house,” Mark

McAndrew, head of national estates and farms at the agent, said in the release.

The “beautiful family home

is in a quite extraordinary
position,” he said. “One
thing that people are
searching for is privacy and
tranquillity, of which the
estate has in abundance.

Surrounded by its own

parkland and woodland and
with no roads or public
access, Newhouse occupies
a secluded part of the New
Forest National Park.”

Along with the main house, the estate—which is available to buy as a whole or in
lots—also has an historic coach house, a farmhouse, a number of cottages,
outbuildings and stables, and its extensive land comprises gardens, lakes, farmland
and woodland. Source: Mansion Global

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United States

E.L. Doctorow’s longtime Manhattan

home lists for $2.1 million
The late novelist and “Ragtime” creator hosted a bevvy of
literary and theater personalities at the 3,000-square-foot co-op
on Sutton Place

New York, May 24, 2021 - The pre-war Manhattan co-op where literary legend E.L.
Doctorow wrote his final three historical-fiction novels—“The March,” “Homer &
Langley” and “Andrew’s Brain”—has just come on the market for $2.1 million.

The 3,000-square-foot apartment in Midtown East’s tranquil Sutton Place enclave

was listed Monday by Anne Shahmoon, a real estate associate with Sotheby’s
International Realty-Downtown Manhattan Brokerage. In 2000, after their three
children were grown, Doctorow and his wife, Helen, sold their home in New Rochelle,
New York, and bought the co-op. Doctorow died in 2015 from lung cancer at age
84.
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 The exterior of the building has a
plaque honoring Doctorow.

“My husband preferred to

work in the office in the
apartment instead of at his
office at New York
University,” where he was a
professor of English and
American Letters, said Ms.
Doctorow, noting that after
his death, a plaque was
installed on the exterior of
the building in his honor.
“In the mornings, he would
generally do catch-up work,
including calls. He spent the
rest of the day writing. At 5
or 6 in the evening, he stopped, and we had a drink then dinner.”

In addition to Doctorow’s office, the apartment has two en-suite bedrooms whose
features include walk-in closets (the primary suite has two walk-in closets).

There also are three-and-a-half bathrooms, a library, a dining room, a living room
with a fireplace, a sizable laundry room with storage cabinets and closets and a large
eat-in kitchen, which has an island and double everything: two ovens, two
dishwashers, two sinks, two refrigerators and storage space.

“We did a lot of entertaining there,” Ms. Doctorow said. “We saw a lot of really
interesting people.”

The guest list, she said, included actors Brian Stokes Mitchell, James Naughton and
Alan Alda and his wife, Arlene; playwright Terrence McNally; Broadway composer
Stephen Flaherty and lyricist/book writer Lynn Ahrens, who wrote the score for the
musical “Ragtime,” which was based on Doctorow’s novel of the same name.

“The Doctorow apartment has incredible space, beautiful light and very high
ceilings,” said Ms. Shahmoon. “Everything is in good, move-in condition, and if the
new owner chooses, it can be renovated in stages.”

She added that “there’s a ton of wall space to display art.”

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Doctorow—the E.L. stands for Edgar Lawrence—was named for the 19th-century
mystery writer Edgar Allan Poe. He was born in the Bronx, and while he was a
student at the Bronx High School of Science, he published his first works in the
school’s literary magazine.

He met Helen while in graduate school at Columbia University, and they married in
1954.

He published his first novel,

“Welcome to Hard Times,” in 1960.
He went on to write 11 other
novels, including “Ragtime”
(1975), “Billy Bathgate” (1989) and
“The March” (2005), each of which
won a National Book Critics Circle
Award, and “World’s Fair” (1985),
which won a National Book Award.

Three of his novels—“Welcome to

Hard Times,” “The Book of Daniel,”
(1971) and “Billy Bathgate”—were turned into movies; so was his 2008 short story
“Wakefield.” “Ragtime,” which was reimagined as a Broadway musical, received four
Tony Awards.

Upon the writer’s death in 2015, then-President Barack Obama heralded him in a
tweet as “one of America’s greatest novelists.”

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Ms. Doctorow said she and her husband liked the apartment, which is in the cul-de-
sac community of Sutton Place that runs between 53rd and 59th Streets along the
East River, because “it’s right in the thick of things. In every room except the kitchen
and laundry there are enormous windows that are nearly the entire width of each
room. You can see the Roosevelt Island tram and all the activity of Second Avenue
and 57th Street.”

The building's amenities include a roof deck.

She said she decided to sell the co-op now because “it’s a huge, gracious
apartment—it’s too big for one person. And I’m getting a little older—I’ll be 90 in
October—and I’m spending more time with my family.”

Built in 1928, the 15-story building, which was designed by Leonard Cox & Arthur
Holden and originally decorated by legendary designer Dorothy Draper, has only 35
units. Most of the floors, including the one with the Doctorow apartment, have only
two units.

The white-glove building, which has private-entrance doctor’s offices on the first
floor, offers a variety of amenities, including a roof deck with a large garden. Source:
Global Mansion; Images: EmpireOptix for Sotheby's International Realty

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Incredible Beach Resort Unique 16th Century Mansion Palace in Venice

Castle in Umbria Feudal villa in Tenerife Spectacular villa in Javea

Luxury Residence London Mansion in Ascot, Berkshire Luxury villa, Cumbre del Sol

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The world’s glaciers are melting faster,
scientists say

photo: Wikimedia Commons

Paris, May 4, 2021 - Glaciers have been melting worldwide as a result of higher
temperatures from climate change, but just how fast they have been in retreat
should be a cause for concern.

In the largest-scale study of its kind, an international team of researchers from ETH
Zurich and the University of Toulouse looked at all the world’s 220,000 or so glaciers,
excluding the ice sheets on Greenland and in the Antarctic, to see how rapidly
glaciers have been losing their mass and thickness in this new century.
Their findings make for sobering reading: the planet’s glaciers lost a total of 267
gigatons of ice each year on average between 2000 and 2019. That amount of lost
glacier, the researchers say, would be enough to submerge Switzerland under six
meters of water every year.
Disconcertingly, the loss of glacial mass has been accelerating. Between 2000 and
2004 glaciers lost 227 gigatons of ice a year whereas between 2015 and 2019 the
annual loss amounted to 298 gigatons.
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Some of the fastest-melting glaciers are in Alaska, Iceland and the Alps, but
mountain glaciers in the Pamirs, the Hindu Kush and the Himalayas are losing much
of their mass and thickness, too.
“The situation in the Himalayas is particularly worrying,”
says Romain Hugonnet, a researcher at ETH Zurich and
the University of Toulouse who was the study’s lead
author and whose team studied imagery taken by
NASA’s Terra satellite, which orbits the Earth once every
100 minutes and is equipped with two cameras that
record pairs of stereo images that yield high-resolution
digital elevation models of all the world’s glaciers.

Romain Hugonnet, a researcher

at ETH Zurich and the University
of Toulouse

“During the dry season, glacial meltwater is an important source that feeds major
waterways such as the Ganges, Brahmaputra and Indus rivers,” Hugonnet explains.
“Right now, this increased
melting acts as a buffer for
people living in the region, but
if Himalayan glacier shrinkage
keeps accelerating, populous
countries like India and
Bangladesh could face water or
food shortages in a few
decades.”

Zemu Glacier is the largest glacier in

the Eastern Himalaya.

Meanwhile, much of all that water from glaciers has ended up in the seas, whose
levels rose around 0.74 millimetres a year during the observed period, the
researchers say.
This latest research has been unique in its global scope, yet its findings underline
those in earlier studies. Almost everywhere glaciers have been shrinking at a rapid
pace with noticeable changes to local environments. Source: Sustainable Times

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Branding & Brand
Think of branding as a set of
signals that tell people what
your business is about - who
you are, what you do, and
how you do it. Many people
differentiate further between
“branding” and “brand.”
Branding, then, covers the distinct symbols that represent your
company, such as your logo, graphics, colour palette, fonts, and
so forth. The brand is then the overall package - the sum of your
branding and what your company stands for. When it’s done well,
however, the two are interchangeable. That’s branding.
For example, unless
you’re a marketing or
psychology buff, you’ve
probably never once
marvelled at Apple’s
minimalistic approach.
You may not have
noticed how sparingly
the company uses text
and how much empty
space appears in ads, on boxes, or even in their stores. That’s all
branding. But you probably do associate the iPhone with things
like luxury, efficiency, and exclusivity. That’s the brand. Source: Husam
Jandral

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You are a successful M&A Advisor …
➢ if you understand the role of mergers and acquisitions in your client's
business strategy

➢ if you are realistic about the goals and assess the target companies correctly
and use bidding tactics to avoid common pitfalls

➢ if you master negotiation processes and achieve the best possible transaction
results

➢ if you recognise key factors for lasting success

➢ if you are familiar with the cultural and systemic challenges that arise during
a takeover

➢ if you successfully complete the integration and achieve the maximum long-
term value from the merger

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Letter to the Editor

Why did the chicken cross the road?

Because...
Dear Dr Wagner,

I’ve been to countries all over the world, some more developed than others and
I’ve had a few dicey moments (no, not exactly Indiana Jones but definitely
uncertain).

In the more out-of-the-way places, life just works differently and can be
interrupted by things that we usually take for granted. Once, I was someplace
where they lose power quite frequently and the people were pretty much unfazed
and went about their lives. No looting, no riots in the street, it was just business as
usual.

I asked my colleague about it and he said something I’ve never forgotten. He said,
“some countries are ‘why’ countries, and some countries are ‘because’ countries.”
What he meant was that in “why” countries, when the power shuts down,
everyone wants to know why. “WHY...why is this happening, who is responsible?”
In “because” countries, the same situation is met with a simple shrug of the
shoulders and they say “because” and accept that.

Now I don’t mean to get into a whole philosophical thing here but here in the U.S.,
we are very much a “why” culture.

• “Why does it take two days to receive my packages from Amazon?”

• “Why does it have to rain on my birthday?”
• "Why, with every streaming service known to mankind, is there still nothing
on TV?”

I think most of the time, I’m a “because” person – which I know is downright
INFURIATING to the “why” people in my life and sometimes, just to be puckish, I
do it on purpose. “Why is the refrigerator door open?” “Because someone didn’t
close it” I think pragmatically, sometimes we need to accept things the way they
are and move on. I don’t know if we could remain sane otherwise.

At home, I’m a “because” person but in my work, I’m an almost insufferable “why”
person.

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• “Why is there suddenly such a concentration of sales to one customer?”
• “Why did the cost of raw materials go up?”
• “Why is working capital behaving like a @#$%$ yo-yo?’

Way back there in business school, a professor said that to be a good analyst, you
need to be a cynic. You need to be a pain in the neck and dig until you know why
what happened, happened. That way, you can better ascertain what’s in the
future, what’s driving value and, where the risks lie.

Once upon a time, I was working on a valuation for a “business divorce” and my
client was one side of the family (the “good guys” and the minority shareholders)
and the other side of the family ran the company (the “bad guys” and controlling
shareholders). The bad guys had been pulling shenanigans for years to the
detriment of the good guys and the good guys finally said “enough of this, just buy
us out and we’ll go placidly along and live our lives” - or something to that effect.
This sets up a scenario where the good guys wanted to sell high while the bad
guys wanted to buy low.

The company in question bakes bread. I’ll let that sit for a moment...they bake
bread, they don’t make rocket parts; they didn’t make the “killer app-du-jour”; they
didn’t figure out how to make sure there’s always something good to watch on TV
– they bake bread.

Now, as I understand it, not a lot has changed in a few thousand years. It’s
basically flour, water, heat, and time. But the question in my mind was where the
value lived inside this 90-year-old company and how the heck was it able to keep
running profitably for so long? The bad guys (remember, they are lobbying for a
low value) were 100% sure that the whole thing would collapse and be worthless
any day now. At first glance, I thought they might be right... but you know bad
guys are never right.

I wondered how this crummy business (pun fully intended), could keep making
money for so long. The building had not been updated since the last ice age and
the ovens were grossly inefficient and outdated. The book value of company’s
assets was pretty darn close to zero. Anything and everything in that place was so
old that it had been depreciated down to almost nothing and yet, the company
made money every year. According to management (the bad guys, remember?),
the company walked a constant tightrope, and the fear was that any day now,
some big company would swoop in and build a state-of-the-art facility across the
street and the family’s precious business would be worthless. I asked myself,
“WHY…why hasn’t someone already done this? It seems so obvious and WHY oh
WHY does this company have a stranglehold on every grocery store, convenience
store, and deli within 150 miles?”
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After wondering and asking everyone I could think of (including a friend who is a
baker) a few facts came out:

1. It would cost $60 million+ to build a facility with enough output compete
effectively. The fancy word for that is “high barrier to entry” and it protects the
company from someone opening a facility in their backyard. Strike one for the bad
guys.
2. There are certainly baking facilities that could bake bread and ship it into this
region and compete with this company, right? Well, not really. The thing about
bread is…it begins to go stale the moment it comes out of the oven and the
logistics of getting fresh bread from here to there becomes complicated and costly.
Strike two.
3. A whole other business line was never even discussed because the bad guys
were using the flour, ovens, trucks, trade name, etc. to produce bagels and set up
a separate company to keep it away from the good guys (the aforementioned
shenanigans). Strike three.

Clearly, the value was really driven by the fact that it would cost too much and be
too difficult for someone else to do what they do where they do it - plus, the
shenanigans.

In the end, the good guys won, the bad guys were vanquished. OK, I’m being
overly dramatic, they paid a fair amount for my clients’ shares and that constitutes
a win here. The bottom line is that sometimes you need to be a “why” person and
sometimes a “because” person and the trick is knowing which one to be and when.

And now, here are some words of wisdom from people who aren’t me:

• "It takes considerable knowledge just to realize the extent of your own
ignorance." - Thomas Sowell
• "What we observe is not nature itself, but nature exposed to our method of
questioning." - Werner Heisenberg
• "Questioning anything and everything, to me, is punk rock." - Henry Rollins

Thanks for reading. As always, I appreciate and welcome your comments and
feedback.

Be good and be well.

Best,
Tony Cotrupe, CFA

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 WE GOT MARRIED

CBA (Germany) and VR M&A (United States) joined in their Exclusive Global
Alliance of currently 400+ individual M&A, Business-, Legal-, and Tax-
Advisers in over 100 countries.
After CBA had created M&A cooperation networks on four continents, this had
not yet happened in North America. But now we have joined forces with VR
M&A in the United States.
VR was not yet present outside the Americas, so CBA and VR complemented
each other perfectly in their main areas and formed
The Exclusive Global Alliance of M&A Advisors.
VR's registered trademark and the slogan "VR has sold more companies in the world
than anyone else.®" speaks for itself.
With more than 400+ M&A advisors worldwide, CBA/VR is today the most
widespread alliance of individual professionals for M&A and related services in
the purchase and sale of privately held mid-sized companies. CBA and VR
remain separate entities but work together in an exclusive global network.
Through this alliance, CBA partners have access to more than 100 M&A experts
and a strong network of investors in the US, the largest M&A market.
For VR and clients this opens up completely new opportunities for successful
cross border transactions in cooperation with CBA’s 300+ M&A Professionals
outside the United States.
The M&A experts of VR and CBA will cooperate exclusively and directly with
each other and have mutual access to each other's mandates in cross-border
transactions between North America and the rest of the world. Both will share
and use each other's network and web presence to enhance the power of global
cross-border networking!

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