Iran Financial Center (IFC) in collaboration with the Central Securities Depository of Iran (CSDI) will organize the first Mergers and Acquisitions (M&A) Conference on February 16 to enhance industry consolidation, CSDI reported.
The CSDI will host the conference and will be referring to M&A principles, challenges and functions in Iran’s capital market.
The organizer has invited scholars, researchers, and students to submit their articles with reference to the following topics:
1. different types and mechanisms of acquisitions;
2. company valuation and taxation in M&A;
3. risk management in M&A procedure;
4. financial engineering and creating new instruments in M&A;
5. M&A legal affairs based on Iran’s law;
6. the role of Securities and Exchange Organization (SEO), as well as other equity market bodies in M&A procedure in Iran;
7. case study regarding M&A in Iran and other countries;
8. legal framework, and other relevant regulations in M&A concerning the shareholders’ rights
M&A is a key tool to grow fast and earn money. Companies spend millions of dollars aiming to achieve synergy and competitive advantage over rivals. The core policy is to add new production lines and enhance industry consolidation when the overall market is mature, and where market opportunities are flat or shrinking.
M&A is an internationally popular financial mechanism, and is usually considered as a strategy to penetrate into new markets, or enhance revenue growth; the CSDI quoted Mohammad Sajad Siahkarzadeh, the R&D manager at the CSDI as saying. He added that “given the fact that M&A boosts turnover, and generates revenue, it is known as a lucrative practice the world over.”
Speaking on the upcoming conference, Siahkarzaheh said local financial companies are barely familiar with M&A, adding that “legal loopholes, along with lack of faith are the most crucial obstacles, however worldwide M&A operations were worth more than $3 trillion in 2014”.
Global M&A Year in Review
The year 2014 was the tipping point for Merger and Acquisition (M&A), in which the lingering effects of the financial crisis were finally shaken off, Bloomberg reported. For four years, all of the forces were aligned for a boom in mergers: cash piling up on corporate balance sheets, cheap financing and slow organic growth.
Yet from 2010 through 2013, dealmaking defied predictions and remained flat. That all changed in 2014, when CEOs and boards launched deals on a scale and at a pace not seen since 2007. Moreover, some of the biggest were unsolicited offers, such as Pfizer Inc’s $124.56 billion proposal to take over AstraZeneca PLC, Twentieth Century Fox Inc’s $94.45 billion offer for Time Warner Inc and Valeant Pharmaceutical International Inc’s $54.21 billion hostile run at Allergan Inc.
Telecommunications and media, pharmaceuticals and health care and energy targets accounted for most of the megadeals. North America was at the center of the surge, with the value of deals for targets there rising 54.55% over 2013. Volumes in Europe and Asia were up about a quarter over 2013. The latest boom was not a replay of the 2006-07 merger boom; the biggest private equity deals were a fraction of the size they were at the peak of the market. The other striking difference was the reaction of the market; acquirers’ stocks often rose on deal announcements, a potential incentive for more deals. In addition, deals spawn more deals as merging companies divest businesses to win regulatory approval and competitors see rivals strengthen their positions through deals and feel they must respond. In short, the M&A stars are well aligned for 2015.
Quarterly Regional Volume: Notable Highlights
Global M&A deal volume rose to $881.41 billion in the last quarter of 2014, the highest fourth quarter volume since 2006. Annual volume surpassed $3 trillion for the first time since 2007.
The Americas continued the trend of most targeted region, accounting for 50.33% of the value for the quarter. Capital flow within North America represented 41.07% of total deals.
Europe, Middle East & Africa (EMEA)-based M&A activity increased 49.02% for the quarter compared to the prior year. The region represented a quarter of global deal volume for the period with $235.80 billion in deal volume. EMEA targets topped $840.59 billion for the year, the highest value in six years.
Asia-based companies rose to the highest volume in Bloomberg league ranking history to $202.46 billion for the quarter and $670.13 billion for the year. Contributing to the record high was the threeway merger of CIMB Group Holdings Bhd, RHB Capital Bhd, and Malaysia Building Society Bhd in the fourth quarter and the five other megadeals over $10 billion announced this year.
