Appleby reports on offshore M&A deals

Posted: 11/04/2018

Offshore-i 2017Jersey experienced an 86 per cent rise in M&A deal value in 2017, while Guernsey recorded a 40 per cent increase, in a year in which deal activity rose across the offshore region as a whole, according to Appleby. 

The latest edition of the law firm's Offshore-i report, which examines M&A activity in the major offshore financial centres, Jersey recorded a total of 129 deals during 2017, representing $19.4bn in value, and was home to three of the 10 largest deals recorded across the offshore region. 

Guernsey, meanwhile, recorded a total of 157 deals, representing $6.8bn in value. In both cases, while value was up, the number of deals decreased compared with the previous year.

M&A activity

Across offshore jurisdictions, there were 2,771 deals targeting offshore companies in 2017, representing a total value of $227bn, the report found. This marked an increase on 2016, when 2,735 deals were recorded at a value of $219bn.

“In the face of the substantial geopolitical uncertainty which overshadowed 2017, the offshore region’s positive performance is all the more remarkable,” said Cameron Adderley, Partner and Global Head of Corporate at Appleby.

“These deals were led prominently by acquisitions, although a number of companies also chose to add additional financing firepower by issuing new stocks and bonds to eager investors.”

Each deal in the offshore top 10 in 2017 was worth well over $2bn, the largest being the $6.8bn purchase of all the issued shares of Belle International, a Cayman Islands-incorporated footwear manufacturer listed on the Hong Kong Stock Exchange. 

Over the course of the year, the offshore region saw three megadeals – valued at $5bn or more.

The Cayman Islands remained the busiest jurisdiction for offshore transactions in 2017, recording more than 800 deals. It was followed by Hong Kong (592 deals), the British Virgin Islands (505 deals) and Bermuda (402 deals). 

Bumper IPO year

The Appleby report also found that 2017 was the busiest year on record for offshore IPOs.

Well over 300 IPOs were reported across the offshore region in 2017, making it by far the busiest year on record. The top sector for announced IPOs is technical and engineering consultancy, for fundraising to assist with project finance and the acquisition of additional equipment.

“In 2016, companies delayed IPOs amid heightened volatility in the financial markets,” Adderley said. “This pent-up demand was released in 2017 and IPO announcements by offshore-incorporated companies are at an all-time high.”

The offshore region also experienced a busy year with completed IPOs, seeing 179 companies successfully complete their listing. Hong Kong exchanges are the most popular for offshore companies, followed by US and London exchanges. 

Other findings 

• The finance and insurance sector dominated the offshore landscape in terms of deal value.
• Acquisitions in the real estate sector make up the main theme of this year’s highest value deals. Software development also continues to attract significant acquisitions, as companies compete to build market-share in this rapidly evolving sector.
• Despite the new regulatory restrictions, China continued to be the prominent acquirer of offshore targets, with the UK, Taiwan and US also highly placed.
• 128 deals targeting offshore-incorporated companies were financed via private equity and venture capital, for a total value of $40bn. After a relatively quiet 2016, this marks a considerable uptick in offshore activity.
• There were 3,313 outbound deals coming out from the offshore region, worth a combined $347bn. The top outbound deals, the highest value offshore-related deals over the year, show a healthy spread of sectors, including logistics, manufacturing and banking institutions.

• To view the latest Offshore-i click here


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