Jersey experienced an 11% increase in the number of local M&A transactions recorded over the first half of 2019 when compared to the previous six months, according to a report released today by offshore law firm Appleby.

The latest edition of Offshore-i, an Appleby report that provides data and insight on merger and acquisition activity in the major offshore financial centres, focuses on transactions announced over the first six months of 2019. While the offshore region as a whole recorded its busiest first half for M&A over the past five years, deal value was down on previous comparable periods due to a rise of minority-stake investments.

“Not only did Jersey see an increase in M&A activity in the first half of 2019, the island also recorded the largest average deal size of any offshore jurisdiction during that period,” said James Gaudin, a partner in Appleby’s Corporate Department in Jersey. “The average deal size was fuelled in large part by Jersey companies being targets in two of the largest 10 deals recorded across the offshore region in the first half of 2019.”

In total, Jersey recorded 90 deals in the first six months of 2019, worth a cumulative USD15.2 billion. While total deal value was down slightly when compared to the second half of 2018, volume was up 11%. The biggest Jersey deals of the year to date have been the USD4.2 billion acquisition of Camelot Holdings (Jersey) Ltd and the USD1.9 billion acquisition of Eaton Towers Holdings Ltd.

The Crown Dependencies overall had a healthy start to the year, with the Isle of Man seeing a 64% rise in deal volume over the second half of 2018 and Guernsey recording a 4% increase in deal value over that period.

The M&A Environment Across Jurisdictions

There were 1,514 transactions recorded across the offshore region in the first half of 2019, accounting for USD120.4 billion in value. This value represents a drop when compared to recent half-year periods due in large part to fewer acquisitions and billion-dollar-plus deals in the first half of 2019.

“The 10 biggest offshore deals this year reflect the more cautious environment we’re seeing in 2019,” said Cameron Adderley, Partner and Global Head of Corporate at Appleby. “Last year, the 10 largest deals were each worth well over four billion dollars, but there have only been three of that size so far this year. These megadeals typically originate from China or the US and have been curtailed largely in the face of trade wars, risk uncertainty and national security issues.”

The US and China remained the leading investors into offshore jurisdictions, with significant activity also coming from the UK, Norway and France in Europe and Taiwan and Singapore in Asia. Intra-offshore deals involving an offshore target and acquirer also remained popular.

Outbound Deal Value and Volume Slightly Ahead of Inbound Activity

While the primary focus of Offshore-i is on transactions in which offshore targets are purchased by investors, the report also examines deals in which the acquirer is based offshore. There were 1,589 of such outbound deals announced in the first half of 2019 with a total value of USD124 billion, representing numbers that were slightly ahead of inbound activity.

Offshore companies acquired targets across 62 different countries. China, the UK and United States received the most attention but there has also been considerable focus on the major Asian and Oceania countries. India, Japan, Singapore and Australia all feature heavily and there have also been large individual deals in Western Europe.

Key Findings of H1 2019:

  • The total value of all offshore deals in the first half of 2019 was circa USD120 billion.
  • There were 1,514 deals announced, more than South America, Africa and the Middle East combined.
  • Twenty deals worth at least USD1 billion were recorded.
  • There were 144 IPOs announced on six different exchanges.
  • Eighty-five countries worldwide conducted offshore deals.
  • There was an 82% increase in the number of Information & Communication deals from the start of last year.
  • Cayman was home to the largest number of deals and total deal value.
  • There was a drop in offshore-incorporated companies being targeted by investments financed via private equity and venture capital. There were 67 deals
  • which is slightly below the typical six-month average total observed over the last five years.
  • There were 1,589 outbound deals coming out from the offshore region, worth a combined USD124 billion.