THE LOW OIL PRICES, rebound in tourism and overall remaining concern for Barbados’ still stagnant economy have all been major talking points in business circles.
However, as the year quickly draws to an end, mergers and acquisitions have also been hot topics. Hot on the heels of Cable & Wireless Communications’ (CWC) acquistion of Columbus International Inc and its subsequent merger with its former competitor – including a rebranding that has seen retention of the FLOW brand – has come the now controversial and continuing bidding war for Banks Holdings Limited (BHL).
Brazil beverage giant AmBev, through subsidiary SLU Beverages Limited, and Trinidad conglomerate ANSA McAL are the two entities offering millions of dollars and trading verbal salvos in the contentious BHL takeover bid, which has seen court involvement.
And even before that matter is settled, CWC has returned to the news again, this time as the one being bought by Liberty Global, said to be the world’s largest cable television company.
The central figure in that transaction is Liberty Global head John Malone, who was a principal shareholder in Columbus, and a major shareholder in the new CWC.
If all of this wasn’t enough, last week came the announcement from Canadian energy company Emera Inc, that it wanted to own subsidiary Emera Caribbean outright. Emera Caribbean, previously called Light & Power Holdings, owns Barbados Light & Power Company. Emera currently owns more than three quarters of the shares in Emera Caribbean, but is intent on getting full control.
So that overall it has been a relatively busy last few weeks in terms of the acquisition of corporate shareholdings. Indications are that on an international scale such activity will continue into 2016 and that Latin America and the Caribbean will not be immune from larger companies coming in to buy out smaller enterprises in places like Barbados.
In its Mergers & Acquisitions Trends Report 2015, international consulting firm Deloitte suggested that if the United States was an accurate yardstick, there would be more mergers and acquisitions.
Deloitte vice chairman Tom McGee said: “We are seeeing very bullish activity in a variety of sectors. The availability of finance combined with increased urgency on corporations and investment firms to deliver growth has positioned the US to potentially hit pre-recession [mergers and acquisition] activity levels in 2015.”.
Another international advisory firm Ernst & Young also released its Global Capital Confidence Barometer, which showed that “the wave of mergers and acquisitions is set to continue with 59 per cent of global companies now planning to acquire in the next 12 months”.
The survey of more than 1 600 executives in 53 countries said this was “the highest appetite to acquire recorded by the survey in its six year history.”
The survey found “an M&A market buoyed by record values in 2015 set for further growth in the next year”.
“With global deal value up 35 per cent on 2014 and more US$10 billion plus megadeals than in any previous year, the prospect of further growth in the M&A market looks certain. Four out of five executives (83 per cent) expect activity to increase,” the report stated.
The sectors expected to see most activity included manufacturing, retail and wholesale, oil and gas, consumer products, technology, mining and metals, diversified industrial products and power and utilities.
Additionally, the survey said “compared to six months ago, more respondes (40 per cent versus 35 per cent) now plan to allocate at least ten per cent of acquisition capital to emerging markets.
