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Cayman stays on top of offshore merger deals

| 19/10/2016 | 0 Comments

(CNS Business): One third of all merger and acquisition deals in the offshore world in the first half of this year took place in the Cayman Islands, according to a report by a firm of international lawyers headquartered here. Cayman retained its standing as the primary target of offshore transactions accounting for 40% of the value of that business, Appleby stated in its latest edition of Offshore-i, a report that analyses data on the activity in offshore financial centres.

While figures for the first six months of 2016 was down generally on what the lawyers said were “record-setting” figures last year and both the number and value of offshore M&A deals fell, Cayman held on to the lion’s share of the deal volume and value.

Simon Raftopoulos, partner and group head of Appleby’s private equity practice here, said that Cayman was also home to four of the 10 biggest deals between the beginning of January and the end of June, including three in the technology sector, “which enjoyed a particularly robust start to the year”.

In the first six months of the year, the report claims, Cayman-incorporated companies were the target in 459 transactions worth a combined USD41bn. The value represented more than twice the amount of the next closest jurisdiction, the British Virgin Islands, while Hong Kong was second to Cayman in terms of deal volume with 263 transactions.

The largest deal targeting a Cayman company was the USD4.5bn investment in Cayman-incorporated software publisher Xiaoju Kuaizhi by a consortium including China Merchants Bank and other investors. Other significant technology deals in Cayman involved a USD2bn funding round for Cayman-incorporated Uber China and a USD2bn share buyback by Alibaba Group Holding Ltd.

While the first six months of the year saw a slowdown in completed IPOs across jurisdictions, a more positive story emerges when looking at future IPOs announced during this time period, the heavy majority of which involved a Cayman-incorporated company. Cayman was responsible for 102 of the 115 announced IPOs, with Hong Kong being the favoured stock market for Cayman companies to list.

Despite the challenges faced by many offshore jurisdictions on the world stage at present, the offshore region is still ranked sixth in the world by deal volume and fourth for value activity. Average deal size remains strong, and continuing from 2015, offshore still has the highest average deal size of any region worldwide, the lawyers report stated.


Category: Finance, Financial Services

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