The Australian Government’s US$3.2bn (A$5.58bn) divestment of the Kingsford Smith Airport (Sydney Airport) to the Southern Cross Airports consortium was the largest announced transaction in 2002.
But it could not hide the fact that 2002 was a very challenging year for most.
A slump in global stock markets, precipitated by the September 11 attacks in the US, meant the year started catastrophically, with the world’s financial markets frozen and investor confidence the main casualty of the new ‘War on Terror’.
Many offerings were postponed, with the net result that many companies found it difficult to raise the necessary capital to fund deals.
Announced merger & acquisition activity in Australia and New Zealand dived 30.68% – from US$39.50bn in 2001 to US$27.38bn in 2002 – according to Thomson Financial, while completed M&A volumes fared only slightly better, dipping 26.24% – from US$40.36bn in 2001 to US$29.77bn in 2002.
Lawyer participation too was down 27.8% – from last year’s US$35.54bn to US$25.66bn – while transactions with legal advisers accounted for 97 deals out of the 128 total deal announcements.
The most active industries in 2002 meanwhile were the electric, gas, and water distribution sector (with 13 deal announcements amounting to US$3.81bn), the air transportation and shipping sector (with deals totalling US$3.7bn), and the mining sector (which accrued US$3.32bn for 10 deal completions).