According to the latest Thomson Financial league tables, M&A activity in 2003 involving an Australian or New Zealand target or purchaser soared well above 2002 levels, with deal values up 65% from US$41bn to US$68.03bn. Deal volumes also rose, with the number of announced deals up from 178 to 266, a 49% increase. The most active sectors were investment and commodity firms, telecommunications, and electricity, gas and water distribution.

2003: the figures

Allens Arthur Robinson topped the 2003 legal adviser rankings for Australia and New Zealand, edging out rivals Mallesons Stephen Jaques and Clayton Utz. Allens led the announced and completed deal rankings (Australia/NZ involvement) for 2003, working on 25 transactions worth US$27.95bn and 41 advisory transactions totalling US$25.22bn. But Mallesons Stephen Jaques advised on a greater number of deals – 52 announced transactions valued at US$21.24bn and 51 completed deals worth US$23.49bn.

Clayton Utz took the third spot, with 46 announced transactions totalling US$18.26bn and 41 completed transactions worth US$13.76bn. The firm’s M&A head Rod Halstead said the firm was happy with its performance. “Another pleasing aspect of the year was the versatility of the practice in working across a broad range of industry sectors. In 2003, our M&A activity spanned a broad industry spectrum from financial services to mining, beverages to property trusts, and from healthcare through to gaming.”

The tables were turned in the completed deal by value (Australian/NZ target) stakes, with Mallesons taking the top position advising on 48 deals worth US$17.76bn, followed by Allens with 34 deals valued at US$14.25bn. Clayton Utz again came in third, with 40 deals totalling US$14.25bn.

Blake Dawson Waldron and Freehills also made a showing, claiming fourth and fifth spots respectively in the completed deals by value (Australian/NZ involvement) rankings. Freehills advised on 38 transactions valued at US$11.91bn, while Blakes advised on 35 deals worth US$9.18bn. For M&A involving an Australian/NZ target, Corrs Chambers Westgarth, Atanaskovic Hartnell, Gilbert + Tobin and Minter Ellison were the only other Australian firms to fall into the top 15, in which US firms made a strong showing.

Bell Gully and Chapman Tripp, both advisers on ANZ’s US$3.79bn acquisition of the National Bank of New Zealand from Lloyds TSB Group – the year’s second biggest deal – were the only NZ firms to make the rankings.

News Corp’s US$6.88bn acquisition of a stake in US-based Hughes Electronics Corp headlined the M&A deals in 2003, with group Xstrata’s acquisition of MIM Holdings for US$3.07bn in third spot.

The year ahead
Blake Dawson Waldron M&A partner Byron Koster said the firm expected to improve its ranking this year. “We’re starting in a very positive position; we’ve got 40 transactions already going at the moment with a total value of US$12bn, so that’s quite large.” Koster said despite predictions the rise of the Australian dollar against the greenback would have a negative impact on activity, the firm was continuing to see a number of inbound US-based acquisitions. “From what I read, there’s been a 50% rise in the NASDAQ in the last 12 months, so some of these companies are probably interested in using their renewed equity strengths as consideration for the acquisition of Australian assets.” He added that he had also detected a resurgent interest in traditional technology-based M&A, particularly of Australian software companies.

Mallesons Stephen Jaques is another firm preparing itself for an active year, according to partner David Friedlander. “December wasn’t as busy as it has been in previous years but then January came along and ‘boom’,” Friedlander said. “We had an incredibly busy period and it corresponded not just with their being a lot of deal activity, but highly complex deal activity which …as lawyers, we aspire to the most.”

Fellow Mallesons partner Alison Lansley said activity in Australia had remained strong despite economic downturns in other regions. “Companies’ balance sheets are still in very good shape; interest rates are still quite low; there’s plenty of economic demand and there’s still plenty of room for a lot of restructuring.”

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