Deutsche Bank tops table with OB dealAnheuser-Busch InBev NV’s $5.8 billion purchase of Oriental Brewery has vaulted Deutsche Bank to the top of Korea’s merger league table, putting the firm on course for a record advisory year in the country.
Deutsche Bank acted on $8 billion of takeovers involving the nation’s companies this year, boosted by its guidance of Leuven, Belgium-based Anheuser-Busch through the country’s biggest merger of 2014, data compiled by Bloomberg show. Morgan Stanley is second with $7.8 billion, followed by Citigroup’s $7.7 billion, the data show.
Korean mergers surged this year amid improved prospects for economic growth and as troubled affiliates from STX Group to Tongyang Group were taken over by creditors swapping their debt for equity. The value of acquisitions involving Korean companies jumped 40 percent in the first quarter from a year earlier to $27.9 billion, according to the data.
“We were lucky having the Oriental Brewery deal, which was unusually big,” Ahn Sung Eun, Deutsche Bank’s chief country officer for Korea, said in an April 16 interview in Seoul. “Even excluding that, the deal flow is clearly showing an upward trend with demand for corporate restructuring and companies looking for new growth engines.”
Nick Footitt, a Hong Kong-based spokesman for Morgan Stanley, had no immediate comment, according to a text message reply to Bloomberg questions.
“We expect M&A activities to remain strong in 2014, driven by multiple themes, including cross border, both inbound and outbound, private-equity acquisitions and exits, and corporate restructuring and business realignment situations,” Park Jang-ho, Head of Citigroup Global Markets Korea Securities, said on Friday.
Anheuser-Busch, the world’s biggest beermaker, completed its purchase of Oriental Brewery, Korea’s largest brewer, from KKR & Co. and Affinity Equity Partners on April 1. The transaction allowed Anheuser-Busch to regain control of a company it first sold to KKR in 2009.
Deutsche Bank also advised private-equity firm Carlyle Group this year on its $1.93 billion acquisition of Tyco International’s fire and security services business in Korea. The Frankfurt-based firm acted for KB Financial Group’s purchase of a leasing and consumer-credit unit from Woori Finance Holdings.
The German bank’s 2014 merger dealflow in Korea is already more than 10 times the $745 million it advised on last year, when it was the 13th-ranked adviser, data compiled by Bloomberg show.
“With a couple of megadeals, we have seen our best-ever performance so far this year,” said Ahn, who is also CEO of Deutsche Securities Korea. “I wish we could achieve the $10-billion mark this year.”
The largest deal of the year after Oriental Brewery was the acquisition of STX Offshore and Shipbuilding by its creditors in a debt-to-equity swap worth $4.5 billion, the data show. The Korean shipbuilder, based in Changwon, sought a debt restructuring with creditors last year as it was sold by parent STX Group amid collapsing demand for new vessels.
Ahn, 52, returned to Deutsche Bank in July as chief country officer after working as head of Korean investment banking at Bank of America’s Merrill Lynch unit since 2004, according to a profile provided by the German firm. Before that, he was head of investment banking at Deutsche Securities Korea for two years.
The German company, which opened an office in Korea in 1978, has more than 350 employees at its three units in the country, according to a fact sheet provided by the firm.
Buyout funds will play a key role in the evolution of Korea’s merger industry as they fuel demand for acquisitions and provide liquidity needed for the deals, Ahn said.