The Cayman Islands was once again the busiest offshore jurisdiction for Mergers and Acquisitions (M&A) in the first six months of 2019, according to offshore law firm, Appleby.
Appleby, one of the world’s leading international law firms, reported that Cayman accounted for 38 per cent of all mergers and acquisitions transactions and 42 per cent of total deals valued across the offshore region in the first six months of 2019.
Appleby’s Offshore-i report, which provides M&A transactional data for the major offshore financial centres during over the first six months of 2019, showed that in total, Cayman recorded 570 deals, worth a cumulative US$50 billion in the first half of 2019.
The country had a particularly strong start to 2019, with the number and value of deals involving local targets far outpacing other offshore jurisdictions in the first six months of the year. Appleby said Cayman companies were featured in four of the 10 largest offshore deals, making that jurisdiction one of only a few to see total deal value rise when compared to the previous six months.
While the first half of 2019 saw a decline in multi-billion megadeals across the offshore region, one significant deal this year was the sale of a 2.8 per cent stake in Cayman-incorporated e-commerce giant, Alibaba by West Raptor Holdings LLC, a wholly owned subsidiary of Softbank. The sale price was approximately US$11 billion.
“…these megadeals typically originate from China or the US and have been curtailed largely in the face of trade wars, risk uncertainty and national security issues.”– International law firm, Appleby
Cayman was also home to one of the largest offshore deals in the manufacturing sector, the billion-dollar restructuring of Crystal International Group, a Cayman-incorporated and Hong Kong-based clothing manufacturer. While the number of deals was down when compared to the second half of 2018, the dollar figure, however, represented a 28 per cent increase.
There were 1,514 transactions recorded across the offshore region in the first half of 2019 for a value of US$120.4 billion. The entire offshore region recorded the highest first-half transactional activity of the past five years, although deal value was down due to a rise of minority stake investments and fewer billion-dollar-plus deals.
The five sectors that made up the bulk of inbound offshore activity were finance and insurance, manufacturing, construction, wholesale and retail trade, and information and communication.
Last year, the 10 largest deals were each worth well over US$4 billion but there have only been three of that size so far this year. According to Appleby, “these megadeals typically originate from China or the US and have been curtailed largely in the face of trade wars, risk uncertainty and national security issues.”