M&A in action I info exchange io What's NewS Issue 2 March 2000 Anyone reading through the deals sections in recent issues will have noticed the growing number of M&A transactions. We've been asking the people behind the M&A network for their take on what's happening in some of our markets. Changing hands One step ahead Juicy business Consolidation chains At a European general managers' conference in Paris earlier this year, our Global Mergers Acquisitions peo ple provided a thorough overview of their goals, product offering, capabilities and target customers among other key issues Frankfurt's M&A team. fltr: Stephan Hackenberg, Martina Rohdenburg, Sven Günther, Detlev Stroech and Rudi Strittmatter in what is a highly bouyant market. Obvi- ously, this is not exclusively a European phenomenon. But it showed that Global M&A was very much back on track and getting on with its priority business following a period of some uncertainty. It is almost a year ago since the M&A team met in the UK to fine-tune strategy and get the show firmly on the global road. In the meanwhile, changes in organization (the SRT process and later the joint venture announcement) had clouded future goals to some extent. However, the number of deals coming out of Global M&A these days proves that the basic strategy is sound and working effectively at rnany levels - as it was designed to do. 'We have always seen our role as a niche player in a global environment,' explains Brian Havill. 'That is the only way to differentiate our services, expertise from what is on offer from just about every other financial institution. And if we are a global player, then we need a global network so we can offer our specialized services to defined market sectors.' (See sidebar.) Many of the deals we've covered in this and recent issues of What's NewS are perhaps the best illustration of what Havill means. if you take the food sector,' he says, 'you will see that many companies are changing hands. There is a lot of pressure on producers to consolidate gener- ated by retail concentration. And there are few, if any, other banks which can talk with these cus tomers about their business with any real knowledge. Just look at the deal done by the Sydney office in the poultry sector (see page 7), or the 3i venture capital com- pany's acquisition of Target Worldwide Express in that often under-recognized transport and logistics sector. And because we have this level of expertise in our selected niche markets, we find corporates like 3i asking John Cripps and his team to look at their whole food portfolio.' Although Global M&A has teams in many individual European countries, cross-border business re- mains a priority. And that does not exclude deals outside of national boundaries. Says Rudi Strittmatter, who heads up M&A in Frankfurt, 'Basically, our goal is to strengthen the network so that we can stay at least one step ahead of our cus tomers. To do that, everyone has to con- tribute to and needs feedback and input from our global network. Clients expect it and we're doing all we can to make it happen.' The Frankfurt team has been working on establishing close ties with a number of other countries, including close neighbours. Says Detlev Stroech, 'We've already set up working relations with all RI regional offices. I think we're trying to live the global network here in Germany.' And it is paying off. By maintaining close ties with other RI teams and with existing strategie alliance partners (including Unico), Frankfurt's M&A activities often produce juicy deals. Take the Eckes- Granini acquisition of Finnish OY Marli Group's juice business in the domestic market, Scandinavia, the Baltic States and Russia which was signed recently. 'We heard that Marli was interested in divesting this activity from colleagues at Okobank - the Finnish cooperative - via the team in the Netherlands,' recalls Stroech. 'We followed up because Eckes- Granini is a major player and a core cliënt in this sector and we prefer to go to them with a live prospect, rather than simply turning up periodically with a pitch on what we could do for them if they find an interesting deal for themselves.' As it turned out, this was one opportunity Eckes-Granini had not identified them selves. The Frankfurt team was subse- quently able to advise on the initial 20%- stake taken by the German juice company in Marli's dedicated business unit. After two years, Eckes-Granini can exercise an option for the remaining holding. While this may not rank as one of the world's biggest F&A deals, it is certainly indicative of how Global M&A is operat- ing in its niche sectors. 'If you look at the London's M&A team. back: Christoph Friedrich, Robert Rattray, Michael Bourke, Nic Thum, Ftenrik Tuxen front: David Craig, Gerard Gregg-Smith, John Cripps, Andrew Robinson German market today,' says Frankfurt's Stephan Hackenberg, 'you see that around 15 years ago, the retail sector began con- solidating. The producers/manufacturers did not follow that trend at the time and are only now catching up. They were able

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