Westfield merger increases M&A activity

Last updated 10:18 16/01/2014

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The value of merger and takeover activity in Australia shot up by two-thirds in 2013, led by real estate group Westfield's merging of its Australian and New Zealand assets.

Billionaire co-founder Frank Lowy announced the year's largest deal last month: the A$11.9 billion ($12.7 billion) merger of assets including shopping centres to create the new Scentre Group while splitting it from the Westfield Group and its faster growing international business.

The $A73.1b in M&A (merger and acquisition) activity in 2013 increased by 66.5 per cent on the A$43.9b in deals in 2012, according to a report from Mergemarket based on announced deals worth more than A$5m.

The 445 deals completed last year was an increase of 22.

The resources sector's share of M&A activity fell sharply but it still dominates the market, with deals in energy, mining and utilities down to 28.8 per cent from a market share of 44.2 per cent.

The value of those deals increased 8.5 per cent to A$21b.

The largest deal was APA Group's planned A$3.49b deal to take over rival gas distribution group Envestra.

A big improver was the financial services sector, where 34 deals completed accumulated A$10b and a 13.7 per cent market, more than 10 times the value of 2012's A$700m in deals.

Private equity buyouts grew for a fourth year in a row, with a 16.9 per cent share and A$12.4b value, the highest level since 2007.

The biggest private equity deal and second-biggest deal of the year behind Westfield's was the A$4.3b privatisation and buyout of Sydney's Port Botany by the NSW Ports consortium.

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