Hopes for a return of the big corporate takeover – and associated bonuses for bankers – were sparked yesterday by a clutch of deals in the US and UK led by the $16bn (£9.76bn) purchase of the makers of Jim Beam whiskey by a Japanese drinks giant.
That deal came just hours after Britain's Amec engineering group bid nearly £2bn for oil-industry rival Foster Wheeler and family-owned Tilda rice accepted a takeover by the US organic food giant Hain Celestial for £217m.
The flurry of takeovers led to big bonus expectations from the bankers advising on the deals and arranging finance. But it also rekindled hopes that, with the economy apparently picking up and interest rates remaining low, 2014 could be a bumper year for company mergers and acquisitions.
The Beam takeover saw Japan's Suntory group adding more megabrands to its growing stable of drinks. Beam owns, among other big spirits labels, Courvoisier and Canadian Club whiskies and Maker's Mark bourbon.
Suntory, which last year bought GlaxoSmithKline's Ribena and Lucozade brands for £1.4bn, distributes many western whiskies in Asia, including Canadian Club and Laphroaig. But it does not own many western spirits outright, focusing thus far on Japanese brands. Super-low interest rates in Tokyo fuelled the deal, analysts said.
Meanwhile, Amec is also to borrow heavily from investors to fund a large part of its takeover of Foster Wheeler, the Reading-based but Swiss-domiciled engineer.
Amec's bid came after it failed last year in its attempts to buy German rival Kentz in what would have been an £800m takeover. While Foster Wheeler is a bigger bite, Amec is making it more digestible by paying part of the price in shares. If the deal goes ahead, Foster Wheeler investors would end up with a 23 per cent stake in the combined business.
Tilda's owners, the Thakrar family, are reported to have agreed about £217m in cash and Hain Celestial shares to hand over control of their business.
The Thakrars came to the UK from Uganda, fleeing persecution from Idi Amin in the early 1970s. Patriarch Vipul Thakrar established what was to become a hugely successful basmati rice importing business. At first it primarily catered for British Asians, but the growing popularity of curries meant it quickly spread to the mainstream.
Now dubbed the "Rice Kings" in the food industry, they run a global empire exporting across the world.
The advisory firms in London set to share sizeable bonuses from yesterday's deals include Rothschild, which advised the Thakrar family, Goldman Sachs and JP Morgan, advisers to Foster Wheeler and Bank of America Merrill Lynch for Amec. In the US and Japan, bonuses from what was the third-biggest foreign takeover for a Japanese company, will be shared between Mitsubishi UFJ Morgan Stanley on the Suntory side and Credit Suisse and the specialist firm Centerview Partners for Beam.
Centerview's involvement was just the latest example of a specialist boutique being chosen over a giant investment bank for specialist takeover advice. It was set up by takeover titan Blair Effron, formerly of Dillon Read/UBS.
Potential UK takeover: Targets for 2014
Weir Group (engineering)
Smith & Nephew (medical)
Tullow Oil (exploration)
Source: Killik & CoReuse content