The Mergers & Acquisitions Review - Seventh Edition: Chapter 13 - British Virgin Islands

I OVERVIEW OF M&A ACTIVITY -

British Virgin Islands (BVI) companies are employed in geographically diverse corporate structures, with the effect that challenging global economic conditions have continued to dampen the mergers and acquisitions environment involving BVI companies. Following global trends, impacted by the persisting eurozone crisis and slowing Chinese growth, BVI M&A activity in 2012 lagged slightly behind 2011 levels and remained some way below deal volumes prior to the onset of the global financial crisis. During the 12 months ending 31 December 2012, 641 completed M&A transactions involving BVI companies were reported, a decrease of 13 per cent from the number of reported transactions completed during the prior year period. Total deal value for completed M&A transactions involving BVI companies fell from US$45.8 billion in 2011 to US$32.9 billion in 2012, remaining some distance short of the US$50.8 billion volume of reported transactions completed in 2007, at the height of the pre-credit crisis global economy.

Measured by the number of completed reported transactions, M&A activity

involving BVI companies contracted further during the first quarter of 2013, when 156 deals were completed, representing a 5 per cent decline in the number of reported BVI M&A transactions completed in the same period in the previous year and an 8 per cent fall in the number of transactions completed in the fourth quarter of 2012. Meaningful comparisons of BVI M&A activity by dollar volume during the first quarter of 2013 are affected by the completion, in March 2013, of Rosneft’s US$55 billion takeover of the BVI company TNK-BP, a single transaction whose value was greater than the total BVI deal volume in 2012. Although anomalous for statistical purposes, Rosneft’s acquisition of TNK-BP stands out as a bright spot in the modern BVI M&A landscape, and serves as a fitting signal of the increasing importance of the BRICS economies to the continuing strength of the BVI as a corporate domicile.

Originally published in The Mergers & Acquisitions Review - August 2013.

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