Cayman remains top offshore M&A jurisdiction

Simon Raftopoulos

The Cayman Islands was once again the busiest offshore jurisdiction for mergers and acquisitions in the first six months of 2019, accounting for 38% of all M&A transactions and 42% of total deal value across the offshore region, offshore law firm Appleby reported.

“The Cayman Islands 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,” said Simon Raftopoulos, partner and group head of Appleby’s private equity practice in the Cayman Islands. “Cayman companies were the targets in four of the 10 largest offshore deals, making the jurisdiction one of only a few to see total deal value rise when compared to the previous six months.”

Simon Raftopoulos

While the first half of 2019 saw a decline in multi-billion megadeals across the offshore region, one significant outlier was the sale of a 2.8% stake in Cayman-incorporated e-commerce giant Alibaba by West Raptor Holdings LLC, a wholly owned subsidiary of Softbank, for approximately US$11 billion. 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.

In total, Cayman recorded 570 deals, worth a cumulative $50 billion in the first half of 2019. While the number of deals was down when compared to the second half of 2018, the dollar figure represented a 28% increase.

Appleby’s Offshore-i report provides M&A transactional data for the major offshore financial centres during over the first six months of 2019. 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.

There were 1,514 transactions recorded across the offshore region in the first half of 2019 for a value of $120.4 billion.

Cameron Adderley

“The 10 biggest offshore deals this year reflect the more cautious environment we’re seeing in 2019,” said Cameron Adderley, partner and global head of corporate at Appleby. “Last year, the 10 largest deals were each worth well over $4 billion but there have only been three of that size so far this year. 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.”

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.

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