Welcome to International Tax Review's M&A guide
2017. Transactional work is the bread and butter for many tax
practices, and the market has bounced back strongly to near its
pre-financial crisis levels, with 2016 being the third
consecutive year in which overall transactional volume
surpassed $2.5 billion.
However, 2016 was quieter than the record-breaking year of
2015. The overall number of deals worth more than $10 billion
was around 35% lower than 2015, with the average deal size also
lower at $115.4 million, but 'mega deals' such as the purchase
of Time Warner by AT&T, Bayer's $66 billion purchase of
Monsanto and the $52 billion merger between Sunoco Logistics
Partners and Energy Transfer Partners. Qualcomm's purchase of
NXP Semiconductors for around $47 billion became the largest
semiconductor deal on record.
Moving into 2017, British American Tobacco's $49 billion
deal to acquire the 57.8% of Reynolds Tobacco, which it did not
already own, got the year off to a strong start when the deal
was finally closed in January. The transaction made BAT the
world's largest listed tobacco company.
However, while the market has picked up in recent years, the
OECD's BEPS Project has brought new layers of complexity for
taxpayers and their advisers to consider.
Permanent establishment (PE) is a key consideration in many
of the jurisdictions covered in the M&A guide, as is the
concept of state aid in the EU and surrounding countries. The
UK's exit from the European Union has created shockwaves around
the world, particularly in the UK itself and the EU, and the
election of Donald Trump has thrown the long-awaited US tax
reform into uncertainty, as companies are left to speculate on
what form the new system will take.
There are also a multitude of domestic tax law changes, some
influenced by BEPS, which are examined in the pages of this
guide. I hope that you will find it informative to your
decision-making when carrying out deals in the coming year.
International Tax Review