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  • News - EY - Distress and divestments to dominate mining deals in 2016 - EY - Global
    Your development Life at EY Joining EY Global Delivery Network Alumni Home Newsroom Distress and divestments to dominate mining deals in 2016 Distress and divestments to dominate mining deals in 2016 London 4 February 2016 Newsroom News releases PR contacts PR activities Analyst relations Fact and figures Share Financial distress among mining and metals companies will shape merger and acquisition M A activity in the sector in 2016 with divestments expected to pick up pace on the back of volatility and uncertainty on the timing of a recovery according to a new EY report released today The report A new normal or the bottom of the cycle Mergers acquisitions and capital raising in mining and metals 2015 trends and 2016 outlook notes that after the fifth consecutive year of declining deal volume and values increasing levels of financial distress will trigger more divestments spin offs joint ventures and possibly hostile takeover bids The report warns that with a glut of assets scarcity of capital selective buyers and market conditions forcing accelerated sales getting divestment processes right will be paramount to achieving a sale for even the best quality assets Lee Downham EY Global Mining Metals Transactions Advisory Leader says A company s positioning on the cost curve is critical in the current market conditions so presenting robust information to potential buyers is pivotal in order to provide confidence that cost reduction and productivity measures are sustainable Similarly anticipating transaction risks such as separation and regulatory and joint venture approvals take on greater importance in this market Prospective buyers are thin on the ground and they will reduce valuation or even walk away if these issues aren t adequately addressed Overall mining and metals deal volume globally in 2015 sank to the lowest level since at least 2000 with just 358 deals completed Excluding the US 8 7b BHP Billiton demerger of South32 overall deal value globally dropped to US 40 0b with a strong bias to domestic deals and assets in developed markets Downham says Perhaps the greatest concern within the industry is that nobody is sure how long the current downturn is going to persist and companies cannot sit back and wait for an improvement in market conditions This is forcing many corporates to downsize portfolios and be pragmatic on valuation which in turn will create deal activity Key transaction trends expected in 2016 More deals will be completed by private capital but only the best assets will attract their focus and pricing will remain disciplined Deferred consideration will grow in popularity due to limited buyers and extreme price uncertainty Spin offs as a means to package and divest assets have increasingly been featured in boardroom discussions and will remain high on the strategic agenda but the level of working capital required will see few actually completed Increasingly mergers and joint ventures will be pursued with the key focus on de risking and preserving capital The necessity to de risk and preserve capital will drive deals to completion Ongoing

    Original URL path: http://www.ey.com/GL/en/Newsroom/News-releases/news-ey-distress-and-divestments-to-dominate-mining-deals-in-2016 (2016-02-10)
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  • News - EY - Industry distress to fuel oil and gas transaction activity as crude price dives - EY - Global
    will drive transactions in 2016 after global deal volume and value fell short of expectations in 2015 dropping by 33 and 17 respectively year on year EY s Global oil and gas transactions review 2015 finds that deal volume was down in nearly all sub sectors in 2015 compared to 2014 most notably in oilfield services OFS where deal activity decreased by almost 40 from 320 to 193 and in upstream where deal volume dropped from 1 467 in 2014 to 910 in 2015 a 38 decline Deal value was similarly depressed across most sub sectors with OFS leading the pack with a 63 decline from 2014 Total value did however increase by 57 in the downstream sector following a number of sizable transactions involving refining assets in the US Andy Brogan EY Global Oil Gas Transaction Advisory Services Leader says Declining crude prices coupled with an uncertain outlook challenged transactions in 2015 Now with greater consensus around a lower for longer outlook shrinking the valuation gap between buyers and sellers we ll likely see more deals come together this year Companies that have shown resilience amid US 40 to US 50 per barrel of oil are beginning to face insurmountable distress as the price sinks below US 40 All signs point to a more opportunistic market for M A activity Portfolio optimization to continue Upstream companies are pairing their ongoing focus on cost cutting with high grading their portfolios This may lead to a consolidation of ownership around core assets as companies seek to increase control over their overall capital outlay and maximize opportunities to use their operational capability to deliver value That consolidation will also cascade into the OFS sector Brogan says Excellence in operational and project execution remains essential not only to success but to survival in the global oil and gas sector The traditional energy business model has been forced to flex to a new resource abundant world Mega mergers and follow on M A activity Consolidation which began in 2014 with several megadeals will continue this year with significant follow on activity as merged companies are forced to sell businesses following regulatory pressures Brogan says Large scale consolidation presents many challenges due to the complexity of businesses involved and anti trust issues that arise Megadeals are most likely to emerge in the upstream space with OFS companies following suit in order to meet new demands Vertical integration Vertical integration is also high on the agenda for OFS companies seeking to build full service delivery capabilities to meet operators increasingly demanding price and delivery expectations There s an opportunity for equipment manufacturers as well to acquire suppliers and recover aspects of the value chain traditionally outsourced to low cost regions like China and India Deployment of private capital Renewed interest from a wide range of financial players not only distressed funds but also private equity firms family offices and infrastructure funds have been increasingly active in the sector Depressed oil prices will continue to unearth opportunities

    Original URL path: http://www.ey.com/GL/en/Newsroom/News-releases/news-ey-industry-distress-to-fuel-oil-and-gas-transaction-activity-as-crude-price-dives (2016-02-10)
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  • News - EY - Private equity funds and investors view data and digital solutions as the keys to winning the regulatory and reporting game - EY - Global
    conducted in collaboration with Private Equity International finds 47 of private equity funds have faced a regulatory audit or examination in the past two years compared to 41 in 2014 and 28 in 2013 The increased regulatory focus has led investors to request more information from funds and 45 of investors surveyed say fund managers can improve their reporting compared to 11 in 2014 a 400 increase Scott Zimmerman EY Americas Private Equity Assurance Leader says This regulatory disruption has caused a seismic shift in the private equity industry as investors and regulators demand better information more quickly To magnify the problem the reporting processes of private equity funds are still manually intensive placing more burden on CFOs and their finance teams Forward looking funds will need to make investments to enhance their data management capabilities to successfully address the regulatory burdens that did not exist even five years ago Arleen Buckley PEI Director of Americas Events adds Today s private equity CFO is at the helm of a vastly more complex organization than a decade ago and is tasked with ensuring that all key stakeholders whether they are the general partner limited partner or regulator are satisfied Transparency and timeliness are critical but reporting is a manual process With the advent of new reporting regimes 77 of investors surveyed say private equity funds could improve the transparency of their reporting while 60 say timeliness is critical Despite the demand for increased speed and transparency of reporting CFOs surveyed are reliant on manual processes and spreadsheets to handle critical tasks such as valuation 68 portfolio analytics 58 and risk management 41 Zimmerman says The prevailing thought is that digital solutions will help solve the reporting dilemma However such technology architecture does not yet exist and it will not hold all the answers Ultimately the only way for private equity funds to break through these barriers is to invest in a fundamental overhaul of their manual intensive people focused operating models Funds seek new talent to meet challenges While finance executives are confident they have enough people they are less confident that their people are performing the right tasks or have the appropriate competencies and capabilities the survey finds As they seek to optimize talent CFOs are looking outside the industry for new hires Employees with less than five years of experience are in highest demand reflecting the manual data management processes still dominating the current landscape with 46 of respondents recruiting talent at this level from professional services firms and 19 from within the private equity industry Thirty one percent of private equity funds surveyed recruit talent with more than 10 years of experience from professional services firms as CFOs seek more seasoned operational experience that can provide a longer term strategic view to guide the business Cybersecurity is the next top priority Investors and private equity funds are increasing their focus on cybersecurity policies and programs as funds adjust to the digital age and security incidents continue to rise

    Original URL path: http://www.ey.com/GL/en/Newsroom/News-releases/news-ey-private-equity-funds-and-investors-view-data-and-digital-solutions-as-the-keys-to-winning-the-regulatory-and-reporting-game (2016-02-10)
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  • News - EY - Divestment appetite more than doubles in 2016 with companies funding growth through strategic sales - EY - Global
    assets will be a priority in 2016 Opportunistic divesting still main reason for sale Companies who used their last divestment to fund an acquisition were most successful they were 62 more likely to have experienced a higher than expected valuation multiple on the remaining business post sale than a company that used the funds to pay down debt For companies that divested 10 of their enterprise value the markets have reacted favorably with stock prices for these companies outperforming the public index by 612 basis points more than they did in the one year period pre sale For those that divested 20 the numbers were even more favorable outperforming the previous year by 1 104 basis points Opportunistic divesting including unsolicited approaches is still the main reason for the sale with almost a third 31 of companies taking this route The survey finds that an opportunistic divestment is least likely to positively affect the remaining company s valuation multiple after the sale Paul Hammes EY s Global Divestiture Advisory Services Leader says With markets rewarding divestments that represent bold portfolio decisions and strong strategic rationale all signs point to a strong 2016 ahead That said maximizing the value of a divestment is firmly rooted in having an in depth understanding of the business s value Too often sellers leave money on the table particularly when they are enticed by unsolicited offers Access to data the biggest portfolio review challenge Forty nine percent of respondents say access to accurate and comprehensive data is a major portfolio review challenge according to the survey Patchy data is the biggest cause for divestment dilemmas with 81 of executives indicating that poor quality data makes it difficult to use analytics effectively Additionally 42 of executives say they need to apply sophisticated analytical tools to their portfolio review processes to measure performance Hammes says Information is how value is realized or lost in the age of cloud computing Internet of Things and big data You need to know your business better than anyone else Looking at what outside influences know about your company say about its good or services and how these insights might lead to growth prospects or vulnerabilities will help ensure you sell your company at the right time for the right price The survey finds that priority analytics capabilities are not areas of strength for respondents For instance 65 say their social media and customer perception analysis is very ineffective Social media is being largely overlooked but 19 of corporates expect to invest in this capability in the coming two years Disciplined approach yields success The survey findings clearly indicate that companies that divest strategically including reviewing portfolios preparing assets for sale and carefully considering how to use sale proceeds are much more likely to execute divestments that positively affect their remaining business over the long term Fifty six percent of corporate respondents say shortcomings in the portfolio review process resulted in failure to achieve intended divestment goals with 44 indicating one of

    Original URL path: http://www.ey.com/GL/en/Newsroom/News-releases/news-ey-divestment-appetite-more-than-doubles-in-2016-with-companies-funding-growth-through-strategic-sales (2016-02-10)
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  • News - EY recognized for its knowledge services - EY - Global
    Tax Performance Advisory Tax Policy and Controversy Transaction Tax VAT GST and Other Sales Taxes Transfer Pricing and Operating Model Effectiveness Strategic Growth Markets How we help Entrepreneurship EY SGM Initial public offering Venture capital Family business services Transactions About Transaction Advisory Services Corporate Development Divestiture Advisory Services Lead Advisory Operational Transaction Services Restructuring Strategy Services Transaction Support Transaction Tax Valuation Business Modelling Specialty Services Climate Change and Sustainability Services CertifyPoint China Overseas Investment Network Family Business Services French Business Network Global Business Network Japan Business Services Careers Students The EY difference Your role here Your development Life at EY Joining EY Global Delivery Network Experienced Advisory Assurance Tax Transactions Industries The EY difference Your development Life at EY Joining EY Global Delivery Network Alumni Home Newsroom EY recognized for its knowledge services EY recognized for its knowledge services New York 20 January 2016 Newsroom News releases PR contacts PR activities Analyst relations Fact and figures Share EY is pleased to announce that it has been recognized as a recipient of the Global Most Admired Knowledge Enterprise MAKE award ranking among the world s 20 leading organizations for turning internal information into business value The accolade presented to EY for the 17th time is determined by a panel of Global Fortune 500 senior executives and internationally recognized knowledge management and intellectual capital professionals The award follows EY s ongoing investment in building a leading knowledge organization through modernization of it enterprise technology capabilities and by creating an environment and culture that turns the collective knowledge of 220 000 EY employees into relevant insights that help our clients build better working businesses Uschi Schreiber EY Global Vice Chair for Markets says To be a leader in today s knowledge based economy organizations need a more sophisticated approach in order to capitalize on their unprecedented access to information Our knowledge transformation program explores new ways to tap into our collective knowledge as well as external thinking to meet the market s demand for services and solutions that differentiate their businesses The 2015 Global MAKE panel specifically recognized EY for delivering value based on stakeholder knowledge Key drivers of this include developing executing and measuring an enterprise knowledge driven strategy for increasing stakeholder shareholder value creating and managing knowledge value chains and communicating and reporting on knowledge based value creation EY was also recognized this year for its knowledge operations across several markets in Asia winning the Asia MAKE China MAKE and Hong Kong MAKE awards Schreiber says These awards underscore EY s capabilities for applying knowledge to address local issues with global relevance and for driving growth with knowledge across China and the entire EY organization Launched in 1998 the annual global MAKE survey is the leading benchmark for the world s best knowledge based organizations EY is a globally recognized knowledge leader holding 17 Global MAKE awards for its strategic investment in a dedicated global network of knowledge professionals that source analyze and distribute the latest business information as well as

    Original URL path: http://www.ey.com/GL/en/Newsroom/News-releases/news-ey-recognized-for-its-knowledge-services (2016-02-10)
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  • News - EY - Significant increase in risk from cyber breaches and insider threats among top drivers of investment in forensic data analytics - EY - Global
    fastest growing risks according to executives and are driving investment in FDA finds EY s 2016 Global Forensic Data Analytics Survey Shifting into high gear mitigating risks and demonstrating returns The survey was conducted with 665 executives globally across nine industry sectors including financial services life sciences manufacturing and power and utilities When looking at the current use of FDA tools to investigate incidents or manage risk the survey found that internal fraud risk ranks highest for the application of FDA at 77 and cyber breach or insider threat risk ranks second at 70 Sixty nine percent say that they need to do more to improve their current anti fraud procedures including the use of FDA tools Notably this figure increased to 74 for the C suite cohort Of those respondents citing regulatory pressure as the reason to improve their procedures C suite respondents were found to be the most concerned as regulatory enforcement becomes more rigorous and widespread David Stulb EY s Global Leader of Fraud Investigation Dispute Services FIDS says For organizations the threat of cybercrime is an everyday reality posing a dynamic and relentless challenge This means that boards and senior management need to incorporate FDA as a critical component of their risk management and compliance programs This is especially critical given the current regulatory enforcement environment and market reaction to instances of alleged corporate fraud bribery and cyber breach Increased FDA investment With just 55 of respondents saying that their FDA spend is sufficient a drop from 64 in our 2014 survey it is no surprise that three out of five say that they plan to spend more on FDA in the next two years When looking at the reasons for increased investment the survey found that responding to growing cybercrime risks and increased regulatory scrutiny are the top drivers at 53 and 43 respectively How FDA tools are deployed is also changing with 63 of respondents saying they invest at least half of their FDA budget on proactive monitoring activities FDA use on the rise In response to these increased risks the use of advanced FDA is becoming mainstream with new technologies and surveillance monitoring techniques widely used to help companies manage current and emerging fraud and cyber risks The rising maturity of corporate FDA efforts is also evident through the growing sophistication in their use of data Seventy five percent of respondents routinely analyze a wide range of structured and unstructured data enabling them to gain a comprehensive view of their risk environment David Remnitz EY s FIDS Global and Americas Forensic Technology Discovery Services FTDS Leader remarks Given the level of pressure organizations are facing on fraud prevention it is no surprise that the majority of respondents are expending more effort on proactive initiatives Surveillance monitoring programs utilizing FDA can help organizations to strengthen their compliance programs improving corporate culture and bolstering the confidence of regulators and other stakeholders FDA maturity leads to positive results The findings also show that there are striking

    Original URL path: http://www.ey.com/GL/en/Newsroom/News-releases/news-ey-significant-increase-in-risk-from-cyber-breaches-and-insider-threats (2016-02-10)
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  • News - EY - Sub-Saharan Africa becomes increasingly attractive to insurers - EY - Global
    English speaking markets in East and West Africa Ghana Kenya Malawi Nigeria Tanzania Uganda and Zambia The risk and opportunity matrix was created by analyzing economic conditions and potential hazards in each of the seven countries in the survey Zambia ranks first in Sub Saharan Africa in growth opportunity for insurers followed by Nigeria Ghana and Kenya Ghana offers the least amount of risk followed by Zambia and Kenya Nigeria the continent s largest economy ranks seventh in the amount of risk posed to insurers Steve Osei Mensah East and Central Africa Financial Services Advisory Leader at EY says Significant population growth rapidly rising incomes and the relatively low penetration of insurance products suggest great potential for both life and non life products in Sub Saharan Africa There are also openings for insurers to introduce innovations in motor insurance end to end mobile insurance purchases consumer education and fraud prevention While insurers will need to address challenges involving talent market volatility regulation and technological capacity among others there are opportunities for growth in the region Zambia Ghana and Kenya lead in attractiveness Zambia offers the most attractive mix of opportunity and risk over the next three years according to the research as 40 of its population lives in cities higher than any nation in the survey except Nigeria and Ghana Consolidation is helping Zambia s insurance industry grow on a firmer footing the report finds with the number of insurance brokers decreasing to 39 in 2015 from 48 in 2014 The research expects 8 5 annual growth for Ghana s insurance market between 2014 and 2018 expanding from US 400m to US 600m Just 1 in 10 Ghanaians own any kind of insurance though the country has been the focus of foreign investors who have harnessed competition among mobile phone providers to offer free insurance as a market differentiator the report finds Kenya is the most mature market among the seven countries included in the report which forecasts that its insurance market will grow to US 2 2b by 2018 from US 1 8b in 2014 Respondents from Kenya view regulatory changes and mobile underwriting platforms as potential growth drivers in the coming years the report finds Rohan Sachdev Global Insurance Emerging Markets Leader at EY says Insurance executives have reason to be optimistic about these markets As a greater percentage of the population moves to urban areas and gains affluence insurance purchases to cover health care and items such as cars are more likely The Sub Saharan economies are among the world s fastest growing and foreign investors are recognizing the opportunities these markets present GDP expansion will drive premium growth in sub Saharan Africa Despite lower oil and agricultural commodity prices and economic slowdowns in other parts of the world the Sub Saharan region s economic outlook remains strong the report finds Forty one percent of insurance executives and regulators surveyed believe GDP growth is the most important driver of future premium growth in the region Product innovation

    Original URL path: http://www.ey.com/GL/en/Newsroom/News-releases/news-ey-sub-saharan-africa-becomes-increasingly-attractive-to-insurers (2016-02-10)
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  • News - EY - International Accounting Standards Board issues a new leases standard that will affect nearly all companies - EY - Global
    Advisory Services Lead Advisory Operational Transaction Services Restructuring Strategy Services Transaction Support Transaction Tax Valuation Business Modelling Specialty Services Climate Change and Sustainability Services CertifyPoint China Overseas Investment Network Family Business Services French Business Network Global Business Network Japan Business Services Careers Students The EY difference Your role here Your development Life at EY Joining EY Global Delivery Network Experienced Advisory Assurance Tax Transactions Industries The EY difference Your development Life at EY Joining EY Global Delivery Network Alumni Home Newsroom International Accounting Standards Board issues a new leases standard that will affect nearly all companies EY comments International Accounting Standards Board issues a new leases standard that will affect nearly all companies EY comments London 13 January 2016 Newsroom News releases PR contacts PR activities Analyst relations Fact and figures Share The International Accounting Standards Board IASB today issued its leases standard that will require lessees to recognise all leases on their balance sheets with certain exemptions This will have the most impact on entities that have significant operating leases today such as lessees of real estate large equipment and machinery and transportation vehicles Leo van der Tas EY s Global IFRS Services Leader and Partner Ernst Young Accountants LLP Netherlands says We support the IASB s efforts to improve accounting for leases by lessees This will promote greater consistency in accounting for leases and increase comparability and transparency for stakeholders Finalising the leases standard has been one of the key focuses for the IASB in recent years and it is encouraging to see it complete this major project Many constituents raised concerns about the cost and complexity of implementing the IASB s 2010 and 2013 proposals Although the new standard will require lessees to apply a single on balance sheet model the IASB has kept a number of key concepts the same as today and introduced recognition exemptions for short term leases and leases of low value assets Importantly accounting for lessors remains largely unchanged from current requirements Van der Tas comments The IASB has addressed some of the concerns raised by respondents about the cost and complexity of implementing the new standard However because most leases will be recognised on the balance sheet under the new standard lessees will put more focus on whether an arrangement is or is not a lease For contracts that include significant services this assessment may be challenging The leases project was a joint one between the IASB and the Financial Accounting Standards Board FASB with the latter expected to issue its new standard shortly However the two standards are not converged and a number of differences exist Van der Tas says The separate IASB and FASB standards will bring more leases onto lessees balance sheets However the differences between the standards are likely to reduce comparability between IFRS and US GAAP in respect of lease transactions compared to current standards The standard is effective in 2019 with early adoption permitted in certain circumstances For many entities preparing for transition will require

    Original URL path: http://www.ey.com/GL/en/Newsroom/News-releases/news-ey-international-accounting-standards-board-issues-a-new-leases-standard (2016-02-10)
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