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  • Capital Insights Helping businesses raise, invest, preserve and optimize capital

    H 1

    20 16

    Auto ambition

    Innovation in the automotive sector pushes M&A into a higher gear

  • Helping businesses invest, optimize, preserve and raise capital

    EY Capital Agenda

    Leading businesses are adopting a range of disciplines in four key areas to build competitive advantage:

    Where investing capital is on the agenda, detailed consideration should be given to the strategy behind this decision, the methods under review and the assets in focus. The EY Transaction Advisory Services team provides integrated, objective advice.

    Capital Insights brings the Capital Agenda to life by investigating all four quadrants and providing expert advice from EY experts so you can evaluate opportunities, make transactions more efficient and achieve strategic goals.

    Investing driving cash and working capital, managing the portfolio of assets

    Optimizing assessing future funding requirements and evaluating sources

    Raising strengthening investment appraisal and transaction execution

    Preserving reshaping the operational and capital base

    For EY Marketing Directors: Antony Jones, Dawn Quinn Program Directors: Jennifer Compton, Farhan Husain Consultant Sub-Editor: Luke Von Kotze Compliance Editor: Jwala Poovakatt Design Consultant: David Hale Digital Innovation Lead: Mark Skarratts Senior Digital Designer: Lynn Lorenc

    For Remark Global Managing Editor: Nick Cheek Editor: Kate Jenkinson Head of Design: Jenisa Patel Designer: Vicky Carlin Production Manager: Justyna Szulczewska EMEIA Director: Simon Elliott

    Capital Insights is published on behalf of EY by Remark, the publishing and events division of Mergermarket Ltd, 4th Floor, 10 Queen Street Place, London, EC4R 1BE.

    www.mergermarketgroup.com/events- publications

    EY | Assurance | Tax | Transactions | Advisory

    About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

    EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

    About EY’s Transaction Advisory Services How you manage your capital agenda today will define your competitive position tomorrow. We work with clients to create social and economic value by helping them make better, more informed decisions about strategically managing capital and transactions in fast-changing markets. Whether you’re preserving, optimizing, raising or investing capital, EY’s Transaction Advisory Services combine a unique set of skills, insight and experience to deliver focused advice. We help you drive competitive advantage and increased returns through improved decisions across all aspects of your capital agenda.

    © 2016 EYGM Limited.

    All Rights Reserved.

    EYG no. 01471-163GBL

    ED 1016

    This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice.

    The opinions of third parties set out in this publication are not necessarily the opinions of the global EY organization or its member firms. Moreover, they should be viewed in the context of the time they were expressed.

    capitalinsights.ey.com

    On the web or on the move?

    Capital Insights is available online and on your mobile device. To access extra content and download the app, please visit capitalinsights.ey.com

    Twitter @ey_tas

    E-mail editor@capitalinsights.infoAll

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    Capital Insights from EY Transaction Advisory Services

  • Allies for growth

    Welcome note

    For more insights, visit capitalinsights.ey.com, where you can find our latest thought leadership, including our market-leading Global Capital Confidence Barometer.

    Steve Krouskos

    Global Vice Chair Transaction Advisory Services, EY If you have any feedback or questions, please email editor@capitalinsights.ey.com

    Businesses around the globe maintain a strong acquisition appetite and a growing desire to forge new business alliances to foster innovation and talent. Persistent low economic growth, digital disruption and increasing globalization are driving today’s investment decisions and acquisition strategies. Leading companies are combining dealmaking with new strategic alliances to help multiply their growth opportunities and generate higher-returns.

    Within this complex environment, digital evolution continues to challenge current business models. The automotive sector is a good example, with technology giants and automakers converging around driverless car innovations. We also see automotive companies joining forces to buy the mapping technology central to that transformation in their industry. This issue of Capital Insights highlights both the impact of FinTech innovation on automotive insurance (p 26) as well as the disruptive power of the industrial Internet of Things (p 22).

    Executives now need to plan for the possibility of multiple futures. M&A is part of that future-proofing story. It is a transformative option for re-shaping business, accelerating growth strategies and anticipating future market trends. Acquisitions offer the prospect of competitive advantage. Increasingly, we see more strategic acquisitions for talent (p 38) as companies seek to rapidly boost their skills and innovation to compete and get ahead of the game.

    At the same time, alliances are attractive as companies look for new sources of revenue and earnings while carefully managing costs and risk. Alliances can monetize underutilized assets and provide access to capabilities that are better owned by others. More and more companies are taking this option to help navigate strategic direction and optimize capital allocation in an increasingly uncertain business landscape.

    Those companies that best achieve commercial advantage through combining strategic M&A and cooperative responses to new challenges, will be best positioned to win in this disruptive new world. Buying and bonding is now a key feature of the corporate growth agenda.

    © Karl Attard

    capitalinsights.ey.com | Issue 16 | H1 2016 3

  • Contents Regulars

    06 Headlines The latest M&A news and trends.

    11 EY on the US EY’s Richard Jeanneret on US M&A in 2016.

    15 EY on EMEIA EY’s Andrea Guerzoni explores the new wave of digital disruption.

    29 EY on Asia-Pacific EY’s John Hope on the impact of China’s One Belt, One Road plans.

    47 EY on PE EY’s Jeff Bunder on how PE is going mainstream.

    50 The last word Matthew Syed on the upside of making mistakes.

    16 Exclusive interview: driving growth Capital Insights talks to PSA Groupe Peugeot Citroën CFO Jean-Baptiste de Chatillon.

    22 Disruption

    in sight How the

    industrial Internet of

    Things is set to revolutionize

    business.

    26 Driven by data

    FinTech is blurring the

    lines between the insurance,

    tech and car making industries.

    08 Transaction insights Lessons from private equity.

    12 Q&A: Trinity Consultants Discussing future growth and private equity partnerships.

    6.4b Connected things will be in use worldwide in 2016, up 30% from 2015. Source: Gartner

    Contributors: Steve Allan, Head of Human Capital, M&A, Willis Towers Watson; Andrew Brown-Allan, Marketing Director, Carrot; Jean-Baptiste de Chatillon, Chief Financial Officer and Executive Vice-President of Information Systems, PSA Groupe; John Drennan, Director of Corporate Development, Trinity Consultants; Bill Ford, CEO of General Atlantic; Charlotte Halkett, Group Marketing Actuary, InsureTheBox; Akil Hirani, Managing Partner, Majmudar & Partners; Jay Hofmann, CEO, Trinity Consultants; Leanne Kemp, CEO, Everledger; Brian Moriarty, Principal, Song Hill Capital; Lisa Moyle, Head of the Financial Services and Payments Program, techUK; Vaibhav Parikh, Partner at Nishith Desai Associates; Dan Preston, CEO at Metromile; Christopher Sullivan, Senior Associate, Clifford Chance; Matthew Syed, columnist and writer; Pavlo Tanasyuk, CEO, Blockverify; Simon Taylor, Co-Founder at 11FS; Mike Wall, Director of Automotive Analysis at IHS; Ian West, Acquisitions Director at Capita; Pete Wilson, Partner at 3i; Neil Wizel, MD First Reserve.

    © Trinity Consultants

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