ERM Annual Review 2008 - (Page 13) China National Offshore Oil Corporation Performing EHS due diligence assessments for sites in China. Windy Zhang, Shanghai, China Macquarie UK Broadcast Holdings Ltd Pre-acquisition due diligence of National Grid’s UK wireless business. William Butterworth London, UK Riders of the Storm 2007 was a year of contrasting halves. The first was characterized by transactions fueled by easy credit; the second by credit at a premium, or not available at all. Yet ERM’s corporate clients have remained remarkably active. However, a climate of caution has developed and there has been a change of emphasis as new concentrations of M&A activity emerge. Private equity deals have fallen sharply as banks tighten lending conditions. But this withdrawal has created an opportunity for strategic buyers who are finding themselves in a less competitive environment, and able to pursue small to mid-cap companies across a range of sectors. Recently, we supported the acquisition of US-based General Chemical Industrial Products Inc soda ash business by India’s Tata Chemicals Ltd. Focus on Assurance With the prospect of margins being squeezed and credit conditions tightening, organizations and banks are taking a longer, harder look at Environmental, Health and Safety (EHS) issues at the outset of deals. Rather than simply checking off compliance items there is a growing desire to look beyond legal requirements and behind the scenes at both the cost of EHS assurance systems and analyzing the processes which support compliance. Commodity and Energy Opportunities General Cable Environmental due diligence of 14 facilities for acquisition of Phelps Dodge International. Greg Merritt, Rolling Meadows IL, US Clients in the resources, agribusiness and power generation sectors are increasingly requesting EHS due diligence services. This is due to emerging opportunities and risks, created by rising commodity prices and growing energy demand. Deals are typically characterized by acquisition, expansion, reopening closed facilities and the sale of stateowned assets. Activity in the power generation sector has been particularly prevalent across Asia, where deals related to alternative energy sources such as nuclear, geothermal, wind and even waste-to-energy facilities are increasing. Consequently, we are seeing investors take a more aggressive approach to entering new markets. Vertically integrated Japanese Trading Houses have outgrown their domestic market. Although they have a stronghold in Asia Pacific, they are actively looking for mining, oil & gas and other energy opportunities in new regions and emerging markets. Recently, we helped Mitsubishi Corporation conduct EHS due diligence in Europe for an oil field in the North Sea. � ERM Annual Review 2008 13
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