2019 h1

Uncertainty is the operative word for 2019. Uncertainty surrounds trade agreements, growth forecasts, interest rates and political manoeuvring. This uncertainty about the future bleeds into the world view, feeding stock exchange swings, currency fluctuations, IPO valuations and ultimately, the M&A market.

Is this the calm before the storm? Or just the calm following years of economic exuberance? Theoretically, the economic fundamentals look good with low energy prices, and in most countries, low unemployment and low interest rates. However, recessions are as much about perception as they are about hard numbers.  Negative consumer sentiment stops spending, investors choose to park their money, or businesses don’t make the investments they were going to, creating a self-fulfilling prophesy.

But while recessions certainly aren’t great, they’re not usually as uncharacteristically bad as the last one. Most economists expect any new recession to be milder and shorter because household debt is lower and banks are well-capitalized.

The offshore region has a number of strengths which come to the fore at delicately balanced moments such as this. Generally stable from a political, regulatory and economic perspective, it has a renowned ability to provide swift, efficient and cost-effective solutions for international M&A deals, listings, incorporations and restructurings. It helps eliminate execution risk and has the skills and imagination to provide a wide range of methods of accessing the markets even in the face of a more challenging investment period.


Click here to listen to our Offshore-i podcast providing a review of offshore M&A insights and deal intelligence from January to June 2019.

Click here to listen to our Cayman focused podcast, discussing a number of key developments and trends seen in the jurisdiction in 2019.


Five major sectors make up the bulk of inbound offshore action:


Almost one in three offshore deals concerns the finance and insurance sector and it continues to be a cornerstone of the Offshore region, even though there have been few big-ticket deals thus far in 2019. Convex Group Ltd, a Bermuda-based property and casualty insurance company, was the sector standout, securing over USD 1 billion in funding from Onex Partners V LP.

Rationalisation is also increasingly featuring in this sector, with assets being divested to reduce risk, costs or simply because they no longer make strategic sense. Meanwhile, FinTech start-ups also continue to shake things up and blur the definition of the market.


One of the largest offshore deals in this sector was the billion-dollar restructuring of Crystal International Group, a Cayman-incorporated and Hong Kong-based clothing manufacturer. Manufacturers of high end electrical equipment and specialist motor vehicles have also been top-priced targets.


The main areas of this sector are civil engineering, construction of buildings and ‘specialised construction’ which includes plumbing, electrical and other installation activities. With a typically long-timeline in mind, especially for major infrastructure projects, the concerns about the economic outlook are curtailing demand in this sector following a strong showing last year.


The Retail and Wholesale industry is concerned with the purchase and sale of goods to public or to businesses. The rise in international trade disputes has been putting the brakes on wholesale deals, although retail action has remained steady, with stakes being taken in supermarket and shopping mall operators, as well as more niche areas such as sports shoes and jewellery. For wholesale, perfume and cosmetics was the most popular target.


One of the largest offshore deals of 2019 has been the purchase of Eaton Towers Holding, a Jersey-registered company, operating in Africa telecom masts business. The acquisition could trigger further M&A in the towers market. Towers have become tradeable assets for telecoms companies worldwide and there is much potential for consolidation. M&A in this sector has reached new highs with consistent demand for new technologies to drive strategies and expand into new or existing industries.

Top Target Sectors by Volume and Value

  • Finance & Insurance: 468 deals. USD 18bn
  • Manufacturing: 246 deals, USD 20bn
  • Construction: 89 deals, USD 15bn
  • Information & Communication: 292 deals, USD 40bn
  • Wholesale & Retail Trade: 85 deals, USD 4bn

Target Countries


Bermuda recorded a total of 246 deals over the first six months of 2019, maintaining the high level of activity that it hit in the latter half of 2018. Besides the expected hot sectors of Financial Services and Insurance, Bermuda's well-developed maritime transport industry was also busy, with lots of minor stakes being taken by asset managers.

British Virgin Islands

BVI reported a total of 226 deals thus far in 2019, a fifth less than the previous half-year period. Value did not fall nearly as sharply though, thanks to large individual deals such as the USD2bn acquisition of Luxoft Holding, the business application software developer. Mining, particularly of gold, is proving popular with small stakes and further investments being made.

Cayman Islands

The Cayman Islands is the busiest of the offshore jurisdictions, and even with deal volume down compared to the final months of 2018, the 570 deals announced so far in 2019 put it comfortably ahead of all other locations. The Information Service sector dominates here, both for volume and value, along with related interest in computer and electronic manufacturing companies. E-commerce, online platform operators, streaming and video gaming companies all feature strongly.

UK Crown Dependencies

The Crown Dependencies of Guernsey, Isle of Man and Jersey bucked the downward trend and have made a strong showing in 2019 with the Isle of Man, in particular having a busy period with telecoms and energy companies. Jersey features twice in our top largest deals of the year so far, while Guernsey has seen local deal value rise. The three jurisdictions have recorded 173 deals in total over the start of 2019.

Hong Kong

Hong Kong activity levels have dipped sharply compared to the final six months of 2018, with local political protests and China’s trade war inevitably having a knock-on effect on M&A levels. However, with 282 deals announced this year so far, it still makes a strong showing. Wholesale traders and specialized construction firms feature highly alongside investment holding companies. The Hong Kong Stock Exchange continues to be a magnet for the IPOs of other offshore companies.

Mauritius & Seychelles

Mauritius and Seychelles also saw declines in activity levels, although there were deals to be had in sectors ranging from air transport to fertiliser manufacturing.

Acquirer Deals

The offshore region works as a place for transactions to smoothly occur and consequently sees a lot of activity as an efficient base for an acquisition or investment to be made from. The stable regulatory and legislative environment offshore supports strong deal flow. So far in 2019, there have been 1,589 deals announced with a cumulative value of USD124bn, both totals slightly ahead of the amount of inbound action.

There have been a number of multi-billion dollar deals into a range of businesses including real estate, hospital management, satellite telecoms and airline catering. Bermuda was a particularly popular base, with levels of outbound activity considerably higher than last year including one of the largest offshore acquisition deals of 2019 to date; the USD2.2bn purchase of Vivat NV, the Netherlands-based insurance provider. Following intense interest, the company was eventually acquired by fellow Dutch insurer NN Group partnering with Bermuda’s Apollo Management, via Athora Holding.

The targets of these acquisitive offshore companies were spread across 62 different countries. China, the UK and United States are receiving most attention but there has also been considerable focus on the major Asian and Oceania countries. India, Japan, Singapore and Australia all feature heavily and there have also been large individual deals focused on Western Europe.

Information and communication firms continue to dominate as the main target sector, with investment funds and banks keen to take stakes in these potential fast-growth companies. Financial Services companies have been busy on both sides of the deal. With poorly performing divisions now disposed of, and capital positions and new regulations accounted for, many finance houses are in good shape and busy making acquisitions and investments.

Initial Public Offerings

Some companies are waiting for geopolitical uncertainties to pass, and IPOs worldwide are down on 2018 levels. High profile erosion of value in some recently listed technology companies has also underlined the difficulty in correctly pricing unique new enterprises but nevertheless, IPOs continue to offer an attractive route for many companies to raise money.

The offshore region saw 144 companies announce their intention to list on an exchange. The top sector for announced offshore IPOs was information services, with data processing companies hoping to use the extra investment to increase market share in this rapidly-evolving field.  Manufacturers of electronics and machinery have also been busy issuing prospectuses, hoping to fund product development and enhance operating capacity.

An interesting new development has been the growing popularity of Special Purpose Acquisition Companies (SPACs). These are vehicles that raise funds through an IPO and then deploy them once the right target is identified. These ‘blank cheque’ companies often incorporate in Cayman or BVI before listing in the US and 2019 looks set to be a banner year with both volume and amounts raised powering ahead of previous years.

IPOs may decline in the face of stock market and political volatility, but the offshore region has already facilitated a number of Direct Listings (for example Flex LNG in Bermuda) which are a viable alternative option. Well-prepared companies, with the right equity story, will continue to make the leap to public listing when the timing is right.

Key Contacts

James Gaudin

Managing Partner: Jersey

T +44 (0)1534 818 337
E Email James

Jeremy Berchem

Office Managing Group Partner*: Guernsey

T +44 (0)1481 755 601
E Email Jeremy

Tim Faries

Partner: Bermuda

T +1 441 298 3216
E Email Tim

Jeffrey Kirk

Managing Partner: BVI

T +1 284 393 5318
E Email Jeffrey

Garry Manley

Partner: Isle of Man

T +44 (0)1624 647 638
E Email Garry

Malcolm Moller

Group Managing Partner: Mauritius, Seychelles, Shanghai

T +230 203 4301
E Email Malcolm

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