The Deloitte M&A Index Q4 2015 2016: Opportunities amidst divergence | 7 Factors influencing M&A in 2016 Divergence in deal valuations and cash positions P/E multiples for deals in the US and Asia are well above their 15-year average, whereas in Europe they are still close to their average. European companies have access to local markets that are expected to grow faster than many other developed economies, making them attractive acquisition targets at favourable deal P/E multiples. With $1.6 trillion, North American non-financial companies, led by those in the US, have the highest levels of cash reserves in the S&P 1200 Index and this puts them in a strong position to acquire assets in Europe. The European companies in S&P 1200 have $1 trillion in cash reserves, while Asian companies have $844 billion in cash reserves. Figure 9. P/E deal multiples for US, Europe and Asia-Pacific as a target, 2000-  ˆˆ† ˆ1† 2‡† US: 2† 25 o averae 25† 2ˆ† 21† Europe: Asia Pacific: 1‡† 222 o averae 21 o averae 1† 15† 2000 2001 2002 200ˆ 200 2005 2006 200 200‰ 200‡ 2010 2011 2012 201ˆ 201 2015 YTD US Europe Asia-Pacific Averae Note: 2015 YTD refers to 16 November 2015 Source: De oitte aa ­sis base€ o €ata from T‚omso ƒe „a…er Figure 10. Cash reserves of the non-financial constituents of the S&P Global 1200 ($bn 200-1 000 00 000 00 0 00­ 00 00 0 0 0 0 Asia-Pacific Europe North America Source: Deloitte analysis based on data from Bloomberg

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