the refinancing of part of Rexel LBO debt

The Club of the thirty, which brings together the financial leaders of the major French companies listed, will present on May 19, 2010 the price of the best financial operation, for its tenth edition "Les echos" are one of the partners (1).

The preparation of this award is an opportunity for members of the Club of thirty to carry out work of reflection on the past year, and current and future of the world economic developments.

On mergers and acquisitions operations, the Club adopted three major financial operations: the acquisition of Fortis by BNP Paribas, the acquisition of British Energy by EDF and the acquisition of Razorfish by Publicis.

On financing operations, the Club has also retained three operations: Arcelor Mittal refinancing program, the refinancing of part of Rexel LBO debt, and funding for the construction of a thermal power plant in Bahrain by GDF Suez.

Beyond the obvious diversity of these operations, a number of lines of force common retained the attention of the members of the jury.

The first element is the dynamics of internationalisation that continues to be exercised, in spite or during the crisis on the major groups. Could fear a form of return of economic nationalism and territorial Balkanization of financing. It has not been so, and the race of the largest groups to global leadership positions continues. The point is observed for industrial companies, but for the sources of funding for these companies, which are diversifying geographically still more. This internationalization reveals new actors, in particular from the emerging countries and who now say as important partners, including in their modes of regulation, as regards, for example, Islamic finance.

The second point of inflection is the return of the industrial strategy of long term as the true engine of wealth creation. The sometimes excessive use of financial techniques could make believe to some that this engineering has become the main cause of value creation. This is not the case, and must be welcomed in: the most interesting operations of 2009 relate exclusively to groups that have implemented development strategies based on medium and long-term industrial targets.

The third characteristic of selected operations is that they mark a return to much more stringent financial risk management approaches:

-extension of the terms of financing for industrial groups, the exclusive remedy to the financing of short term having lived;

-diversification of funding sources, as well as regards the increased own funds rather than financial debt, as regards the balance of funding sources, between banks and markets. Markets are volatile and may be closed, but the banking crisis of 2008 has shown that too exclusive recourse to bank credit could be just as dangerous;

-better adequacy of funding for operational modalities of the operation, permitted by the establishment of sources of funding related to industrial settings of the company concerned;

-more intense participation of the modes of funding of public origin (export financing agencies, or even taken equity), who bring a commitment to long term capacity often superior to the horizons of the markets.

Finally, it sees that the crisis, as often, accelerating the mutations and strengthens economic actors the best positioned: basic industries, who benefit from the exceptional growth of the emerging continents, energy, financial services or digital.

In total, these operations are redefining the finance as an integral tool of an industrial strategy that it must be used by participating actively in the management of the risks associated with the development and growth.