PB Annual Report 2013-2014
A major new global privatization wave is forming. During the three-year period January 2012-November 2014, governments around the world directly or indirectly divested assets worth more than one-half trillion dollars ($544 billion); since January 2009, the global privatization total exceeds $1.1 trillion, far more than any comparable period since Margaret Thatcher launched the modern era of privatization in 1979. Furthermore, there is evidence that this global wave may even be gathering force, as several important countries – China, Australia, Turkey, Greece, Portugal, Italy, and the nation that started it all, Great Britain – are either launching major new divestment programs (worth A$100 billion in Australia’s case) or have hit full stride with programs launched earlier this decade. This Report describes global privatizations during 2013 and the first 11 months of 2014, with emphasis on those in the European Union; it also presents three articles contributed by outside experts that highlight specific national and industrial programs.
“Privatization Trends and Major Deals of 2013 and 2014” details major privatization deals executed during 2013 and the first eleven months of 2014 and surveys trends shaping the privatization landscape worldwide. We document several important facts, including the following: (1) Governments raised $193.7 billion (€146.2 billion) through privatization sales worldwide during 2013, higher than the $189.4 billion (€145.7 billion) total for 2012 and the third largest total on record; (2) The global value of privatizations through November 2014, $163.2 billion (€116.9 billion) implies that the full-year 2014 total will make this the fourth or fifth highest year on record – and the acceleration of large deals during 4Q2014 suggests an acceleration in worldwide divestments in 2015 and beyond; (3) Share issue privatizations (SIPs) accounted for over three-fourths (77.0%) of the 2013 total, and nearly 90% (89.5%) of the 2014 total, while auctions, targeted stake sales, share repurchases and asset sales accounted for the rest; (4) China was, by far, the leading privatizing country during both 2013 and 2014, raising over $40 billion (about €30 billion) both years – almost two and a half times the next leading country during 2013 [UK, $ 16.3 billion (€12.2 billion)] and over three times the second leading country in 2014 [Hong Kong, $12.5 billion (€9.4 billion)]; (5) The $67.4 billion (€50.1 billion) and $59.7 billion (€43.64 billion) raised by EU governments during, respectively, 2013 and the first eleven months of 2014 represented 34.8% and 36.6% of the respective global annual totals, almost twice the 19.9% of the worldwide total EU governments accounted for during 2012 and much closer to the long-run average EU share of 44.6%; (6) There were a significant number of failed, withdrawn, and cancelled privatization sales during 2013 and 2014 (through November), but these represented a much lower proportion of attempted sales than was the case in earlier years – especially 2011, when over one-fourth of all privatizations attempted were withdrawn or cancelled; and (7) The large number (128) and value [$50.8 billion (€39.6 billion)] of privatizations executed during the five-month period July-November 2014, coupled with several massive planned sale announcements, suggests that a major new global privatization wave is in process, and may be accelerating.