* U.S. acquisitions in emerging markets up 94 pct
* M&A in Russia 19 pct of BRIC M&A in 2010
By Megan Davies and Michael Erman
NEW YORK, Dec 2 U.S. companies have spent
nearly double the amount buying assets in emerging markets than
they did in 2009, as they seek out economies offering faster
growth than at home and try to use up large cash reserves.
Including a PepsiCo Inc (PEP.N) deal announced on Thursday
to buy a stake in Russia's Wimm-Bill-Dann LMLKI.RTSWBD.N
[ID:nLDE6B119G], the volume of U.S. acquisitions in the
emerging markets totals $23.8 billion so far this year, up 94
percent from all of 2009, according to Thomson Reuters Deals
Pepsi's acquisition ranks as the biggest nonfinancialU.S./emerging markets deal on record, Thomson Reuters figures
"Given the prospect for low growth in the major markets,
companies need to look for growth wherever they can find it,"
Francis Aquila, a partner at law firm Sullivan & Cromwell, said
in an email.
According to the IMF, the U.S. economy is projected to grow
just 2.6 percent this year. IMF projections show much faster
annual growth from the so-called BRIC countries -- with Brazil
at 7.5 percent, Russia at 4 percent, India at 9.7 percent and
China at 10.5 percent.
Energy and mining assets have long been attractive targets
in the emerging markets as their investments have been driven
by the location of resources.
But these countries have also started to take on a larger
role for consumer and pharmaceutical companies that have
reached saturation point in their home countries.
"As these countries continue to develop and develop a
middle class and a consumer class, they are going to be markets
that look attractive to foreign companies," said Morton Pierce
of Dewey & LeBoeuf.
Other significant deals struck this year by U.S.
corporations buying emerging market assets include Abbott
Laboratories' (ABT.N) $3.7 billion deal in May to buy the
branded generic drugs operations of India's Piramal Healthcare
Ltd (PIRA.BO) after beating competition from Western rivals.
"Certainly to the extent that people are looking to expand
and are reluctant to do that here, that's an impetus to look
outside the United States," said Pierce.
In addition to a rise in investment in emerging economies,
there has been an increase in cross-border deals. Worldwide
cross-border M&A totals $843.2 billion so far this year, up 54
percent from 2009, the data shows. Cross-border M&A accounts
for a greater share of worldwide activity this year -- 39
percent compared with 27 percent last year.
"There is more cross-border M&A, but the story to me is
really that cross border does not include anymore the EU or
U.S.," said Oliver Brahmst, head of M&A at law firm White &
Case. "I bet that the lion's share of cross-border M&A work
does not involve a U.S. or E.U. border."
Acquisitions of Russian companies by overseas firms has
more than doubled from the previous year, Thomson Reuters data
The Wimm-Bill-Dann deal is one of the biggest foreign
investments in Russia outside the energy sector. French
carmaker Renault SA (RENA.PA) paid $1 billion for a 25 percent
stake in Russian carmaker AvtoVAZ (AVAZ.MM) in early 2008 and
has pledged more investment in the form of technology.
Coca-Cola Co (KO.N) bought Nidan, Russia's fourth-largest
juice maker, earlier this year. [ID:nLDE6731ZM]
(Editing by Andre Grenon)