| NEW YORK, March 26
NEW YORK, March 26 Mergers and acquisitions
activity among developed and emerging markets fell to a record
low in 2013, dropping 17.3 percent versus the prior year due to
still fragile economic growth and rising political unrest, a new
survey showed on Tuesday.
U.S. companies, while still chalking up the most purchases
of emerging market assets, saw their M&A activity shrink last
year with 220 deals completed versus 226 in 2012, according to
audit, tax and business advisory services firm KPMG.
In its latest High Growth Markets Tracker study, the deal
flow globally among developed and high-growth economies, or
emerging economies, fell to 1,682 transactions last year versus
2,033 deals in 2012.
The second half of last year saw 810 deals completed, the
fewest number of M&A deals involving emerging market companies,
either as a target or a buyer, in any six-month period since
KPMG started compiling the study in 2005, the data showed.
The number of deals completed by U.S. companies fell to 98
in the second half of last year versus 122 in the first six
months of 2013, marking the fewest number of U.S.-led purchases
in any six month period since the survey began.
"With economic growth slowing and political unrest in some
emerging markets, companies in developed markets are shying away
from cross-border acquisition targets," Mark Barnes, national
leader of KPMG's U.S. High Growth Markets practice said in a
"Although regions such as Central America and Europe present
access to new consumer populations, and additional growth
opportunities exist in other fast-growing emerging markets,
investors are playing it safe by staying on the sidelines for
now to avoid the risks associated with expanding their
organizations' global footprint," he said.
Three broad categories of M&A activity were tracked by KPMG
using Thomson Reuters data: developed market acquirer's of
emerging and high growth market assets and vice versa; and
acquisitions of one emerging and high growth market company by a
peer in another emerging and high growth market.
Globally, the study showed, emerging market companies
increased their purchases of developed market assets by seven
percent in the second half of last year with 190 deals completed
versus 177 deals in the first six months of 2013.
However, on a full-year basis, acquisitions of developed
market companies by emerging market firms fell 20 percent in
2013 versus 2012.
"U.S. companies remained the most popular targets for
emerging and high-growth market companies with 36 acquisitions
made in the United States in the second half of 2013, up from
the 33 deals completed in the first half of 2013," KPMG said.
The United States remained attractive to investors because
of a perceived stability of the North American market and
predictable growth in the region, Barnes noted.
Developed market firms targeted the emerging market regions
of South and East Asia firms the most for acquisitions with 81
deals completed, followed closely by Central and Eastern Europe
with 79 transactions done.
Russia remained the leading acquirer of emerging market
assets with 28 deals.
A deal was considered in the survey if an acquirer took at
least a 5 percent shareholder interest. However, deals that
involved backing by government, private equity firms or other
financial institutions were excluded.
The research analyzed deal flows between 15 developed
economies or groups of economies and 13 high-growth economies or
groups of economies.
(Reporting By Daniel Bases; Editing by Ken Wills)