Emerging companies ramp up M&A activity

Companies from the BRIC nations
(Brazil, Russia, India and China)
are catching up with their developed
economy counterparts when it comes to mergers and acquisitions activity,
according to KPMG’s Emerging Markets International Acquisitions Tracker.

During the first six months of 2007, there were 67 emerging-into-developed
deals taking place, against 126 developed-into-emerging transactions, the firm
It also revealed that a total of 119 emerging-into-developed deals took place in
2006, whereas there were 322 completions of the reverse kind.

Analysis of deal flows between nine selected emerging economies and eleven
key developed markets found that companies from countries such as the BRIC
nations are fast closing the gap on their counterparts in developed nations in
terms of cross-border acquisitions.

Ian Gomes
chairman of KPMG’s new and emerging markets practice in the UK said: ‘Four years
ago, the emerging-into-developed deals were outnumbered by four to one. By the
end of 2006, that ratio was down to just under three to one, and already in the
first half of 2007, that gap has narrowed even further, with the ratio now being
less than two to one. This begs the question as to when one will overtake the
other? Certainly looking at current trends, it’s feasible that this crossover
could happen within the next two to three years.’

Further reading:

The next big thing

Statistical analysis: wake up call

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