Essay on Merger and Acquisitions

3963 Words Oct 2nd, 2015 16 Pages
The Rise of Emerging Markets in Mergers and Acquisitions
Developing countries are gaining strength and influence

T

he rise in the number of mergers over the past five years has been dramatic. Unlike previous merger waves, however, companies in emerging markets are playing an increasingly important role.
Indeed, while the number of majority acquisitions increased globally by 6 percent, acquisitions of established companies by emerging firms grew at an annual rate of 26 percent. Although their motives differ from traditional M&A activity, it is clear that, in the near term, emerging competitors present a potential threat to companies in developed countries.

Mergers and acquisitions have become a staple of
newspaper
…show more content…
Companies need the appropriate levers if they are to maintain their positions in the market.

Asian Countries Lead the Developing World
Companies from India, Malaysia and China are at the forefront of M&A activity in developing nations. Together, these three nations accounted for 56 percent of the deals that took place from

The Rise of Emerging Markets in Mergers and acquisitions

1

Figure 1
An increase in deals between developing and developed countries

Global majority acquisitions

Majority acquisitions between developing and developed countries

CAGR = 6%

CAGR = 19%

25,377
902

23,576

925

1,113

1,522

1,901

2,168

2002

22,496

2003

2004

2005

2006

2007

19,413

18,705
17,096

Majority acquisitions within either developed or developing countries
CAGR = 5%
20,974

2003

2004

2005

2006

2007

1

2

2006

16,170

2002

2003

2004

Sources: Dealogic; A.T. Kearney analysis

2002 to 2007 (see figure 2). While India is spearheading the acquisitions market, Malaysia is a surprising second—primarily due to the government providing substantial tax incentives to engage in high-tech business deals and promote exports.
This is in sharp contrast to Chinese companies, which sometimes encounter political problems clinching deals. Consider the case of the China
National

Related Documents