Essay on Merger and Acquisitions
Developing countries are gaining strength and influence
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…
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
An increase in deals between developing and developed countries
Global majority acquisitions
Majority acquisitions between developing and developed countries
CAGR = 6%
CAGR = 19%
Majority acquisitions within either developed or developing countries
CAGR = 5%
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