UK Sees Decline In Emerging Markets M&A

Last year the value of deals in emerging markets executed by UK firms fell to $10.7bn, a fall of 50 per cent on 2011, leaving them at number five in global rankings.

However, global investment deals targeting emerging markets rose 5 per cent to $162.4bn, according to recent research.

This follows a drop of almost 25 per cent recorded in 2011 and although the value of deals grew in 2012, the total number of deals targeting these markets fell 12 per cent to 2,796.

However, these figures are still a an improvement on global M&A in 2012, when the market dropped almost 5 per cent in value terms and 9 per cent in volume terms compared to 2011.

Food and Beverage, Insurance, Metals and Mining and Banking sectors accounted for almost 45 per cent of all investments targeting higher growth markets in 2012, with the US leading the ranking of most acquisitive nations in growth markets, followed by Belgium, Hong Kong and Singapore.

At $35bn, China attracted most investment last year, followed by Mexico, Russia, Brazil and Indonesia. In addition, Mexico and Turkey witnessed some of the biggest increases in inward investment compared to 2011, whereas India suffered a significant drop of 42 per cent.

Emerging markets proved popular in 2012 because of weak macro economics in developed markets, such as successive ‘euro zone crises’ and the ‘US fiscal cliff’.

Also, business confidence remained under pressure and increased shareholder scrutiny of deals may also have been a factor in discouraging deal flow.

As an accountant, Philippe Herszaft specialises in offering advice, support and guidance in regard to business acquisitions and mergers.