UK is top targeted European country for M&A deals from emerging markets

William Turvill
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UK companies were involved in 45 inbound, completed deals during the second half of 2015 (Source: Getty)

The UK was the number one European target for inbound deals from emerging markets in the second half of last year, according to a new report.

During the six-month period, UK companies were involved in 45 inbound, completed deals, up nearly 30 per cent on the first half of the year, KPMG's cross border deals tracker reported. The UK was a close second to the United States in terms of deals completed.

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For the report, KPMG analysed deal flows between 15 developed economies or groups of economies – such as the UK, US, Oceania and Hong Kong – and 13 high-growth economies, including Brazil, India and South Africa.

Outbound transaction levels from the UK were less buoyant, with deals to emerging markets falling by 14 per cent, from 66 to 57.

Read more: M&A boom of 2015 may not be over yet

Increased deal numbers came from India, with completed deals increasing from one to six; the Association of Southeast Asian Nations, nine to 15; and South America, excluding Brazil, from one to three.

Andrew Nicholson, head of M&A for KPMG, said: “Both the US and UK have been seen by many as being at the forefront of the economic recovery, so it is not surprising that both saw an influx of interest from emerging market suitors acquiring target companies.

“Buyers coming into the UK came particularly from countries such as India, which have strong historical and commercial ties to this country."

But he also noted that the UK may be losing business currently as a result of the upcoming European Union referendum.

He said: “There's still plenty of debt and equity capital looking for a return so domestic deals remain active unless the deal has a significant currency risk.

“Overseas investors are factoring in Brexit risk so with the vote only ten weeks away, they are not minded to progress transactions until the outcome is known."

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