Firms steering clear of deals in newer markets

Marion Dakers
COMPANIES have shied away from making takeover bids in emerging markets so far this year, as part of the wider slump in global mergers and acquisitions, research published today suggests.

The number of bids for targets in high-growth economies from firms in developed nations fell 23 per cent on the same period a year ago to 526 deals.

This decline in deal volumes is the biggest drop since the peak of the financial crisis in 2008-9, figures from KPMG show. The overall M&A market was 10 per cent quieter in June than it was a year ago.

And approaches for Chinese firms fell 10 per cent to 69 in the first six months of the year, leaving deal activity around a third lower than it was in late 2010.

KPMG’s research examined deal flows between 15 developed economies and 13 high-growth economies.

“It is disappointing to see overall high growth market transaction levels falling so definitively across the board, but it would be premature to read too much into the figures at this stage,” said Tom Franks, global head of corporate finance at KPMG.

“The figures need to be seen in the context of a global M&A market that continues to struggle.”