M&A deals in emerging markets surge in 2012 following slump

GLOBAL spending on mergers and acquisitions (M&A) in emerging high-growth markets rose by five per cent last year, following a 25 per cent slump in 2011.

However, spending by British firms more than halved, according to figures released today.

Research by law firm Freshfields Bruckhaus Deringer puts global investment in the world’s 24 fastest-growing economies in 2012 at $162.4bn (£102.8bn), as sluggish growth in domestic markets encouraged more foreign investment in countries such as China, Mexico and Russia.

US firms were the biggest investors, with acquisition spending rising 70 per cent to over $22bn. Belgium was the next biggest spender at $20.5bn, although this was almost entirely down to brewer Anheuser-Busch Inbev’s $20bn deal for Mexico’s Modelo. UK firms were the fifth-highest spenders, with $10.7bn worth of deals in high-growth countries.

China came out as the most popular destination for investment, with $35bn spent on acquisitions by foreign companies.

The food and beverage, insurance, metals and mining, and banking sectors accounted for almost half of foreign investments.

“After a period where many investors have been concentrating on matters closer to home and have held off investing in higher growth markets, we are seeing a gradual return of corporate appetite for more sizeable investments in these economies,” Freshfields’ global head of corporate, Edward Braham said.

“2011 proved slow, 2012 was more active and the early signs for 2013 point to deal flow in higher growth markets picking up further.”