Large companies have got cash to burn but are still too nervous to risk takeover deals in new markets.
That’s the conclusion KPMG has reached in its latest Emerging Markets International Acquisition Tracker study.
Merger and acquisitions activity in developed and emerging markets fell last year with the fewest number of completed deals since the peak of the financial crisis in 2009. The number of completed deals fell by nearly 12% from 2011. There were 1994 deals done compared to 1935 done in 2009.
Mark Barnes of KPMG said: “Due to uncertain economic conditions, many companies held off on making acquisitions even though they had cash to deploy. But we are seeing pent-up demand in the marketplace as companies are looking to make deals in other markets and expand as part of their growth strategies.”
South East Asian businesses were the biggest target of developed-market buyers with 235 deals, while assets in the Commonwealth of Independent States were the least desired with 32 transactions.
US-based firm were the most popular targets for emerging-market buyers, although at 92 for the year, transactions were 9.8% down from 2011 totals.
“Developed markets are showing more stable levels of confidence domestically, but this is not translating into higher acquisition activity in emerging markets,” Barnes said.
