KPMG: U.S. Companies Most Active In Emerging Market M&A

By Rob Starr, Content Manager, Big4.com

According to KPMG International’s latest Emerging Markets International Acquisition Tracker (EMIAT) study, U.S.-based companies were the most active in completing mergers and acquisitions (M&A) with emerging and high-growth market companies in the first half of 2012, but deal activity dropped by 33 percent compared with the first half of 2011.

This drop in acquisitions made by U.S. companies coincides with a worldwide slowdown in developed-to-high-growth market (D2H) deals, which dropped 15 percent — 661 in the first half of 2012 versus 778 in the first half of 2011.  Companies in the “other European countries” category made the second-most acquisitions of emerging market companies with 81 in the first half of 2012.

Overall, emerging and high-growth market companies made 203 acquisitions in developed economies in the first half of 2012, down from 219 during the first half of 2011, according to the KPMG study.  South and East Asia (41) and China (39) were the top acquirers in high-growth-to-developed deals (H2D) in the first half of 2012.

The study analyzed deal flows between 15 “developed” economies or groups of economies and 13 “emerging” and “high-growth” economies or groups of economies.  Established in 2003, the EMIAT includes data from “completed” transactions where a trade buyer has taken a minimum 5 percent shareholding interest in an overseas company. All raw data within the EMIAT is sourced from Thomson Reuters SDC and excludes deals backed by government, private equity firms or other financial institutions.

Dan Tiemann, partner and U.S. leader of KPMG’s Transactions and Restructuring practice commented:

Potential U.S.-based acquirers are sitting on a lot of cash, which could cause a brighter second half, but, at this point, they are being very careful about how they deploy it,” he said.