Emerging markets hit as M&A activity falls to seven-year low

Merger and acquisition activity falls globally.

Shanghai. Photograph: Getty Images

Merger and acquisition activity (M&A) fell globally in the first half of the year, led by falling activity across developed and emerging markets.

A survey from KPMG found that deal volumes involving high growth economies have fallen back to the lowest levels since 2005, with only 979 made.

The accountancy giant's latest High Growth Markets International Acquisition Tracker revealed that market acquisition in high growth markets dropped 15 per cent on last year.

“Both the volume and value of corporate transactions are down across the board, and overseas markets that were previously seen as highly attractive investment destinations for developed economies have lost some of their shine,” said David Simpson, KPMG global head of M&A.

UK corporate activity mirrored the rather muted global picture. There were a total of 51 deals involving UK firms acquiring targets in high growth economies – down from 72 in the second half of  2011, and 66 in H1 2011. Similarly, there were only 16 deals involving a high growth corporate acquiring a company in the UK – a steady fall from 25 in H2 2011 and 20 in the first six months of last year.

Acquisitions in China fall to lowest levels in seven years, down 25 per cent from 2011.

However, the number of Chinese companies acquiring targets in developed markets rose to 39 in the first half of this year. KPMG says this figure is at the top end of Chinese performance over the past seven years, and suggests that Chinese companies’ enthusiasm for overseas acquisitions is growing, even if their attractiveness as targets is declining.

This story can be read in full at economia.