U.S.-based companies were the most popular targets for mergers and acquisitions (M&A) activity involving emerging and high-growth market companies in the second half of 2012, as high-growth-to-developed (H2D) deal volumes appear to be stabilizing, according to KPMG International’s latest High Growth Markets International Acquisition Tracker study.
The semi-annual KPMG study, which tracks completed deals in which an acquirer took at least a 5% shareholding interest, found that emerging and high-growth market companies completed 42 acquisitions in the United States in the second half of 2012, slightly down from the 50 deals completed in the first half of 2012.
China (12) and South and East Asia (6) accounted for the majority of acquisitions made in the United States in the second half of 2012.
“Emerging and high-growth market companies are continuing to diversify their portfolios outside their home market and the United States remains attractive for a number of reasons including market size, talent, and resources,” said Mark Barnes, national leader of KPMG’s U.S. High Growth Markets practice.
Overall, emerging and high-growth market companies made 216 acquisitions in developed economies in the second half of 2012, down from 227 during the first half of 2012, but very much in line with the volume of deals consistently achieved during the past two years, according to the KPMG study. China (40) and India (29) were the top acquirers in H2D deals in the second half of 2012.
“The United States is a sound investment destination for companies based in emerging markets looking to expand their geographic reach, and, as a result, many of these companies are actively pursuing transactions in the United States that align with their growth strategies,” said Dan Tiemann, KPMG’s Americas lead for Transactions & Restructuring. “On the outbound side, we’re seeing U.S. companies flush with cash looking to emerging markets for growth opportunities.”
United States Top Acquirer of Emerging and High-Growth Market Companies
U.S.-based companies completed 102 emerging and high-growth market acquisitions in the second half of 2012, down from 111 in the first half of 2012. This drop in acquisitions made by U.S. companies mirrors a slowdown in developed-to-high-growth market (D2H) deals, which dropped 12 percent — 619 in the second half of 2012 versus 707 in the first half of 2012. Japanese companies made the second-most acquisitions of emerging market companies with 73 in the second half of 2012.