Ernst & Young: Top for mergers & acquisition in emerging markets is Mexico & Indonesia & frontier markets is Myanmar

100972972-CA16901r.240x160CNBC reports that Ernst & Young highlighted possible future top countries for deal making, which included the U.K. and Germany, alongside emerging markets like Mexico and Indonesia, and “frontier” markets like Myanmar.

The following is from CNBC:

More than a third of companies are planning mergers or acquisitions within the next year, according to an Ernst & Young (EY) survey of senior executives across 70 countries, as confidence grows in the global economic recovery. EY also found that almost three-quarters of the surveyed 1,600 executives expected both the number and size of deals to increase.

“M&A (mergers and acquisitions) sentiments are being buoyed by a much more positive view of deal fundamentals — there have been notable increases in the number and quality of acquisition opportunities, as well as a significant improvement in the likelihood of successfully closing deals,” said Pip McCrostie, global vice chair of transaction advisory services at EY, one the U.K.’s “big four” professional services firms. “All of this is underpinned by growing confidence in a global economy on a sounder footing — improving economic conditions in mature economies and more stabilization in the major emerging markets.”

According to EY, the top five destinations for prospective cross-border deals were China, India, Brazil, the United States and Canada. While the highest level of anticipated deal-making was in life sciences, energy, automotives and consumer products.

“The emerging markets, both BRIC (Brazil, Russia, India and China) and non-BRIC, are of growing interest to dealmakers, and allow for portfolio diversification. Emerging markets are also expected to invest more in mature economies as well as other emerging markets prospectively, as they secure the necessary capital and seize the opportunity to drive growth through larger acquisitions,” said McCrostie in the report. EY also highlighted possible future top countries for deal making, which included the U.K. and Germany, alongside emerging markets like Mexico and Indonesia, and “frontier” markets like Myanmar.

According to Dealogic data, global M&A volumes reached $2.1 trillion in the first nine months of this year, up 17 percent on the same period in 2012. However, the number of deals fell to 27,216, marking the second consecutive year-on-year decline during this period. The largest deal this year-to-date was Verizon Communications‘ $130 billion acquisition of Vodafone‘s stake in Verizon Wireless in September.

—By CNBC’s Katy Barnato

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One thought on “Ernst & Young: Top for mergers & acquisition in emerging markets is Mexico & Indonesia & frontier markets is Myanmar

  1. Long ago there was this International business polling agency that polled whether M&A enhanced financial competency of the companies involved or cut staff heads and create tension. Majority of people from some part of the world voted that it creates competency while other voted that it creates tension. Actually, i think it depends. When there is a M&A spree in developing nations, Companies take it as a final goal than the medium to reach a better aligned goal. Therefore, companies that involve in M&A without being thoughtful about the possibility of strategic collaboration rather fall into internal tensions than growth. Similar issues recently happened in my country when financial institutions started haphazardly merging among each other as trend followers by simply observing the M&A success of the early adopters. And when a collaborative strategic iceberg couldn’t be determined due to not match strategic goal of either companies, it rather turned out to be blunder with economic cost and cost out of falling staff morale due staff cut during the process. Since M&A is a new terminology in a developing world, business houses should learn about its purpose to create a better bigger company than just to success a merge.
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