M&A6

INTERNATIONAL M&As : NEWS BRIEF.

OECD ECONOMIES ARE IN THE DOLDRUMS, BUT THE TREND IN GLOBAL MERGERS AND ACQUISIITONS HAS RARELY BEEN MORE BUOYANT.

INTERNATIONAL M&A INVESTMENT IN 2011 REACHED APPROXIMATIVELY  $1000 BILLION AS AT END OF DECEMBER 2011, A 30 % INCREASE OVER 2010.

TRADITIONALLY, M&As HAVE BEEN CLASSIFIED ACCORDING TO THE RELATIONSHIP EXISTING BETWEEN THE ORGANIZATIONS AND PRODUCTS INVOLVED AS THESE IMPACT MARKET STRUCTURES ( HORIZONTAL, VERTICAL, PRODUCT EXTENSION, MARKET EXTENSION AND PURE CONGLOMERATE COMBINATIONS).

M&As IS A SIGN OF RUDE BUSINESS HEALTH, BUT IN THE CURRENT WEAK INTERNATIONAL ENVIRONMLENT, HIGHER ACTIVITY REFLECTS STRESSED BUSINESSES WITH SAGGINBG STOCK VALUATIONS BEING GOBBLED UP BY HEALTHIER FIRMS EAGER TO STRENGTHEN THEIR MARKET POSITIONS.

THE HIGH LEVEL OF MERGER ACTIVITY FOR 2011 ALSO REFLECTED A HUNT BY CAPITAL FOR RELATIVELY HIGH DEMAND SECTORS ( OIL AND GAS, HEALTH CARE, MINING AND UTILITIES, ENERGY ).

EMERGING MARKETS ARE ANOTHER FACTOR THAT HAS BEEN DRIVING THE UPWARD TREND.

THE US AND THE UK ARE STILL THE TOP DESTINATIONS FOR INTERNATIONAL M&As, FOLLOWED BY CHINA, ITALY, AND FRANCE, EACH WITH 6%  OF THE WORLD TOTAL.

BRAZIL IS THE 6TH MOST POPULAR TARGET WHILE INDIA IS THE 12TH AND RUSSIA THE 16TH.

AS A GROUP, THE EMERGING AND DEVELOPING ECONOMIES RECEIVED ALMOST $200 BILLION IN M&A INVESTMENT, MORE THAN 20% OF THE GLOBAL TOTAL IN 2011.

FOR FURTHER READING ON THIS TOPIC :  www.oecd.org/daf/investment

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