Emerging markets overtook developed markets both in terms of sales and purchases of foreign acquisitions - accounting for 56% of total cross-border transactions in 2013.
Thompson Reuters data shows that worldwide M&As activity totalled US$2.4 trillion during full year 2013, a drop of 6% from 2012 levels, the number of deals was at an eight year low and that cross-border M&A was down 18% in 2103. Cross-border M&A activity totalled US$737.8 billion during full year 2013, accounting for 31% of overall M&A volume and down 18% compared to full year 2012. M&A involving companies located in emerging markets totalled US$675.2 billion during full year 2013, a 5% decrease from 2012 and accounted for 28% of worldwide announced activity.
Expectations of a rebound in cross-border M&A activity in 2013 did not materialize as transnational corporations (TNCs) maintained a cautious approach. The value of cross-border M&A sales increased only modestly by 5% to reach US$337 billion, in 2013. This increase was mainly driven by deals in East and South-East Asia, particularly in China, Singapore and Thailand, while Latin America's increase in sales was due to a US$18 billion mega deal in Mexico.
Value by Region/Country: Purchaser Side | Seller Side
# of M&A's By Region/Country: Purchaser Side | Seller Side
Emerging markets overtook developed markets both in terms of sales and purchases of foreign acquisitions - accounting for 56% of total cross-border transactions in 2013. Emerging market M&A sales value, bounced back to pre-crisis levels in 2013, increasing by 64% to US$88 billion. Almost 68% of the acquisitions were from other developing countries (up from about 50% in 2006) and included some record-breaking acquisitions by Chinese and Russian companies. Africa saw the most rapid increase in appetite among dealmakers, with the share of global M&A activity rising from 4% to 7%.
Cross-border sales in developed countries decreased by about 10% on both sides of the Atlantic. Cross-border M&A sales in NAFTA in 2013 remained at the same level as the previous year, although Unctad’s World Investment Report 2014 suggests this stability hides significant changes in their source regions, with significant increases in acquisitions from developing economies (+63% to US$37 billion) and a decrease from developed countries (-21%). A number of developed countries such as Australia, United Kingdom, France, Ireland and Spain undertook large divestments from NAFTA in 2013.
Unctad believes confidence is returning in Europe. Germany, for example, more than doubled its sales with some major deals including Vodafone's acquisition of Kabel Deutschland for US$7.7 billion. Increases in FDI flows to Japan in 2013 were mainly owing to a number of mega deals, including United States–based Micron Technology Inc's merger with Elpida Memory Inc for US$2.5 billion. Europe was the most prominent target market for dealmakers looking outside their home markets in 2013, with 38% of transactions by value taking place in the region. By contrast, North America, which saw the same amount of inbound M&A spending as Europe in 2012, was the target of only one in four deals last year.