All-time high: M&A in emerging markets

In this article which was published on Financier Worldwide, it discusses the significant rise in mergers and acquisitions (M&A) activity in emerging markets over the past year, particularly in 2021. Deal value in these markets surged to $920.1 billion in the first nine months of the year, a 34% increase compared to 2020, making it the strongest period for emerging market dealmaking since 1980. Notably, cross-border M&A saw a 94% rise, and private equity-backed buyouts reached a record $163.4 billion.

Southeast Asia experienced notable growth, with M&A activity doubling in value in the second quarter of 2021. Other regions, including China, India, and Brazil, dominated overall emerging market M&A activity, while countries like South Africa, Israel, and Brazil showed strong growth, offsetting declines in Russia and the UAE.

The article also emphasizes the unique risks of investing in emerging markets, such as corruption, unfamiliar political environments, and business practices. It highlights the importance of thorough due diligence to navigate these challenges.

Christopher Kummer, CEO and Founder of the Institute of Mergers, Acquisitions, and Alliances (IMAA), provides key insights, noting that record levels of “dry powder” (available capital) are driving the surge in M&A activity. He also points to discount valuations and bankruptcies in China’s real estate sector as future opportunities for M&A deals in the region.

This period presents one of the most promising times in a decade for M&A practitioners in emerging markets, according to Kummer.