What do you think about Emerging Countries Middle Market perspective in M&A?

This topic contains 4 replies, has 5 voices, and was last updated by  Senthilkumar Perumalsamy 2 years, 1 month ago.

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    Marcelo Lopes Abud

    What do you think about middle market M&A at emerging countries in next years?

    In my opinio they Emerging markets can suffer with protectionists actions of USA, but some of them are showing theirselves very solids economies and with greate perspective of growth.
    M&A should be used in those countries enabling the best prepared firms to gain market in a faster way than usual.


    Seun Yakub

    Hi Marcelo,

    I think that some emerging markets will experience great growth over the next couple of years.
    For US or European companies looking to break into these markets they may see M&A as the quickest way to do this but of course there are also many risks to investing in emerging markets.

    I once spoke to the MD of an M&A advisory firm based in a Latin America and he told me that valuing companies in his country is quite difficult is quite difficult as the business owners are not always truthful with the accounts of the business. I think these are the kind of things that make companies slightly more cautious when investing in emerging countries. Of course this is just one small point out of so many.

    What do you feel would be other big impediments that would discourage a foreign investor from trying to enter emerging markets via the M&A.


    Mihajlo Buljcik

    Hi Seun,
    in my personal opinion (speaking about European market), prolonged uncertainty regarding the future relationship between the UK and the rest of the EU could show noticeable slowdown in M&A activity. Based on some researches, in second half of 2018 M&A activities (mainly high-profile) experienced a considerable drop due to rising protectionism, government intervention, and continued uncertainty. That could definitely be something which would discourage a foreign investor from trying to enter some of emerging markets as well (perhaps CEE market).


    With US companies exhibiting higher levels of confidence domestically, this is starting to translate into increased acquisition activity in emerging markets. The slow recovery of the global economy and the debt ceiling crisis that has affected the US in the past years have drawn US players to look towards emerging market for target companies. But the latest trade war between China and the United States has put a stop to all the acquisition plan of US companies.


    To my opinion, the emerging market should do well in the long run as only they have core potential to bring a large chunk of their population to prosperity. However, in the short run, they may struggle to cope with recent trade war side effects. Latest protectionism will make them stronger in the longer run domestically. In the next few years, they will find ways to increase consumption domestically including reduction of imports to offset the trade imbalance. Probably it is a good time many M&A could happen, as some emerging market business may struggle and look for outsiders to come for rescue. It is a good opportunity for developed market companies to make a strong footprint.

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