-> Faced with the need to muscle out competitors, companies are increasingly pursuing inorganic growth as a strategy for capturing new markets, adding new business lines, and scaling up quickly.
-> The corporate world has experienced spikes of mergers and acquisitions activity in the past, but nothing compares to the volume of megadeals in the past two decades.
-> In 1990, there were nearly 10,000 M&A deals with a combined value equivalent to 2 percent of world GDP. Since 2008, there have been some 30,000 deals a year totaling roughly 3 percent of world GDP.
-> The total value of worldwide deals in 2014 was $3.5 trillion, up 25 percent from the previous year and its highest level since the global financial crisis. Ninety-five deals exceeding $5 billion were announced in that year alone.
Source: MGI Global Competition, Full Report, 2015
Emerging- Market Companies have been significant players in this trend:
Having grown to significant size at home, Chinese, Indian, and other emerging-market companies are now using M&A strategies to expand their global presence. India’s Sun Pharmaceutical, for example, has made a stream of acquisitions since the 1990s to become one of the world’s largest generic drug companies. The Tata Group, based in Mumbai, encompasses 19 companies with more than 50,000 workers in the United Kingdom alone, making it one of the country’s largest private-sector employers. Brazil’s JBS has become the world’s biggest meat producer through a series of acquisitions, including the purchase of US-based Swift & Company and Pilgrim’s Pride. Chinese firms, in particular, have embarked on a wave of global acquisitions. In 2013, Chinese firms completed 198 overseas deals worth $59 billion, accounting for one-third of their total acquisitions that year. Over the past four years, Chinese firms’ share of global deal value has exceeded their share of global revenue by almost 30 percent, an indicator of their aggressive expansion. Consider just a few of the headline deals in recent years: Zhejiang Geely Holding Group Co. acquired Swedish automaker Volvo; Shuanghui International now owns US-based Smithfield Foods, the world’s largest pork producer and processor; China National Offshore Oil Corporation bought Canadian oil and gas producer Nexen; and Lenovo recently bought Motorola Mobility.
Source: MGI Global Competition, Full Report, 2015
