Asian corporations target foreign firms

09 August 2010

HONG KONG: Many brand owners in Asia are hoping to make foreign acquisitions in the near future, with firms in China and North America among the primary targets.

A survey from Mercer and Kroll indicates that 83% predict the number of non-indigenous businesses taken over by Asian corporations would increase during the next 18 months.

The consultancies conducted a survey of 155 senior business leaders and private equity executives in the region to gain an insight into their plans.

A further 49% suggested China is likely to attract the most attention, 29% believed North America will witness a surge in this kind of M&A activity, with Southeast Asia on 27% and India on 22%.

However, only 1% of the panel outlined an interest in expanding into Japan in a similar fashion, perhaps unsurprisingly given the long-term economic challenges that have faced the country.

Eastern Europe - and Russia in particular - was identified as presenting a high level or risk, largely because of concerns related to fraud and bribery.

China and certain African nations also suffer from the same problems, the study found.

Geely, the Chinese automaker, recently bought Swedish competitor Volvo from Ford, in a deal valued at $1.3bn (€979m; £813m).

Lenovo, the IT giant also headquartered in China, paid $1.75bn for IBM's computing arm in 2005, widely regarded as a watershed in this area.

Data sourced from Reuters; additional content by Warc staff