International M&A are forecast to decline by 56 percent
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Last Updated: Friday, December 11, 2009, 12:11
Jakarta: International mergers and acquisitions are forecast to decline by 56 percent this year compared with 2008, the largest year-on-year decline since 1995, the Organization for Economic Cooperation and Development (OECD) said in a report.

The estimate is based on OECD's analysis of data for international Mergers and Acquisitions (M&A) activity up to 26 November 2009, OECD reported yesterday.

The fall was largely due to the 60 percent decline in value of cross-border M&A by firms based in the OECD area, from over USD 1 trillion in 2008 to USD 454 billion in 2009, it said.

However, it was also due to the first sharp declines in M&A activity into and from major emerging economies: international M&A activity by firms based in Brazil, China, India, Indonesia, Russia, and South Africa fell by 62 percent to USD 46 billion in 2009 from USD 121 billion in 2008.

M&A activity into these countries is forecast to decline by almost 40 percent this year to just over USD 80 billion from just under USD 140 billion in 2008, the organisation said.

Speaking at the recent opening of the OECD Global Forum on Investment in Paris, OECD Secretary-General Angel Gurria said that governments needed to do more to promote business investment.

"Against the backdrop of a fragile global economy and sharp declines in international investment activity that have now spread to the emerging economies, the international investment policy community cannot afford to relax," Gurria said.


First Published: Friday, December 11, 2009, 12:11

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