M&A ACTIVITY

BRIC: BRIC corporations to significantly increase their impact on global M&A activity

In a PwC study of 1,410 CEOs released earlier this year, nearly 71% indicated that they planned to expand operations in BRIC countries over the next three years.

What is becoming very evident is the increase in high-profile cross-border acquisitions by BRIC domiciled corporations.

In December 2004 Lenovo (China) announced the $1.75bn acquisition of IBM's PC division. Two other significant Chinese acquisitions of US entities failed - CNOOC's offer for Unocal and Haier's offer for Maytag.

Aecelor attempted a white-knight merger with Russian steelmaker Severstal to fend-off the attentions of Mittal Steel. Severstal, together with fellow Russian steelmaker Evraz, Brazil's CSN and Gerdau and Tata Steel of India have all been proposed as potential acquirers of Anglo-Dutch Corus.

The board of Canadian Inco recently recommended that shareholders accept the $17bn offer from Brazilian Companhia Vale do Rio Doce.

These are by no means the only deals, successful or otherwise, to have emerged and I would suggest that it is a phenomenon that will have an increasing impact on global M&A statistics.