This edition of the HGM Tracker shows High Growth Markets (HGMs) losing their luster for corporate acquirers globally, with the level of deals into HGMs returning to a downward trend in the first half of 2015 after a year of recovery.
Despite a relatively stable global M&A market, both developed and high growth markets have cut their investments into HGMs significantly compared with 6 months ago. This includes into inbound hot spots such as India and China. In fact, the level of deals between developed market acquirers and high growth market targets (D2H) fell to a 10 year low, as did the volume of deals between high growth market acquirers and targets (H2H).
The figures mask some interesting trends, however, with markets like Mexico and the US still showing a robust level of activity, and outbound HGM deals maintaining a healthy flow, particularly in some key markets.
The level of HGM M&A investment into developed markets (H2D) saw a less dramatic fall-off. In fact, despite an 11 percent decline in the overall volume of H2D deals between the second half of 2014 and the first half of 2015, the volume of H2D deals (232) is still higher than it was in 2013.
In line with the reduction in appetite in developed markets for high growth market acquisitions, HGMs also seem to be losing interest in investing in other HGMs (H2H deals), with H2H deal volumes also hitting their lowest point in over 10 years.
The HGM Tracker looks at deal flows between 15 developed economies (or groups of economies) and 13 high growth economies (or groups of economies). The Tracker is produced every 6 months to give an up-to-date picture of cross-border merger and acquisition activity, with the current edition featuring deals between January and June 2015.