M&A activity
from and to
emerging
markets
21 November 2011

Introduction

■ Wouter van de Bunt
■ Joined KPMG in 1997
■ Head of the Dutch Corporate Finance
practice
■ Member of the global M&A board

© 2011 KPMG Advisory N.V., is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. Printed in the Netherlands. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG
International”), a Swiss entity. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.

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M&A activity between emerging and developed markets

“Are developed markets buying more in emerging markets or
are emerging markets buying more in developed markets?”

© 2011 KPMG Advisory N.V., is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. Printed in the Netherlands. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG
International”), a Swiss entity. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.

3

Global M&A activity between emerging and developed markets

Global deal activity between developed and emerging markets
1,800

35.7%

1,600
1,400

31.4%

36.8%

40.0%
35.0%

32.5%

30.0%

26.7%

1,200

25.0%

1,000

20.0%

800

15.0%

600

10.0%

400

5.0%

200

-

2006

2007
Developed buying emerging

2008

2009

2010

Emerging buying developed

Emerging buying developed as % of developed buying emerging

Source: Thomson Reuters SDC; KPMG analysis.
© 2011 KPMG Advisory N.V., is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. Printed in the Netherlands. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG
International”), a Swiss entity. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.

4

Global M&A activity between emerging and developed markets (2)

“In which emerging markets,
developed countries invest the most?”

© 2011 KPMG Advisory N.V., is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. Printed in the Netherlands. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG
International”), a Swiss entity. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.

5

Global M&A activity between emerging and developed markets (3)

Developed market acquirers of emerging market targets (by emerging)

2006
(total no. of deals = 1,437)

Other
22%

CEE
22%

2010
(total no. of deals = 1,351)
CEE
12%

Other
25%

China
15%
Central America &
Carribean
8%
India
9%
South America
10%

China
18%

Central America &
Carribean
8%
South East Asia
16%

India
8%
South East Asia
11%

South America
16%

Source: Thomson Reuters SDC; KPMG analysis.
© 2011 KPMG Advisory N.V., is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. Printed in the Netherlands. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG
International”), a Swiss entity. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.

6

Global M&A activity between emerging and developed markets (4)

“Which are the main emerging markets
investing in developed markets?”

© 2011 KPMG Advisory N.V., is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. Printed in the Netherlands. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG
International”), a Swiss entity. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.

7

Global M&A activity between emerging and developed markets (5)

Emerging market acquirers of developed market targets (by emerging)

2006
(total no. of deals = 383)

Other
19%

2010
(total no. of deals = 497)

Other
24%

India
26%

India
18%

Russia
6%

Malaysia
11%

Russia
5%

Central America &
Carribean
8%
Malaysia
18%

China
9%
South East Asia
14%

Central America &
Carribean
7%
China
16%

South East Asia
19%

Source: Thomson Reuters SDC; KPMG analysis.
© 2011 KPMG Advisory N.V., is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. Printed in the Netherlands. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG
International”), a Swiss entity. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.

8

M&A activity between the Netherlands and emerging markets

“What is the position of the Netherlands?

© 2011 KPMG Advisory N.V., is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. Printed in the Netherlands. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG
International”), a Swiss entity. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.

9

M&A activity between the Netherlands and emerging markets (2)

Global deal activity between the Netherlands and emerging markets
90
80

CAGR ==
CAGR
9.5%
9.5%

70
60
50
40
30

CAGR ==
CAGR
31.6%
31.6%

20
10
2006

2007

Netherlands acquiring emerging markets

2008

2009

2010

Netherlands acquired by emerging markets

Source: Thomson Reuters SDC; KPMG analysis.
© 2011 KPMG Advisory N.V., is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. Printed in the Netherlands. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG
International”), a Swiss entity. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.

10

Recent examples of transactions

Selection of transactions with emerging markets
Country

Company

Deal description

KPMG Involvement

■ Beijing Hainachuan Automotive Parts Co. bought
Inalfa Roof Systems Group for €300 million in
2011.
■ Chinese companies Youngman and Pangda
acquire shares in Swedish Automobile.




■ Brazilian meat-processing giant JBS SA is
pursuing a takeover of Sara Lee Corp., said
people familiar with the matter*.
■ Tata Steel acquires Anglo-Dutch steelmaker
Corus for a consideration of $7.6 billion.
■ Unitas Capital Pte, a Hong Kong Based private
equity firm. Ltd. has agreed to acquire Hyva
Holding B.V. from 3i Group plc.



■ Precision Capital, the Luxembourg-registered
SPV owned by the Qatari royal family, has agreed
to acquire KBL European Private Bankers
■ Liquavista BV, announced that it has been
acquired by Samsung Electronics.
Note:



(*) Did not lead to a transaction.

© 2011 KPMG Advisory N.V., is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. Printed in the Netherlands. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG
International”), a Swiss entity. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.

11

Relative attractiveness of the Netherlands

“Why is the Netherlands such an attractive market
for companies from emerging markets?”

© 2011 KPMG Advisory N.V., is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. Printed in the Netherlands. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG
International”), a Swiss entity. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.

12

The Netherlands is an attractive economy for outside investors

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The Netherlands has always been a very
international and open economy and provides
ample possibilities for outside investors due to
these characteristics

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© 2011 KPMG Advisory N.V., is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. Printed in the Netherlands. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG
International”), a Swiss entity. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.

13

Strategic rationale M&A

“What is the M&A rationale
from different stakeholder perspectives?”

© 2011 KPMG Advisory N.V., is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. Printed in the Netherlands. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG
International”), a Swiss entity. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.

14

M&A rationale for seller versus M&A rationale of buyer

Strategic rationale
Stakeholder

Buyer

Seller

Management and
employees

■ Acquire foothold in new
market

■ Leverage on distribution
network

■ Acquire know-how and
transfer this to local markets

■ Cross selling opportunities

■ Acquire brand name

■ Maintain number of
employees

■ Acquire highly educated
personnel
Society as a whole

■ Keep HQ in local market

■ Maintain employment levels

■ Takeover should not
jeopardise long term stability
of the buyer

■ Maintain local know how
■ Taxation should remain in
‘own’ country

© 2011 KPMG Advisory N.V., is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. Printed in the Netherlands. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG
International”), a Swiss entity. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.

15

Key questions
Discussion topics
What can
can we
we do
do to
to shape
shape the
the future
future of
of the
the Netherlands
Netherlands and
and
What
take part
part in
in the
the ongoing
ongoing international
international consolidation?
consolidation?
take

Does cross
cross border
border M&A
M&A create
create value?
value?
Does

From aa shareholder
shareholder perspective,
perspective, what
what are
are the
the pros
pros and
and cons
cons
From
of aa buyer
buyer out
out of
of an
an emerging
emerging market
market in
in aa M&A
M&A process?
process?
of
What can
can Dutch
Dutch companies
companies do
do to
to attract
attract buyers
buyers from
from
What
emerging markets
markets and
and facilitate
facilitate them
them in
in M&A
M&A processes?
processes?
emerging
What should
should be
be taken
taken into
into account
account when
when acquiring
acquiring aa
What
company located
located in
in an
an emerging
emerging market?
market?
company

© 2011 KPMG Advisory N.V., is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. Printed in the Netherlands. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG
International”), a Swiss entity. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks of KPMG International.

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