Dealmakers on emerging markets
Emerging markets are attractive for growth but cross-border deals face a series of challenges, ranging from politics to the size of potential targets, senior bankers told the Reuters Global M&A Summit.Here are some comments on emerging markets M&A from the Summit:
NIGEL ROBINSON, HEAD OF NATURAL RESOURCES M&A, DEUTSCHE BANK (DBKGn.DE)
“People often mistake regulation for being a legal process, it’s actually a political process… In every country the politicians will have the power to intervene or find a way to exercise the regulation practice in political manner.”
MARK ECHLIN, HEAD OF INDUSTRIALS, CREDIT SUISSE (CSGN.VX)
“It is quite sobering when you arrive (in Mongolia) and there on the front of the English speaking newspaper is the fact that you are in town with all your competitors…
“You realize how this important this is, because the decisions on these big assets — Tavan Tolgoi on coal, Oyu Tolgoi on copper — this is going to drive the country for the next hundred years literally and people are very focused on it.”
ARYEH BOURKOFF, HEAD OF AMERICAS INVESTMENT BANKING, UBS
(UBSN.VX)
“The stock prices and valuations that are ascribed to tech companies and media companies in the U.S. are going to be driven more and more by their international growth prospects.
“And the question is where do you deploy that capital, because capital is scarce and which markets do you go into sooner versus later. You may end up going to markets that have less regulatory challenges first.”
LARRY HAMDAN, EXECUTIVE CHAIRMAN OF GLOBAL M&A, BARCLAYS
CAPITAL (BARC.L)
“Industrial clients in the U.S. and Europe would love to find out opportunities to expand in emerging markets, but deals are very, very tough to find of any size … Companies would love to find great targets but finding those targets is very hard.
WILL DOTSON, HEAD OF NORTH AMERICAN INDUSTRIALS GROUP,
MORGAN STANLEY(MS.N)
“Being able to take what is a traditional M&A deal and position it as a play on emerging markets is something that people are spending a lot of time on.
“The less fruitful path is going and trying to find this $200 million business in Turkey or wherever.”
DAN BAILEY, EUROPEAN CO-HEADS OF TELECOMS, MEDIA, CITIGROUP (C.N)
“I do think there will be more consolidation across the CEEMEA (Central and Eastern Europe, Middle East and Africa) region. The issue of course is the unrest in the Middle East.”
“If you look at developments in Tunisia and elections in Egypt, if those go well and are seen to be a lighthouse for the region… Then I would expect to see a ramp-up and more M&A across the CEEMEA region.”
JEAN ABERGEL, HEAD OF EMEA MEDIA AND COMMUNICATIONS, MORGAN STANLEY (MS.N)
“The public markets today are skeptical today of the value of synergies in cross-border telecoms transactions and we have seen what has happened to stock prices when some companies have tried to merge or acquire companies that were outside their footprint.” (Reporting by Simon Meads, Victoria Howley and Quentin Webb in London, Soyoung Kim and Paritosh Bansal in New York; editing by Jon Loades-Carter, Bernard Orr)
NIGEL ROBINSON, HEAD OF NATURAL RESOURCES M&A, DEUTSCHE BANK (DBKGn.DE)
“People often mistake regulation for being a legal process, it’s actually a political process… In every country the politicians will have the power to intervene or find a way to exercise the regulation practice in political manner.”
MARK ECHLIN, HEAD OF INDUSTRIALS, CREDIT SUISSE (CSGN.VX)
“It is quite sobering when you arrive (in Mongolia) and there on the front of the English speaking newspaper is the fact that you are in town with all your competitors…
“You realize how this important this is, because the decisions on these big assets — Tavan Tolgoi on coal, Oyu Tolgoi on copper — this is going to drive the country for the next hundred years literally and people are very focused on it.”
ARYEH BOURKOFF, HEAD OF AMERICAS INVESTMENT BANKING, UBS
(UBSN.VX)
“The stock prices and valuations that are ascribed to tech companies and media companies in the U.S. are going to be driven more and more by their international growth prospects.
“And the question is where do you deploy that capital, because capital is scarce and which markets do you go into sooner versus later. You may end up going to markets that have less regulatory challenges first.”
LARRY HAMDAN, EXECUTIVE CHAIRMAN OF GLOBAL M&A, BARCLAYS
CAPITAL (BARC.L)
“Industrial clients in the U.S. and Europe would love to find out opportunities to expand in emerging markets, but deals are very, very tough to find of any size … Companies would love to find great targets but finding those targets is very hard.
WILL DOTSON, HEAD OF NORTH AMERICAN INDUSTRIALS GROUP,
MORGAN STANLEY(MS.N)
“Being able to take what is a traditional M&A deal and position it as a play on emerging markets is something that people are spending a lot of time on.
“The less fruitful path is going and trying to find this $200 million business in Turkey or wherever.”
DAN BAILEY, EUROPEAN CO-HEADS OF TELECOMS, MEDIA, CITIGROUP (C.N)
“I do think there will be more consolidation across the CEEMEA (Central and Eastern Europe, Middle East and Africa) region. The issue of course is the unrest in the Middle East.”
“If you look at developments in Tunisia and elections in Egypt, if those go well and are seen to be a lighthouse for the region… Then I would expect to see a ramp-up and more M&A across the CEEMEA region.”
JEAN ABERGEL, HEAD OF EMEA MEDIA AND COMMUNICATIONS, MORGAN STANLEY (MS.N)
“The public markets today are skeptical today of the value of synergies in cross-border telecoms transactions and we have seen what has happened to stock prices when some companies have tried to merge or acquire companies that were outside their footprint.” (Reporting by Simon Meads, Victoria Howley and Quentin Webb in London, Soyoung Kim and Paritosh Bansal in New York; editing by Jon Loades-Carter, Bernard Orr)
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