KPMG Study: U.S. companies dominate field as acquirers of emerging market companies in second half of 2009
Acquisitions by Emerging Market Companies Increase, with U.S. and Australia Leading Targets
China Remains Top Acquirer among Emerging Market Countries
U.S.-based companies led the world in completing merger-and-acquisition (M&A) deals with emerging or high-growth market companies in the second half of 2009, nearly tripling the number of acquisitions made by the second-ranked country, according to KPMG International’s latest Emerging Markets International Acquisition Tracker (EMIAT) study.
The KPMG study revealed that in the second half of 2009, U.S.-based companies completed 71 emerging and high-growth market acquisitions, while UK-based companies acquired 25 companies during the same period. U.S. and Australian companies were the most popular targets for emerging and high-growth market companies, with 16 acquisitions made in each country.
“The study results underscore that U.S. companies continue their drive for expanding into new markets, products and services, and that emerging and high-growth market acquisitions are clearly a part of their strategy,” said Mark Barnes, principal-in-charge of KPMG LLP’s U.S.-High Growth Markets practice. “They are seizing opportunities to improve their supply chains and expand their customer base as the global economy moves from recession to recovery.”
Emerging and high-growth market companies made 102 acquisitions in the second half of 2009, up from 78 during the first half of the year, according to the KPMG study, which tracks completed deals in which an acquirer took at least a 10 percent shareholding interest. China maintained its position as the top acquirer among emerging market countries with 30 acquisitions during the period.
“Overall, emerging market companies seem to be rebounding from the downturn more quickly than their developed counterparts,” KPMG’s Barnes said. “Their strength is evidenced by their renewed energy and confidence around pursuing acquisitions in developed economies.”
Emerging Markets Bounce Back
While the KPMG study found that developed-to-emerging (D2E) deals declined overall in the second half of 2009 — down to 216 versus 259 registered in the previous six-month period — emerging-to-developed (E2D) deals increased.
China (30) was the leading emerging market acquirer of companies in developed economies in the second half of 2009, followed by the Middle East (17), India (13), Russia and Commonwealth of Independent States (CIS) (13), and Korea (12).
“In the emerging and high-growth markets, the study suggests that Chinese companies have weathered the recent economic crisis well and have the cash on hand to hit the acquisition trail the hardest,” said KPMG’s Barnes. “We saw a particular focus on commodity and natural resource acquisitions in the second half of 2009, reflecting China’s need to satisfy its growing domestic energy demand.”
After the United States and Australia (16 each), the most popular targets for E2D deals in the second half of 2009 included the United Kingdom (15), Canada (12), and Germany (10), according to the KPMG study.
In the first half of 2009, the top high-growth market acquirers of companies in developed economies were China (20), Central and Eastern Europe (13), India (12), Russia and CIS (11), and South Africa (10), according to the KPMG study.
U.S. Companies Hone in on India
As reported by the KPMG study, Indian companies were the leading emerging and high-growth market targets for U.S. companies. In addition to India (19), U.S.-based companies made the majority of their high-growth market acquisitions in Central and Eastern Europe (12), China (10), Korea (8), and Brazil (7) in the second half of 2009.
Dan Tiemann, U.S. lead partner for the Transaction and Restructuring Services group at KPMG LLP, said the survey findings are consistent with what he is seeing in the United States. “Companies with strong balance sheets are beginning to dip their toes back into the M&A pool now that the free-fall has stopped and there’s more stability in the market. Savvy investors are finding there are some very attractive deals, which should drive increased deal volume throughout the year.”
In the first half of 2009, the top emerging and high-growth market targets for U.S. companies were located in China (19), Brazil (13), India (13), and Central and Eastern Europe (11), according to the KPMG study.
For D2E deals globally in the second half of 2009, Central and Eastern European companies were the most targeted, with 47 total acquisitions. Other popular targets overall for D2E deals included China (40), India (38), Korea (26), and Brazil (20), the KPMG study indicates.
“Brazil has faired well during the economic downturn and is still an important market for investment,” added Barnes. “Going forward, the country’s natural resources will continue to be an attractive asset.”
According to EMIAT study findings for the previous six-month period, the most popular emerging and high-growth market targets overall for D2E deals included Central and Eastern Europe (49), China (46), India (35), Russia and CIS (32), and Brazil (31), the KPMG study indicates.
Source: KPMG LLP
U.S. Government to unveil new $100 note on April 21
The new design for the $100 note will make its debut on Wednesday, April 21 during a ceremony at the Department of the Treasury’s Cash Room.
The U.S. government redesigns currency in order to stay ahead of counterfeiters and protect the public. Decisions about the redesign of each denomination are guided by the government’s close evaluation of the range of ongoing counterfeit threats, whether from digital technology or traditional printing presses.
The unveiling of the $100 note is the first step in a global multi-government agency public education program implemented by the Department of the Treasury, the Federal Reserve Board and the U.S. Secret Service, to educate those who use the $100 note about its changes before it begins circulating. The $100 note is the highest value denomination of U.S. currency in general circulation, and it circulates broadly around the world. Public education is an important component of the government’s redesigned currency program because a well informed public is our first and best line of defense against counterfeiting. Free training materials for cash-handlers as well as other public education resources will be available in 25 languages at www.newmoney.gov beginning at 10:30 a.m. EDT on April 21.
WHO:
Secretary of the Treasury Timothy Geithner
Chairman of the Board of Governors of the Federal Reserve System Ben Bernanke
Treasurer of the United States Rosie Rios
Director of the United States Secret Service Mark Sullivan
WHEN:
Wednesday, April 21, 2010
Program begins at 10:00 a.m. EDT
*Please allow ample time for security screening. All attendees must present government issued photo identification to gain admittance.
WHERE:
The Department of the Treasury’s Cash Room
1500 Pennsylvania Avenue, N.W.
Washington, D.C.
Source: Bureau of Engraving and Printing
Mercedes-Benz Financial expands mobile platform to include smartphones
“Coolest way to pay” now includes users of BlackBerry, Droid and more
Mercedes-Benz Financial is now the first automotive financial services company to expand personalized and convenient account management features to all of its customers using smartphones like BlackBerry®, Droid ®, and other mobile devices with internet capability.
Mercedes-Benz Financial last Fall became the first auto finance company to offer account management features with the launch of its iPhone® App free download.
Account holders must first register online at www.Mercedes-BenzFinancial.com to access secure account management features. Detailed instructions for smartphone users are available at www.Mercedes-BenzFinancial.com/mobile.
All smartphone users, even those who are not customers of Mercedes-Benz Financial, will be able to locate the nearest Mercedes-Benz authorized dealer, contact a customer service representative and see what’s new from Mercedes-Benz Financial.
Account holders of Mercedes-Benz Financial will be able to make a payment, view their account summary and request a payoff quote.
“We are closing in on 10,000 downloads of our iPhone App which validates our decision to expand our mobile capabilities to all customers who are smartphone users,” said Andreas Hinrichs, Vice President of Marketing for Mercedes-Benz Financial. “By expanding our mobile services to smartphone users, more of our customers will enjoy the conveniences of connecting with us from the palm of their hand.”
Michael J. Fox Foundation commits up to $5.75 million in funding for 2010 Critical Challenges in Parkinson’s Disease
The Michael J. Fox Foundation for Parkinson’s Research announced up to $5.75 million in total funding available under its three 2010 Critical Challenges.
Each year the Foundation tailors specific Challenges to advance one or more of its key research priorities in PD drug development: forging new strategies to define Parkinson’s disease and its progression, alter disease course, reduce symptoms and complications of treatment to increase quality of life, and develop pre-clinical and clinical research tools to broadly accelerate Parkinson’s research. Including the Critical Challenges announced today, the Foundation expects about $25 million of its total 2010 funding to drive research focused on these priorities.
Two of the 2010 Challenges aim to streamline field-wide efforts focused on alpha-synuclein and LRRK2, respectively, two leading genetic targets for PD drug development. The third Challenge will drive scientific collaborations that can speed progress by taking advantage of the unique repository of well-characterized biological samples collected through the Brain and Body Donation Program at the Arizona Parkinson’s Disease Consortium.
Alpha-synuclein Therapeutics seeks pre-clinical projects to accelerate therapeutic development of the PD-implicated gene alpha-synuclein, which many researchers believe holds potential to lead to a new treatment that could slow or stop the progression of Parkinson’s disease (something no currently available treatment has been proven to do). Applicants should outline critical next steps to develop and optimize treatment strategies that can change levels of alpha-synuclein production in the brain, reduce alpha-synuclein toxicity, or break up Lewy bodies (clumps formed by the alpha-synuclein protein that are the pathological hallmark of PD). The Foundation will prioritize funding for applications that describe a clear path to the clinic.
Pharmacodynamic Biomarkers of LRRK2 Activity will drive efforts to develop drug-activity biomarkers that can improve outcomes from future clinical trials of treatments targeting the PD-implicated gene LRRK2. The Foundation will give preference to proposals seeking to verify and validate promising, pre-defined candidate LRRK2-associated biomarkers. This Challenge is part of MJFF’s integrated strategy to drive LRRK2 therapeutic development forward at every stage of the drug development pipeline in order to lay the groundwork for clear outcomes from future clinical trials testing LRRK2-associated drug candidates. This program has been made possible through the generous support of The Brin Wojcicki Foundation.
Novel Hypotheses in Parkinson’s Disease: Investigating Clinical Data and Human Tissue offers scientists around the globe the opportunity to collaborate with the Arizona Parkinson’s Disease Consortium (APDC). Funded investigators should propose drug development projects that can benefit from access to APDC’s exceptional bank of well-characterized biologics, postmortem tissue and associated clinical data. Applicants should outline their plans for experiments that will take maximum advantage of these resources to speed therapeutic development.
Critical Challenges complement the Foundation’s annually recurring Pipeline Programs, which provide opportunities for projects at various stages of development, ensuring that new ideas continue flowing into Parkinson’s research. Last September, MJFF announced $12 million in 2010 Pipeline Program funding.
Abbreviated timeline information on the 2010 Critical Challenges follows. Full details are available at www.michaeljfox.org/research.
Alpha-synuclein Therapeutics
Total available funding: $3 million
Deadline: 6 p.m. ET, Wednesday, April 28, 2010
Funding Anticipated: November 2010
Pharmacodynamic Biomarkers of LRRK2 Activity
Total available funding: $2 million
Deadline: 6 p.m. ET, Wednesday, April 28, 2010
Funding Anticipated: November 2010
Novel Hypotheses in PD: Investigating Clinical Data and Human Tissue
Total available funding: $750,000
Deadline: 6 p.m. ET, Wednesday, April 28, 2010
Funding Anticipated: November 2010
The Michael J. Fox Foundation is dedicated to ensuring the development of better treatments, and ultimately a cure, for Parkinson’s disease through an aggressively funded research agenda. MJFF has funded over $175 million in research to date.
Early College founding and future
Early college – leaving high school before the traditional age in order to enroll in higher education – is likely called that because “offering the option of college at the right time for intellectually curious and capable students” lacks pith. But the point is valid: for many students the age of fifteen, sixteen, or seventeen is not early, it is simply time to attend college.
This is not necessarily a critique of high school, although the challenges of our high schools are well documented. It is a recognition that, despite the standardization of educational progress, young people mature at different social and intellectual rates. For those curious and capable, the right time for an engaged college experience may well arrive prior to the age of eighteen.
We should provide that opportunity. This is why the new initiative put forth by the National Center for Economics and Education has promise. The NCEE is leading an effort in eight states to assess the progress of high school sophomores. Those who pass the assessment will have the chance to attend early college.
The proposal is not based on a theoretical argument. For decades, some students attended college when they were intellectually ready; the University of Chicago offered an early college experience in1939. And since 1966, Bard College at Simon’s Rock has been dedicated solely to providing a rigorous liberal arts college education to bright, motivated students. For the vast majority of early entrants, this has been a good decision. A recent national survey, published in the New York Times, found that 88% of Bard College at Simon’s Rock alumni would choose this education again.
The NCEE effort is a significant step forward in expanding the success of this model. In launching this initiative, it will be important to shatter, rather than duplicate, the problems of our school system. Students must be challenged, and offered the opportunity for social and personal advancement. They should not be prematurely tracked into a profession, but offered a genuine liberal education – the chance for an education that liberates. If we succeed in doing this, we will not only provide individual opportunity for students, we will prove, yet again, that education is a significant path to supporting both our democracy and our economy.
IRS welcomes tips from current employees about corporate tax cheats
In an about face from its previous position that put a blanket prohibition on the IRS’s ability to accept some information from whistleblowers that were currently employed by a taxpayer, the IRS has now adopted a position that it should consider the facts and circumstances of each case before deciding how it can utilize this potentially valuable inside information.
The IRS previously said in Chief Counsel Notice 2008-011 that in the case of current-employee informant, the IRS may not use information provided subsequent to the informant’s initial submission and debrief and there could be no further contact with the informant, whereas the new Chief Counsel Notice 2010-004 (issued February 17, 2010) replaces that position with a facts and circumstances test to determine whether it can use such information and whether further contacts are allowed.
“In our experience, high-level employees – the insiders Congress hoped to attract when they created the whistleblower reward program – can best provide the type of information that ultimately leads the IRS to assess and recover unpaid taxes, and they obtain that information legally because it is in their job description to have it,” said Gregory S. Lynam, Tax Partner at The Ferraro Law Firm.
In Notice 2010-004, the IRS said it will now look at the facts and circumstances of each case before applying the “one bite” rule to current-employee informants.
The Ferraro Law Firm applauds this revised approach, and “we believe that with this new Notice in place the IRS will be able to administer the Whistleblower program consistent with Congressional intent and in a manner that makes use of the best information available,” said The Ferraro Law Firm Tax Partner Scott A. Knott. Lynam added, “By freeing itself from the shackles of the old interpretation, the IRS has righted its previous wrong and is no longer casting aside the highest value information from the highest-level insiders.”
Source: The Ferraro Law Firm
Skyscanner reveals the world’s biggest spenders: Tourists who splash the cash
When it comes to international travels, who spends the most and where should travel and tourism organisations be targeting their marketing budgets to attract the big spenders?
Flight comparison site Skyscanner investigates which countries like to flash their cash the most when they travel – the Germans are in the lead, but China is hot on their trail. With the world economy apparently on the road to recovery, tourism will play a huge part in many countries’ income and competition is high to capture the biggest share of that market.
At number one, it’s the Germans who spend over $90 billion a year on their travels, a disproportionate amount compared to their population which numbers just over 80 million, less than a third of the next biggest spenders – the USA, who splash $79.7 billion a year on holidays. Known for tipping big in restaurant and bars, Americans certainly know how to spend.
In third place it’s the UK who splurge $68.5 billion to escape the UK on cheap flights each year. No doubt the lure of sun and sand plays a huge part in the mass exodus, with Spain by far our favourite holiday escape. This is also backed up by recent Skyscanner stats, with cheap flights to Malaga topping the most popular search list in January.
France, which is also the world’s most popular country in terms of tourist arrivals, empties their wallets of $42.1 billion per year, whilst the Chinese spend $36.2 billion annually on their travels.
Barry Smith, Skyscanner co-founder and business director commented: “It will be very interesting to see how tourist spending changes since the downturn. So far, the latest figures show that only the Japanese spent less on international tourism than the previous year. China is fast rising, spending 21% more on their global travels, and are likely set to grow even more. Meanwhile, it’s the Germans who remain the world’s biggest spending tourists, and there would have to be significant change for anyone else to catch up with them.”
1. Germany – $91.0 billion (+2%)
2. USA – $79.7 billion (+4.4%)
3. UK – $68.5 billion (+4.4%)
4. France – $43.1 billion (+9.6%)
5. China – $36.2 billion (+21.4%)
6. Italy – $30.8 billion (+4.9%)
7. Japan – $27.9 billion (-7.9%)
8. Canada – $26.9 billion (+8.4%)
9. Russia – $24.9 billion (+11.8%)
10. Netherlands – $21.7 billion (+9.2%)
Source: Skyscanner
New research from EBRI: Older Americans staying longer in the work force
The labor-force participation rate is increasing for older Americans (those age 55 and older) as older workers are faced with higher health costs and economic losses, according to a study published by the nonpartisan Employee Benefit Research Institute (EBRI).
For those ages 55-64 (the “near elderly”), the increase is being driven almost exclusively by the increase of women in the work force; the male participation rate is flat to declining. However, among those age 65 and older (the elderly), labor-force participation is increasing for both male and females, says the study in the February 2010 EBRI Notes, available at www.ebri.org
As the study suggests, workers increasingly are facing more responsibility in paying for their retirement expenses: Private-sector workers who have access to an employment-based retirement plan most commonly have a defined contribution plan (typically a 401(k) plan, financed at least partially with workers’ own contributions), and retiree health insurance is becoming increasingly scarce. Even for those who do have retiree health insurance, caps on what the employer will pay annually for the coverage are being reached and/or surpassed.
Consequently, the study says, workers today have greater incentives to stay in the work force, such as the ability (and in some cases the need) to continue to accumulate assets in defined contribution plans and to have access to employment-based health insurance coverage, instead of having to tap into their savings to pay for their expenses.
The study, based on U.S. Census Bureau data, includes these additional points:
- The percentage of civilian noninstitutionalized Americans age 55 or older who were in the labor force declined from 34.6 percent 1975 to 29.4 percent in 1993. However, since 1993, the labor-force participation rate has steadily increased, reaching 39.4 percent in 2008–the highest level over the 1975-2008 period.
- Education is a strong factor in an individual’s participation in the labor force at older ages: Individuals with higher levels of education are significantly more likely to be in the labor force than those with the lower levels of education.
- The upward trend among the working near elderly and elderly is not surprising and is likely to continue because of workers’ need for access to employment-based health insurance and for more earning years to accumulate assets in defined contribution (401(k)-type) plans–especially after the 2008 downturn in the stock market and economy.
- While some older Americans have a greater need to work to help make their retirement assets last longer or to continue to build up assets, monetary incentives are not the only motivating factor. There also is an increased desire among Americans to work longer, particularly among those with more education, for whom more meaningful jobs may be available that can be done well into older ages.
Source: Employee Benefit Research Institute
Tough times drive Americans to take far more interest in serious issues
Survey Shows Interest in Celebrities Waning
Whether or not Americans heeded President Obama’s inaugural admonition to “put away childish things,” they have certainly developed a lot more interest in serious issues. A new national survey shows self-declared interest in a raft of weighty matters has grown, while almost half of Americans (48.2 percent) say they’ve become less interested in celebrities over the past 12 to 18 months.
Losing their appetite for celebrity antics, 46.4 percent of Americans are more interested in general news than they were. This news-hungry trend is even more pronounced among men than women, with 51 percent of men versus 41.7 percent of women more interested. Taking account of those rating themselves “less interested” (6.7 percent of men versus 10.9 percent of women), the net margin of greater interest in the news is 44.3 percent for men and 30.8 percent of women. This gender skew pertains to all major fields of interest in the survey; higher net percentages of men than women rate themselves more interested.
The findings come from an online “mood monitor” survey of 388 Americans across the country that was commissioned by global integrated marketing communications agency Euro RSCG Worldwide in February 2010. MicroDialogue collected and analyzed the data.
Regarding their own local politics, a net 29.4 percent of men have become more interested, compared with 16.7 percent of women. Men even show a net increase in interest in the local politics of other areas (net 10.8 percent more), whereas women show a net decrease of interest (net 6.2 percent less). Moving the focus up to the politics of their own state, there’s a surge of greater interest with net 47.9 percent more men and net 30.2 percent more women. In terms of the politics of other states, net 23.1 percent of men and 9.4 percent of women are more interested. There are clear, strong increases in interest for domestic politics in general, although the margin is far higher with men than with women (net 42.3 percent men versus net 24.5 percent women).
The Great Recession and head-spinning news from Wall Street have pushed economy and finance firmly center stage for Americans. Huge net margins of 63.4 percent of men and 52.1 percent of women rate themselves more interested in these topics than they were 12 to 18 months ago. Business and corporations have also come in for higher levels of interest, although they’re far more of a guy thing: Net 42.3 percent of men are more interested, compared with net 16 percent of women.
It’s no surprise that health care has garnered far more interest over the past 12 to 18 months. Among men, 67.6 percent are more interested, and among women 61.5 percent are more interested. What is surprising is that a small minority rate themselves less interested in the issue: 6.2 percent of men and 8.3 percent of women. This suggests some Americans have been turned off of the whole subject, despite–or perhaps because of–the health-care reform tug-of-war in Congress and across the media.
Although there are consistently higher percentages of men who are more interested in the big issues, there are consistently higher percentages of women who feel growing disapproval with the issues compared with 12 to 18 months ago. With local politics in their area, a net 1.5 percent of men disapprove (25.8 percent more approving versus 27.3 percent more disapproving) but net 14.6 percent of women disapprove (15.1 percent more approving versus 29.7 percent more disapproving). Feelings about politics in respondents’ state of residence are slightly more soured: Net 13.9 percent of men and net 19.3 percent of women disapprove. Farther from home, feelings about domestic politics in general are even more negative: Net 16.9 percent of men and net 26 percent of women are more disapproving now compared with 12 to 18 months ago.
As well as rating their opinions, respondents were also asked in the survey to give their views on their state in their own words. Although some expressed partisan views and a few praised their local politicians, many others longed for politicians to focus on doing a better job. There was a strong current of opinion in favor of dumping incumbents. As a respondent from New York put it: “Politicians have lost the will to represent the people who voted them in. They are only interested in their own power and interests. Most cannot be trusted. When political parties are too involved with their own politics, we the people and the USA suffer greatly.”
With job losses, bailouts and bonuses still looming large, economy and finance score strong overall negative ratings: Net 29.4 percent of men and 45.4 percent of women disapprove more now. It’s a similar story with business and corporations: Net 31 percent of men and 40.6 percent of women now feel more disapproving compared with 12 to 18 months ago.
“A year into the Obama presidency and 18 months into the economic crisis, Americans are looking more closely and more critically than ever at the public issues that affect them,” said Marian Salzman, president of Euro RSCG Worldwide PR, North America. “As households struggle to manage their budgets in the face of a dire employment market, they’re looking more closely to see whether people in power are behaving more responsibly, too.
“Many Americans aren’t liking what they’re seeing. The stronger ‘disapprove’ scores from American women across major issues suggests that women had higher hopes for things to be managed better,” continued Salzman. “With this disgruntled mood prevailing, we can expect a lot of heat and upset in election contests this year. The country was fractious and divided even when the economy was booming a few years ago. It’s hard to see the mood sweetening as long as debt and budget cuts are the order of the day.”
Respondents are also bracing themselves for higher taxes: Net 39.7 percent of men and 39.1 percent of women are pessimistic about taxation levels in the foreseeable future. Adding to the gloom, net 22.7 percent of men and net 45.8 percent of women are pessimistic about the cost of living.
Source: Euro RSCG Worldwide
Employers are using strategic workforce planning to help manage HR issues as the economic recovery progresses
As the recovery progresses, employers will shift their focus from cutting labor costs back to preserving talent and investing in key segments of their workforce – issues at the very heart of strategic workforce planning (SWP), The Conference Board reports.
“Employers who’ve been forced to focus on reducing headcount will return to deciding whether to buy, build, or rent the skills necessary to meet future business needs,” said Mary Young, principal researcher at The Conference Board and author of a new report, Strategic Workforce Planning in Global Organizations.
“The economy’s impact on SWP is likely to be moderated by the level of credibility, acceptance, and integration that SWP had attained before the economic crisis turned things upside down,” Young said. “In companies that were just getting their feet wet with SWP, the global economic downturn may have put a halt to these efforts, although only temporarily. The same is true in companies where immediate financial pressures required that SWP shift from long-term planning to short-term problem-solving. But in companies where SWP was well established, SWP served as a critical tool for managing through the economic crisis.”
SWP is the formal process that connects business strategy to human resource strategy and practices, and ensures that a company has the right people in the right place, at the right time, and at the right cost. SWP and its attendant investment plans take into account such factors as which skills will be critical to business success and which roles will be hardest to fill, as well as regional variations in human capital quantity, quality, and ROI.
“Strategic workforce planning enables companies to make these decisions based on sound data and analytics,” says Young. “Business leaders can use strategic workforce planning to evaluate a variety of options, such as, for instance, the costs and feasibility of building a new plant in Russia, Brazil or India, based on the local skills supply, infrastructure and labor laws.”
The new report finds that, while some SWP strategies work fine on a global scale, others need regionalization to accommodate differences in demographics, skills levels, and labor costs. One case study shows how, in just four years, 3M moved from knowing very little about its workforce to clearly understanding global characteristics and trends, and important regional differences.
“As the company tries to execute a critical business strategy–shifting its ‘center of gravity’ from the United States to other global locations–human resources has become an integral player,” Young explains.
The report also includes case studies on Saudi Aramco, Sun Microsystems, and UBS.
Source: The Conference Board