OECD expects international M&A deals to fall by 56% in 2009

The Organization for Economic Cooperation and Development (OECD) said it expects international mergers and acquisitions (M&As) to fall by 56% this year compared with 2008, the largest year-on-year decline since 1995, reports PTI.

The estimate is based on OECD's analysis of data for international M&A activity up to 26 November 2009, OECD said in a report.

The fall was largely due to the 60% decline in the value of cross-border M&As by companies based in the OECD area, to $454 billion in 2009 from over $1 trillion in 2008, it said.

However, this phenomenon was also due to the first sharp declines in M&A activity in major emerging economies—international M&A activity by companies based in Brazil, China, India, Indonesia, Russia, and South Africa fell by 62% to $46 billion in 2009 from $121 billion in 2008.

M&A activity in these countries is forecast to fall by almost 40% this year to just over $80 billion from just under $140 billion in 2008, the organisation said.

Speaking at the recent opening of the OECD Global Forum on Investment in Paris, OECD secretary general Angel Gurria said that governments needed to “do more” to promote business investment.

"Against the backdrop of a fragile global economy and sharp declines in international investment activity that have now spread to the emerging economies, the international investment policy community cannot afford to relax," Mr Gurria said.

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