As the middle market matures, private equity investors and strategic buyers are increasingly seeking deal sources beyond the borders of the U.S.
The BRIC nations of Brazil, Russia, India and China certainly continue to provide opportunities, but lesser-known, faster-growing countries from Bangladesh to Vietnam are also beginning to entice investors drawn by the future purchasing power of rising middle classes. As a result, the value of global M&A investments that targeted the world's key growth markets surged by 5 percent in 2012, compared with the previous year, to more than $162 billion, according to law firm Freshfields Bruckhaus Deringer.
In this special report, Mergers & Acquisitions examines the M&A opportunities and challenges for U.S. dealmakers in 10 emerging economies:
Editor's Note on Deals, Definitions and Descriptions
* To determine the most promising emerging economies in the world, we turn to Goldman Sachs, which in 2005 identified the Next 11 nations predicted to blossom after the BRIC countries. Originally, the Next 11 included: Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey and Vietnam. But, to comply with U.S. sanctions against Iran, Goldman Sachs no longer invests in Iran. Launched in 2011, the Goldman Sachs N-11 Equity Fund (GSYAX) is down 2 percent for the year as of mid-June, suffering recently from concerns the Federal Reserve will pull back on quantitative easing, a shift in monetary policy that would decrease interest in emerging markets on the part of public-market investors but is not expected to have an impact on private equity investors or strategic buyers attracted to these fast-growing economies. Congratulations to Jim O'Neill, the economist who coined the terms BRIC and the Next 11, on his retirement in 2013 as chairman of Goldman Sachs Asset Management.
* For country descriptions, we compile information from interviews with sources and U.S. State Department websites. For population figures and gross domestic product (GDP) values and growth, we rely on the U.S. Central Intelligence Agency's The World Factbook. Unless otherwise noted, population figures are projected as of July 2013, and GDP figures are from 2012.
* For the definition of Southeast Asia, we use the 10 members of the Association of Southeast Asian Nations (ASEAN): Brunei, Burma (also known as Myanmar), Cambodia, Laos, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. For the definition of South Asia, we use the eight countries identified by United Nations Educational, Scientific and Cultural Organization (Unesco): Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka.
* For deal data, our primary partner is Thomson Reuters. The charts include deals that involved a U.S. company as the acquirer or target and were completed in 2012 or the first quarter of 2013.
* Thanks to research editor Toby Walters and to copyeditor Keith Button.
* Special thanks to art director Nikhil Mali.