Mergers soar

OECD economies are in the doldrums, but the trend in global mergers and acquisitions has rarely been more buoyant. International M&A investment in 2011 reached $822 billion as at 21 October. If this pace can be sustained, international M&A will top $100 billion by the end of the year, a 32% increase over 2010 (see chart).

Click to enlarge

That would match the third highest level ever reached in 2006. Even if M&A activity were to come to a stop in Q4, 2011 levels will still be 7% higher than those reached in 2010.

M&As can be a sign of rude business health, but in the current weak international environment, higher activity reflects stressed businesses with sagging stock valuations being gobbled up by healthier firms eager to strengthen their market positions. Finance is a case in point, and in 2011, the financial sector has dominated international M&A deals, even though the pace was well down on 2010 when finance accounted for 28% of all international M&A.

The current high level of merger activity may also reflect a hunt by capital for relatively low risk-high demand investments. Little surprise therefore that for a second year running, the oil and gas sector was the second most active sector for M&As, with healthcare in third. Both sectors account for 10% of total international M&A.

Mining and the utilities and energy sectors have both shown strong growth too. International M&A deals in mining are up 67%, from $34 billion in 2010 to $57 billion in 2011; at time of writing there were over two months remaining in the year. International investment in the utilities and energy sectors more than doubled in 2011, growing from $23 billion in 2010 to $50 billion in 2011.

Emerging markets are another factor that has been driving the upward trend. Most international investment still originates in either North America or Western Europe, but the emerging markets have become important players.

China (including Hong Kong, China) in particular became the fourth largest source of international M&A in 2011, with 7% of the world total. In 2010 it ranked second with 10%.

Less than 3% of international M&A originated in China as recently as 2007, underlying just how fast China has shot up. China accounts for a third of international M&A from emerging economies, which accounted for 20% of the global total in 2011.

The US and the UK are still the top destinations for international M&A, followed by China, Italy, and France, each with 6% of the world total. Brazil received $44 billion in international M&A, making it the 6th most popular target, while India received $21 billion (12th place) and Russia $18 billion (16th place). As a group, the emerging and developing economies received $182 billion in M&A investment, 22% of the global total in 2011.

Amid all this M&A activity, policymakers may well wonder if M&As do any good. Some major companies today expanded in part through M&As, such as EasyJet in Europe. Such mergers work by bringing new capital and management to firms, and helping them expand. But critics say mergers can destroy value and undermine competition by diminishing market choice, which is why regulators must watch them carefully. M&As are sometimes followed by downsizing, which can make for a tense social climate. While many mergers last, others flop, and sometimes famously, as witness the Time Warner tie up with AOL in 2000 which ended in December 2009.

For further reading on this topic, visit or contact

©OECD Observer No 286 Q3 2011

Economic data


Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive print editions delivered to you directly

Online edition
Previous editions

Don't miss

  • IMF Finance and Development Magazine, December 2015

    Powering the Planet: The Quest for Sustainable Energy

    Read the magazine here
    Visit their website
  • In Iceland, geothermal power is being used for almost everything. Scientists and engineers from around the world are participating in a course at the United Nations University (UNU) to learn how to use geothermal energy in their own countries.
  • They are green and local--It’s a new generation of entrepreneurs in Kenya with big dreams of sustainable energy and the drive to see their innovative technologies throughout Africa.
  • Pole to Paris Project
  • Send a message from #EarthToParis.
  • From the World Bank: Managing the Impacts of Climate Change on Poverty
  • Black carbon causes millions of deaths every year and contributes to the warming of the planet. The United Nations Environment Programme explains how reducing black carbon can save lives and help combat climate change.
  • In order to face global warming, Asia needs at least $40 billion per year, derived from both the public and private sector. Read how to bridge the climate financing gap on the Asian Bank of Development's website.
  • How can cities fight climate change?
    Discover projects in Denmark, Canada, Australia, Japan and Mexico.
  • 10 climate-friendly habits everyone should adopt: Although the main aim of COP21 is to reach an international agreement on climate change between government stakeholders, it is also the perfect opportunity to remind citizens of how everyone can help to reduce greenhouse gas emissions in their day-to-day lives.
  • Climate: What's changed, what hasn't, what we can do about it.
    Lecture by OECD Secretary-General Angel Gurría, hosted by the London School of Economics and Aviva Investors in association with ClimateWise, London, UK, 3 July 2015.
  • Do you know the OECD’s web ending? Or which Serbian American engineer is famous for his electric cars? Try our latest OECD Observer crossword. It’s full of fun facts, simplex in style, and gives you the solution at the tip of a button. You can time yourself too.
  • French Economy Minister Emmanuel Macron came to the OECD on 18 September for a webcast discussion on economic reforms, inequality and the outlook, with OECD Secretary-General Angel Gurría. You can watch the event by clicking on the photo.

  • Climate change: “We should not disagree when scientists tell us we have a window of opportunity–10-15 years–to turn this thing around” argues Senator Bernie Sanders.

  • In the long-run, the EU benefits from migration, says OECD Head of International Migration Division Jean-Christophe Dumont.
  • Is technological progress slowing down? Is it speeding up? At the OECD, we believe the research from our Future of ‪Productivity‬ project helps to resolve this paradox.
  • An employee prepares breakfast in front of the Eiffel tower at the Parisian luxury hotel Le Plaza Athenee. Nowhere in the world has more accommodation available on Airbnb than Paris. Now the home-sharing website that has transformed budget travel is giving super-deluxe hotels a fright too.
    ©REUTERS/Stephane Mahe
  • Is inequality bad for growth? That redistribution boosts economies is not established by the evidence says FT economics editor Chris Giles. Read more on
  • Low interest rates here to stay for half a century, says OECD director Adrian Blundell-Wignall.
  • Bill Gates visited the OECD on 26 June. He met with the Secretary-General Angel Gurría to discuss areas of collaboration with his foundation and participated at a briefing session on official development assistance modernisation with OECD experts.
  • The People’s Republic of China decided to enhance longstanding collaboration with the OECD and to join the OECD Development Centre, in a historic visit by Chinese Premier Li Keqiang on 1 July to the OECD in Paris.
    Read about it on
  • Catherine Mann, OECD Chief Economist, explains on Bloomberg why "too much bank lending can slow economic growth".
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at .
  • Come va la vita in Italia? How's life in Italy? The OECD Better Life Index is an interactive online platform in seven languages that goes beyond GDP by offering important insights into measuring well-being and quality of life. Try it for yourself!

Most Popular Articles


What issue are you most concerned about in 2015?

Euro crisis
Global warming
International conflict

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2015