Australian companies could be take-over targets in H2/99

THE second half of 1999 could see a wave of international buyers looking for good value Australian companies as the Asian region starts to emerge from its recession, the KPMG Corporate Finance survey found.

Continued weakness in the Australian dollar, the bottoming of the commodity cycle and the global business view that Australia is a key commodity supplier could bring investors to Australian shores looking for take-over opportunity, KPMG Corporate Finance Australia national chairman John Anderson said.

The emerging markets were currently out of favour with inter national companies that were concentrating on safer investments in North America and Western Europe. “However, we expect the picture to shift somewhat in the coming year. Economic recovery in most Asian markets - no matter how muted - should revive con fidence in the Asian region and in Australia in particular which is seen as a commodities supplier to Asia,” he said. “The second half

of 1999 may see a wave of corporate bargain hunting by western buyers looking at ‘good value’ Australian companies”.

While the regional economic crisis had affected some countries more than others, it had the effect of discouraging western com panies from investing in the whole region, KPMG said. “There is little sign of cross-border acquisition in Asia turning up and it may be some time before international businesses regain their confi dence in the region,” Mr Anderson said.

The survey data was compiled from more than 5000 cross bor der mergers, acquisitions and take-overs in 1998.

Despite the aversion to the Asia-Pacific region, global cross border mergers accelerated in 1998 but did experience a lull from August to October due to the emerging markets crisis, in Latin America and Russia as well as Asia. The aggregate value of the international deals rose to a record $544.31 billion from $341.02 billion in 1997. (AAP) ■