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VALUE OF CROSS-BORDER DEALS SOARS 45 PERCENT; INVESTORS TARGET DEVELOPING MARKETS

 VALUE OF CROSS-BORDER DEALS SOARS 45 PERCENT;
 INVESTORS TARGET DEVELOPING MARKETS
 NEW YORK, April 13 /PRNewswire/ -- The first three months of 1992 mark an encouraging turnaround in the depressed cross-border M&A market, according to international accountants and consultants KPMG Peat Marwick. The value of cross-border acquisitions in the first quarter 1992 was $13.3 billion, an increase of 45 percent over the $9.2 billion recorded in the same quarter in 1991, putting an end to six consecutive quarters in which deal values had been lower than the corresponding quarter in the previous year.
 Lenz Neuhauser, KPMG Peat Marwick's national M&A director in Chicago cautions, however, this does not mean a return to the deal-driven era which ended in 1990. "The first quarter of 1991 was the low point. The quarterly average value of cross-border acquisitions in 1991 was $13.6 billion, and this year's statistics show that this level of activity is continuing," said Neuhauser.
 The KPMG study notes that the quarterly average value of cross- border acquisitions was $29.5 billion in 1990, and $32.6 billion in 1989. "Our statistics indicate that the cross-border M&A market has stabilized at a significantly lower level than before the Gulf crisis." said Neuhauser.
 The number of deals recorded by KPMG in the first quarter 1992 was 432, down from the 471 recorded in the same period in 1991. But KPMG expects this figure to rise as its quarterly statistics are updated in the coming months.
 Cross-border M&A activity is stabilizing around the same countries that dominated when the market was rising. France continued to be the major influence, paying $3.7 billion in the first quarter to 54 foreign companies. The U.K. spent $2 billion on 87 cross-border acquisitions, while the United States spent $1.8 billion on 65 transactions. Japanese companies spent $0.9 billion on 19 purchases.
 Buying interest was focused on Germany, where the $3.1 billion privatization of the east German petrol filling chain Minol by a consortium led by Elf Aquitaine (France), was the largest deal in the quarter. German cross-border sales were valued at $3.7 billion covering 46 deals, the U.S. was second most popular location for cross-border activity posting $2 billion for 64 sales, and the UK was third with $1.5 billion spent on 61 sales.
 The largest deals in the quarter suggest that investors will increasingly choose developing markets and will consider privatizations as part of their overall business strategy. In fact, three of the top 10 cross-border deals are privatizations (Minol; Heracles General Cement; Kilroot & Belfast West power stations) and the privatization process will continue to offer acquisition candidates, particularly in Eastern Europe and Latin America.
 European Community Continues To Attract Strategic Buyers
 The European Community's 1992 program will continue to be a key factor in the level of cross-border M&A, according to KPMG's Neuhauser. Cross-border sales of EC companies in the first quarter of 1992 were valued at $8 billion (253 deals) compared with $5.4 billion (272 deals) in the first quarter of 1991.
 "Many European companies have concentrated their business within their national markets. 1992 will bring increased pressures from strong foreign competitors, and will redefine the market, blending separate national markets into regional or even larger Europe-wide markets. Restructuring in preparation for this is a continuing feature of cross- border M&A," said Neuhauser.
 Current conditions in the M&A market favor such strategic restructuring, according to Neuhauser. "Prices and multiples are no longer being driven up by financial buyers. The significant decline in the number of financial buyers means that the strategic buyer, the company that is shaping itself for the future, can focus on negotiating the transaction rather than on a bidding war," he said.
 Changes in approaches to buying are also evident in KPMG's statistics. Four out of the five sales of EC companies included in the top 10 cross-border deals in the first quarter 1992 were purchases by consortia formed to carry out the acquisition. "This is a growing trend, requiring an extra layer of deal management," said Neuhauser. "To put a consortium together successfully requires a good understanding of the consortium members' objectives, as well as those of the seller. Negotiating is made more complex, both for the consortium member representing his partners, and for the seller."
 Through 135 offices in the United States, KPMG Peat Marwick provides industry-specific accounting and consulting professional services to leading multinational businesses with operations around the world. KPMG has more than 76,000 people worldwide and operates in 125 countries.
 -0- 4/13/92
 /NOTE TO EDITORS: To learn more about worldwide cross-border acquisitions and joint ventures, call KPMG Peat Marwick's merger and acquisition hotline at 1-800-932-KPMG. KPMG can also provide a list of the top 10 deals of the quarter, as well as the number and value of deals by country./
 /CONTACT: Lisa Meyer of KPMG Peat Marwick, 212-909-5108/ CO: KPMG Peat Marwick ST: New York IN: FIN SU: TNM


SM-TQ -- NY068 -- 7899 04/13/92 15:54 EDT
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Date:Apr 13, 1992
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