The Rise of Transnational Corporations from Emerging Markets
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The Rise of Transnational Corporations from Emerging Markets

Threat or Opportunity?

Edited by Karl P. Sauvant

This insightful book shows that foreign direct investment (FDI) from emerging markets has grown from negligible amounts in the early 1980s to $210 billion in 2007, with the stock of investment now being well over $1 trillion. This reflects the rise of firms from these economies to become important players in the world FDI market. The contributors to this book comprehensively analyze the rise of emerging market TNCs, the salient features of the transnational activities of these firms, the relationship of outward FDI and the competitiveness of the firms involved, their impact on host and home countries and implications for the international law and policy system.
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Chapter 1: The Rise of TNCs from Emerging Markets: The Issues

Karl P. Sauvant


Karl P. Sauvant INTRODUCTION The subject of this volume – the rise of transnational corporations (TNCs) from emerging markets: threat or opportunity? – is topical and important, and it poses a number of challenges that will require considerable policy attention in the future. 1.1 TOPICALITY The topicality of the subject is exemplified by a spate of recent high-profile takeovers by emerging-market TNCs of firms in developed and developing countries. Examples are: ● ● ● ● ● Lenovo’s (China) acquisition of the personal computers division of IBM (United States). When the deal was completed in 2005, Lenovo paid $1.25 billion with a total cost of $1.75 billion, including assumed debt. CVRD’s (Brazil) takeover of INCO (Canada) in 2007, for $16.7 billion. Tata’s (India) successful bid (against the competition of Companhia Siderúrgica Nacional of Brazil) for Corus (United Kingdom/ Netherlands). The deal was reached in 2007, for a total price of $13.5 billion. Hindalco (India) bought Novelis (US) in 2007 for $6 billion. Dubai Ports World’s acquisition of P & O Steam Navigation Company (United Kingdom), an event that led to an excited policy debate in the US as Dubai Ports World would then have controlled a number of ports in that country (Dubai Ports World eventually had to divest itself of its US assets). The sale for $6.8 billion dollars was approved in 2006. 3 4 ● ● ● ● Overview Cemex (Mexico) bought Rinker (Australia) for $15.5 billion in 2007, the largest takeover in Australia’s history. Lukoil Overseas Holding Ltd (Russia) purchased Nelson Resources Ltd (United Kingdom) in 2005...

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