What is driving cross-border M&A?
Nearly nine-in-ten (86%) companies said their most recent cross-border M&A transaction was a success. Going Global report identifies the five significant motivating factors for M&A:
- Building scale through the acquisition of customers or distribution networks. This raises particular issues around the credibility of revenue streams, antitrust and competition and the complex process of retaining customers post acquisition.
- Acquiring intellectual property. Such deals can frequently raise challenges related to ownership, data and brand protection and the need to rationalize and consolidate structures and asset ownership in the post-merger process.
- Building a company's strength through the purchase of industrial assets. This is often associated with complex tax, human resources and compliance issues.
- Gaining access to natural resources. Almost invariably such transactions raise questions of politics, regulation and controls, and social and environmental impact.
- Adding skills and capabilities through the acquisition of human capital. This often requires careful planning to address complex cultural and political considerations as well as the development of policies and incentive programs to retain staff.