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Clifford Chance

Cross-border M&A: Perspectives on a changing world

Client Briefing

3 May 2012

There is increasing appetite for cross-border deals, as businesses seek growth outside their home markets.

Findings from Clifford Chance's new report Cross-border M&A: Perspectives on a changing world - a major multi-regional survey into how large companies view the opportunities and risks to cross-border M&A - reveals that emerging, high-growth markets are the main focus for future growth.

Almost 80 per cent of those surveyed also said that their current growth strategy was to develop their core business as opposed to diversifying.

The survey - conducted by the Economist Intelligence Unit on behalf of Clifford Chance - also reveals that protectionism and political pressure are among the most significant regulatory risks facing companies entering new markets.  In addition, concerns about post-deal integration, particularly bridging cultural differences are another significant challenge to cross-border M&A.

Among the other main findings of the survey is a recognition by companies that alternative deal structures, such as joint ventures and strategic partnership arrangements, can play an important role in managing the risks associated with entering a new market.

Matthews Layton, Clifford Chance's global head of Corporate, said that many companies with strong balance sheets and cash resources have the appetite and confidence to pursue the right M&A opportunities, to strengthen and expand their core business, particularly in high-growth markets.

But he also warned: "In many markets and sectors, there is a heightened level of scrutiny from regulators, politicians and shareholders alike, set against the backdrop of heated competition for the best assets.  Sensitivity to the political and socio-cultural challenges in specific regions can be as important to the success of a deal as clearing the regulatory hurdles."

Some key findings from the survey are available here:

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Cross-border M&A: Perspectives on a changing world

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