In April of 2013, global law firm Baker & McKenzie, in conjunction with the Economist Intelligence Unit (EIU) published a study outlining current trends in the cross-border M&A market. The results of that study, entitled Opportunities Across High-Growth Markets: Trends in Cross-Border M&A, provide insight into how both the corporate sector as well as their professional advisors might most effectively facilitate these transactions.
As the study initially outlines, “Shifting patterns in outbound M&A signal a greater proportion of deals involving high-growth markets in the years ahead…What we confirmed through this research” as Baker & McKenzie outlined “is that it is no small feat to turn promising GDP growth in a new market into profitable revenue.”
Some of the studies findings, which can help inform any-cross border corporate or professional services business development strategy, include:
- “Companies in the emerging and high-growth market countries that were less affected by global economic woes are eager to expand, and one of the quickest routes to do so is via M&A.”
- “Investment activity is still strong into Brazil, Russia, India, China and also South Africa, which officially joined the BRICS bloc in December 2010, but some buyers are expanding the scope of their targets to include a promising next generation of high-growth markets, including Indonesia, Turkey and Vietnam, among others.”
- “It is not just Western companies on the acquisition side anymore. Companies from across high-growth markets are increasingly turning their attention to targets in both developed and emerging markets. For example, Chinese companies spent more than US $10 billion on 46 inbound deals in the US in 2012.”
- “As growth strategies become more varied and include a wider range of
- target countries, anti-corruption and anti-bribery laws are being enforce more stringently and with farther reach.”
- M&A advisers expect to see cross-border transactions into and from these markets continue to increase over the next few years.,, To succeed, however, company executives will need to develop new strategies to leverage opportunities, mitigate risk and thrive in unfamiliar markets.”
Professional Services: Distinguishing your firm among clients in global M&A
- In the increasingly complex and challenging market Baker & McKenzie and the Economist Intelligence Unit (EIU) outline, professional services firms can implement broadly four key strategies to maximize their ability to act on more transactions. They are:
- Function as a source of M&A intelligence gathering for purposes of offering newly found transactions to existing or prospective clients.
- Offer a suite of custom services to clients to provide them with turn-key M&A solutions to increasingly complex emerging market opportunities.
- Establish an internal proactive, not reactive, proprietary pipeline of new M&A deal flow available to clients and potential clients.
- Actively work deal life cycle from opportunity identification to consummation.