Reply To: Cross Border M&A Risks

#109494

Paul Gray
Participant

Cross Border M&A are indeed high risk endeavors and this is especially so in environments where the ease of doing business create several gaps relative to the ideal. That said, it would be incumbent on the acquirer to ensure a robust due diligence of the target and be extremely clear in terms of the acquisition objectives. With the foregoing, the integration planning activities will need to commence early with the expectation that an Integration Management Office will be required in the foreign land to manage and oversee the integration. That said, it would also be critical that the integration management office as far as is possible, includes senior leadership from the target to ensure buy-in but also to enable critical exchange in designing various aspects of the integration plan. At all costs, the acquirer, in environments as you have described above, must take note of the local idiosyncrasies and use those to scale down any optimism as it relates to synergy gains. Said idiosyncrasies should be factored in the integration plans, such that they are realistic, assuming the transaction is compelling.

Culture is a key component to cross border M&A from my experience and it is important to as far as possible ensure that local management play a key and vital role in all the integration endeavors to ensure a greater probability that the transition and success curves are flattened.

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