| With the world of mergers and acquisitions (M&A) now truly global, companies are increasingly seeking targets in far-flung destinations as well as their own back-yards. A new survey from Mercer and its sibling firms, Marsh and Kroll, indicates where companies see the greatest risks and opportunities for cross-border M&A activity. The survey, conducted in conjunction with The Economist Intelligence Unit, includes responses from 670 executives with organizations around the world. |
Attractiveness of regions as M&A destinations
Survey respondents were asked how the various regions of the world would figure into their M&A plans over the next 18 months. Nearly six in 10 respondents (57 percent) said that the rapidly developing economies of China, India and Southeast Asia would figure significantly or very significantly into their companies’ M&A strategies, well ahead of the figures for the next two regions, North America (42 percent) and Western Europe (41 percent).
Less-attractive regions from an M&A perspective included Eastern Europe (31 percent said it would figure significantly or very significantly into their companies’ M&A strategies), Latin America (29 percent), Middle East (27 percent), Australia, Japan and Korea (25 percent) and Africa (19 percent).
Overall risk environment by region
Every cross-border transaction carries risk, but the severity and nature of those risks varies widely from region to region. The executives surveyed were asked to rate the different regions on a range of risk factors covering political, infrastructure, economic, cultural and labor/talent issues that could affect the success of a cross-border transaction. It comes as no surprise that, broadly speaking, respondents divided the world’s regions into two: less risky developed economies and riskier developing ones. Africa was rated as the riskiest region, while North America and Western Europe were perceived as having the least amount of overall risk.
| Region |
Respondents Rating Risk as Severe/Very Severe |
| Africa |
70% |
| Middle East |
49% |
| China, India, and Southeast Asia |
45% |
| Latin America |
43% |
| Eastern Europe |
28% |
| Australia, Japan and Korea |
14% |
| North America |
14% |
| Western Europe |
12% |
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