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Global cross-border M&A activity on rise

The number of global cross-border M&A transactions in 2014 is on the rise and close to its post-crisis high, experts recently revealed.

Working with FT Remark, Baker & McKenzie surveyed 350 executives, who have recently undertaken cross-border deals, and found that powerful macroeconomic and political forces continue to provide impetus to globalisation. In addition, companies around the world are driven by their strategies to move into new markets and jurisdictions.

During the first quarter of 2014, $263.1 billion worth of cross-border deals took place, close to a post-crisis high. Research results showed that 34 per cent of respondents said that access to customers is the most important motivation for cross-border deals, followed by access to intellectual property (25 per cent), access to industrial assets (21 per cent), access to natural resources (12 per cent) and access to human capital (eight per cent).

The results also showed that the desire to access intellectual property is the prime motivation for companies making acquisitions in Japan, North America and Europe. Human capital is very often the second-most important consideration for companies undertaking cross-border deals. Also, the desire to acquire industrial assets is a prominent motivation for cross-border deals in all markets, with the exception of Africa.

Will Seivewright, partner at Baker & McKenzie Habib Al Mulla in the UAE, said: “This report provides great insight into the deal trends we are seeing, and highlights the strength of the firm’s global M&A platform, which combined with true local expertise is one of the key determinants cited in the report as leading to a successful transaction.”

He added: “With almost 90 per cent of respondents describing their recent deals as successful, and nearly a half of respondents in the Middle East planning further transactions in the next two years, with a further upturn in cross-border deals in the first quarter of 2014, it appears that the M&A market is continuing to move in the right direction.”

— rohma@khaleejtimes.com