Global Mergers and Acquisitions | How-to Guides for running your business from Business.com

Global mergers and acquisitions are more attractive now than ever before thanks to a falling dollar. Using their own currency, foreign consumers and companies are able to buy American goods and companies at what they perceive to be bargain prices while paying American entrepreneurs in dollars that buy as much as they always have in the United States. One way for small businesses to benefit from a declining dollar is to consult with international investment bankers entering the global M&A market.

Global mergers and acquisitions make sense sometimes; it depends on your business plan. Your product or service needs to transcend borders. Obviously a small hamburger chain is not going to fare well in Hindu nations, and will face stiff competition from already entrenched U.S. giants, such as McDonald’s, in foreign countries. International acquisitions might help a struggling clothing designer obtain access to cheaper labor or supplies. A global merger might rapidly open new distribution channels for that clothing company.

International investment banking facts you need to know:

Global M&A activity is measured in trillions of dollars a year. Large markets offer opportunities to knowledgeable participants.
Cultural differences can make negotiations difficult. It’s best to use experienced international investment bankers.
Global acquisitions allow companies to gain access to customers or suppliers.
Global mergers need careful planning to ensure that the companies successfully combine their operations.

Action Steps
The best contacts and resources to help you get it done

Global acquisitions can give a company global presence quickly

Small companies should consider global M&A as an opportunity to rapidly grow their business. If your company's annual revenue is below $2 million, consider international acquisitions to boost sales. An international investment banker can explain the process.

I recommend: Use the ZEPHYR database or a global M&A specialist firm, such as Woodbridge Group, to identify potential targets. AttractCapital can help you line up financing.

Go slowly to ensure that a global M&A is the right step for your business

Test the waters with a joint venture prior to undertaking either an international acquisition or global merger.

I recommend: Consult with experts in Europe or Asia. European-based M&A International, which handles transactions in more than a dozen languages, advises on all aspects of joint ventures and can help you identify partners, structure a deal and raise financing. The Tokyo office of Morrison & Foerster has been ranked as the No. 1 legal advisor for joint ventures in Asia.

Global mergers and acquisition offer a chance to grow your company without giving up control

Look to international mergers as a way to find new markets and gain expertise while retaining control of the company. In a global merger, you partner with another company while gaining access to new markets. After identifying a market you want to enter, find an international investment banker with expertise in that region.

I recommend: If looking in France, consider BNP Paribas; Cenciarini & Co. is a market leader in Italy; EON Bank Group knows how to finalize deals in Malaysia. It’s important to find the best international investment bankers that you can, with a presence where you are looking to expand.

International mergers might be the first step towards meeting a company's long-term goals

Think of global M&A as a first step towards a public listing of your company. Selecting the right global M&A team can put you on fast track towards a U.S. stock exchange listing.

I recommend: Use international investment bankers who are familiar with the listing requirements, and tell them you want to move in that direction. That way, companies like Greenhill & Co, Deutsche Bank and RBC Capital Markets, will be able to find suitable international merger and acquisitions candidates and apply the due diligence to the often arduous listing process.

Tips & Tactics
Helpful advice for making the most of this Guide

Before consulting with international investment bankers, make sure your company is a suitable candidate for international mergers. Most global M&A activity involves larger companies, those with annual sales of at least $2 million.
Service companies need to have an international appeal before global mergers and acquisitions should be considered, and market research should be completed before beginning the expensive international investment banking process.
Companies that gain an international presence through international mergers face currency risk. This can help or hurt earnings, but the impact of currency fluctuations can be minimized through hedging strategies.

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