Why Global Cross-Border M&A Deals Are On The Rise

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7:00 AM EST June 30th, 2014

Ensuring a business is able to successfully operate in one country is usually a large enough challenge for entrepreneurs. However, according to a recent survey from Baker & McKenzie, nine out of ten executives have found that cross-border merger and acquisition deals have been successful.

In conjunction with FT Remark, Baker & McKenzie interviewed 350 executives who have recently worked on a cross-border deal, according to the Khaleej Times. The research showed that during the first quarter of 2014, $263.1 billion worth of cross-border deals took place, which is close to a post-crisis high.

Will Seivewright, a partner at Baker & McKenzie Habib Al Mulla in the UAE, told the news source that the survey results show great insight into the M&A activity in today’s business world.

“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,” Seivewright said.

There are several reasons behind this trend, according to the research firm. First, the desire to have access to intellectual property is the main motivator for companies that are making acquisitions in Japan, North America and Europe.

Overall, 34 percent of respondents said that having access to customers is the most important motivation for cross-border deals. Additionally, 25 percent of surveyed executives said that they wanted better access to intellectual property, while 21 percent reported that access to industrial assets was a key priority.

Cross-border transactions are truly becoming a better option for some businesses. Last month, PYMNTS sat down with BlueSnap CEO Ralph Dangelmaier to discuss why more merchants should look into cross-border payments.

According to Dangelmaier, BlueSnap recently created new plug-ins that enables merchants to easily sell in 180 countries, by using those e-commerce platforms.

“We talk to merchants all the time, and a lot of research out there shows that the 25 percent of current ecommerce merchants that are trying to sell cross-border are full of excuses on why it’s too difficult,” Dangelmaier said. “We’re trying to provide no excuses to sell overseas – our part in helping the global economy.”

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