According to the research – conducted by London-based international firm Eversheds -- internal processes are as much to blame as external factors with the end result compromising the value of cross-border M&A deals.

Legal risk

The study – which involved more than 400 multi-national businesses that have worked on cross-border M&A deals in the last three years – found that nearly half recognised lack of post-deal integration as a common cause for deals not reaching their targets.
The report also suggested that legal risk is becoming increasingly important during the assessment of potential deals, with more than half of those surveyed reporting that they had spotted potentially damaging issues early enough to caution management about proceeding with the deal.

Growth pressure

Eversheds M&A partner Robin Johnson, commented: ‘The current economic climate has made the business of doing deals much tougher, with the research highlighting an acute awareness of risk in the process. However, company boards are under pressure to secure growth and M&A is an essential business tool for achieving this, in particular for organisations thinking about tapping into or increasing their penetration in new international markets.’