The rise in cross-border transaction

Aurkene Ochoa de Zuazola,  M&A Analyst



In this increasingly global and interconnected world, cross-border corporate transactions are gaining importance. The local/national competition and exposure that companies face is now on an international and global level. These and many other reasons discussed in this article have exponentially increased the number and size of cross-border M&A transactions in recent years.

In fact, according to data published by Bloomberg Law Analysis, in 2020, there were 3,131 announcements of cross-border merger and acquisition deals valued at $1 million or greater, with an aggregate value of $1.06 trillion. This cross-border deal volume accounted for 39.7% of all global M&A volume in 2020—nearly equal to the 39.3% market share that cross-border deals had in 2019.

These trends in the M&A segment have not gone unnoticed at IMAP, which is known for its strong international focus backed by over 500 merger and acquisition specialists located in the more than 40 countries where it operates. Of the 210 or more deals closed by the organization in 2020, 30% were for cross-border transactions.

Based on the analysis of cross-border deals closed by IMAP, the sector that is most exposed to these types of transactions is Technology, followed by Consumer & Retail, Industrials and Healthcare to round out the top 4 areas in which IMAP has closed cross-border transactions during the 2019 – 2021-Q1 period.

Industry breakdown of cross-border M&A transactions closed by IMAP (%;2019 – 2021Q1)


What factors are driving this upward trend in the number and size of corporate cross-border transactions?

To answer this question, we should take a look at both sides of the transaction: the buyer and the seller.

Cross-border transactions, from the buyer’s perspective

As mentioned earlier, globalization has radically changed the competitive setting in which companies operate, and even smaller businesses operate in a market where their competitors are not just local. This means that international expansion and access to new geographic markets has become a top priority for anyone who strives to remain competitive. In most instances, mergers and acquisitions are the best solution for facing this challenge because they tend to be fairly quick and less costly than greenfield investments or organic growth.

Additionally, acquiring local businesses gives buyers exclusive access to key knowledge and market positioning, which cannot be obtained through other growth channels. Entering a new market by the hand of a company that has expertise, customer and vendor relationships, and/or a well-positioned brand is an important incentive when selecting cross-border M&A transactions as an alternative for business development.

However, international expansion is not the only goal that drives investors to opt for cross-border M&A transactions. Obtaining new technologies or skilled employees are two key objectives that justify this type of strategic move. In a global setting, buyers do not place geographic restrictions on their investors when adding new tech developments and teams of professionals that could define the company’s future outlook. New technologies and qualified hires for business projects are two fundamental goals at the heart of the corporate and strategic development plans of a growing number of companies. In order to meet these strategic objectives, businesses must continuously seek out opportunities on a global level, either on their own or by relying on advisors with access to merger and acquisition opportunities on a national and international level. In summary, having access to information about potential opportunities is key for companies that want to grow through corporate transactions.

Cross-border transactions, from the seller’s perspective

When selling a company, various emotional and economic factors must be considered in the process of selecting the buyer.

Leaving the entity in the hands of a reputable market player with a strategic plan that includes boosting the company’s growth potential and is committed to continuing its operations is usually a top priority when selling a business. Inevitably, finding the ideal candidate entails doing a global search that increases the likelihood of catching the attention of a renowned player who will consider investing in the company.

Also, there are many instances in which a company’s potential lies in its positioning and knowledge of the local market. A well-positioned brand, stable customer and vendor relationships, and knowledge of the local supply and demand are key aspects that determine how much a business is worth. In this sense, international corporations without a presence in the market where the local business operates will analyze these aspects closely.

In line with what was mentioned earlier, and regarding the economic factors that play a decisive role when closing a transaction, it is important to note that cross-border M&A transactions are usually accompanied by a premium on the company’s valuation. As explained earlier, the strategic objectives pursued by buyers (entering new markets, acquiring technology and skilled employees) are so important that they will pay premiums on the value of the company being considered. This is a key factor to consider when undertaking the process, and specifically when negotiating the company’s sale.

How to enter the global M&A market?

Having exposure and access to M&A opportunities on a global level is a challenge for buyers and sellers alike. However, relying on a team of experts with an international presence, such as IMAP, is the best way to undertake this type of situation. IMAP Albia Capital has the knowledge and access to international markets that clients want. We also have local partners in more than 40 countries to ensure close, direct and agile communication.

IMAP Albia Capital offers an international solution for an increasingly global challenge.


Scroll to Top