A merger acquisition is a complex endeavor that requires
the seamless integration of peoples, processes, and systems.
Now, when the entities or owners come from different geographies,
that usually adds another layer of complexity.
Post-merger integrations or PMIs that stretch across continents
and among developed and developing markets offer a vivid
case in point.
Take the example of Asia, which accounts for one-third of the
total number of M&A deals.
Up to 50% of the deal value in Asia involves cross-border
transactions and we see three common themes in such
cross-continent Asian mergers and acquisitions.
Firstly, many companies have closely held or sovereign
ownership, and as a result, businesses in the region embody
belief systems, philosophies, and visions that may seem very
different from traditional market PMIs.
We often help our clients explore partnerships, joint
ventures, or alliances with their intended partners as a way
to build relationships before making a long-term commitment to
a merger or acquisition.
Secondly, many of these deals take place under the auspices of
two distinct regulatory and capital market regimes and we
encourage and support the partners' regulatory teams and
the joint integration management team to be sensitive to the
realities of each organization's external environment.
This can help the partners jointly develop realistic and
achievable value creation pathways in areas such as people
synergies.
Third, many Asian cultures tend to favor a nuanced approach to
decision making.
But integration requires leaders to make tough, decisive choices
on sharing old practices, integrating new technology,
shuffling leadership teams, and so forth.
And that's why we strongly encourage our clients to invest
the necessary time in understanding and embracing the
relevant cultural nuances and preparing themselves to make
these tough decisions.
Although many cross-continent PMI share certain common themes,
it's important to note that no two integrations are exactly the
same.
And in fact, it is precisely the size, scale, and the cultural
diversity of the Asian continent that makes the region such an
exciting arena for creating superior integration outcomes.