M&A Cross-Border: Opportunity of Investors

Mergers and acquisitions (M&A) are a strategy for companies seeking growth, international expansion, and increased competitiveness.

According to the 2024 Mergers and Acquisitions Survey conducted by KPMG, the number of transactions in Brazil recorded a 17% growth, indicating a market recovery.

This movement not only underscores the relevance of M&A as a business strategy but also highlights the growing interest of Brazilian companies in pursuing opportunities abroad.

Eyes set abroad: why internationalize?

Internationalization has established itself as a strong trend in the M&A sector. In the second quarter of 2024, 170 cross-border transactions were recorded, showcasing the growing interest of companies in expanding their global operations.

Mergers and acquisitions between companies from different countries provide strategic advantages, such as access to new markets, technologies, and capital, as well as risk diversification.

However, these operations require a deep understanding of the laws and regulations of each country, as well as the ability to integrate different organizational cultures to ensure a successful transition.

How to structure a successful long-term transaction?

Para garantir o sucesso de uma operação cross-border, é essencial adotar um processo estruturado de M&A. A compra e venda de empresas deve seguir etapas bem definidas, como:

To ensure the success of a cross-border operation, it is essential to adopt a structured M&A process. The purchase and sale of companies must follow well-defined steps, such as:

• Strategy definition – identify clear objectives and develop an internationalization plan aligned with the company's vision.
• Market Research – map sectors and target companies that can add value to the business.
• Accurate Valuation – properly assess the value of the target company, facilitating more favorable negotiations.
• Rigorous due diligence – thoroughly examine legal, regulatory, tax, labor, environmental, and technological aspects, ensuring the transaction complies with the requirements of the countries involved.

The proper execution of these steps reduces risks and increases the chances of successful integration, allowing the company to fully capitalize on global market opportunities.

Opportunities in the cross-border M&A market

The cross-border mergers and acquisitions market has proven to be highly dynamic, with certain sectors and regions standing out as the most promising for investors.

According to a KPMG's research, the information technology sector continues to lead the ranking of the most active sectors in mergers and acquisitions, driven by the growth of digitalization and the pursuit of innovation.

Close behind, the food, beverage, and tobacco sectors have been showing high activity, reflecting brand consolidation and the demand for higher value-added products.

Geographically, São Paulo remains the main hub for transactions in Brazil, concentrating 52% of M&A operations. In international transactions, the United States leads with 40.6% of operations, demonstrating strong interest in acquiring Brazilian companies.

Besides the U.S., countries like Canada, Mexico, Spain, Colombia, Switzerland, Argentina, and Germany also rank among the markets with the highest volume of transactions, reinforcing the global appetite for growth through mergers and acquisitions.

Take the first step to expand your business internationally

Cross-border M&A operations involve challenges such as regulatory, cultural, and organizational differences that can hinder the integration of a foreign company with a Brazilian one.

Each country has its own regulations, which can make the process complex. Moreover, differences in culture and values can impact communication and management, making integration a critical factor for the success of the transaction.

However, when well-structured, international mergers and acquisitions can yield high returns and add long-term value.

To avoid common pitfalls and ensure a successful negotiation, relying on specialized financial advisory services is essential.

Upside Investment has a team of specialists ready to structure your cross-border M&A strategy.

Get in touch and find out how to turn your operation into a global success.