INTERNATIONAL M&A - IMPORTANCE OF CULTURE

The Envol Capital team speaks over eight languages and has experience working in Asia, Europe, North America and Latin America. Our team has worked on acquisitions and business development in numerous countries. We understand the complexity of international tax laws, foreign regulations and unfamiliar corporate culture can be overwhelming. It’s easy to underestimate the length of time it takes to get things done overseas and the expenses related to setting up the corporate structure.

However, there are many reasons to expand overseas both organically or through a strategic acquisition. Many times, an acquisition can be a quick method of gaining market share and utilize existing infrastructure to accelerate growth. There are however political and economic risks associated with every country. Developing countries, in particular, have an inherent high level of risk associated with day to day business and long term planning.

You need to be flexible and ready to tackle unforeseen setbacks when dealing with new cultures, laws and markets. We recommend finding an M&A firm that has done work in the target country and understands your company’s culture and industry. A good advisor can help streamline a target acquisition search, help manage the acquisition process and provide post-acquisition integration support.

One of the biggest differences between domestic and international M&A is the level of importance culture plays into the acquisition. The US has regional cultural differences but not on the scale of doing business in China or Brazil. It’s important to know the important holidays and celebrations of the country as well as general corporate culture.  Not understanding how business is conducted socially or corporate etiquette can be both embarrassing and costly.

The extra effort put forth in understanding a foreign countries corporate culture and traditions will pay dividends after the acquisition. Envol Capital aims to provide support on all aspects of the acquisition and ensure you have long-term success post-acquisition!

Deepak Kumar