Global M&A trends and cybersecurity

By Team Brand Solutions

  • 04 Dec 2017

The current business scenario in the global market is conducive for Mergers and Acquisitions (M&A) despite the ‘not-so-upbeat’ growth predictions. Businesses are undergoing makeovers and a number of companies are looking to acquire other companies. At the same time, companies are also planning to merge with other firms.

M&A Predictions
Recent data suggests that by the end of the financial year 2017, M&A deals in the worldwide scenario will see a jump of 5 percent in comparison to the year 2016 and for the first time, the worldwide deals might exceed the number 50,000. It is also suggested that it is the Real Estate, Healthcare and the Consumer & Retail sectors that will contribute towards this jump.

The different regions in the world will contribute towards the growth in the M&A deals, and reports suggest that predictably:

The Asia Pacific region will witness a year-on-year (YoY) growth of 11 percent, with the Healthcare, Real Estate and the Materials sectors of India, Southeast Asia and Australia making the major contribution.

Europe, the Middle East & Africa will have a 1 percent lower YoY growth, and the range will be between -3 and 1 percent.

Latin America will observe an approximate growth of 7 percent with Healthcare, Technology, Media & Telecom of Argentina, Mexico and Brazil making their contribution to facilitate the growth.

North America will witness about 10 percent growth from the Materials, Healthcare, and Consumer & Retail sectors.

Role of Cybersecurity in M&A
Of late, cybersecurity has become a very important topic in the M&A circles and companies attach a lot of importance to the same. This is because, in the present times, deals and negotiations do not take place behind closed doors. E-mails and e-documents have replaced letters and closed-door meetings to a large extent and virtual data rooms have also arrived on the scene. This has made the M&A process far easier, faster and convenient, but a few risks have also arisen. The confidentiality of corporate communication is at greater risk than ever before as in the present age of the internet, word travels at supersonic speed and hence, it can affect the M&A process adversely.

How Cybersecurity Affects M&A
If cybersecurity is compromised and the breach is revealed at any stage during the M&A process then it can lead to:

Cancellation of the deal as the leakage of confidential information is seen as a blot on the reputation of the company that is to be acquired and brings down its prospects.

Delay of merger/acquisition, which is harmful to the interest of both the parties.

Decrease in the deal valuation as leaks can bring down the valuation of the company being acquired.

Therefore, it makes sense for corporates to take cybersecurity seriously and do everything in their capacity to ensure data privacy. Along with experts, competent and reliable virtual data room service providers should be brought in to make the M&A hassle free and secure, so that nothing is jeopardized.

Read and download the complete report on Global M&A Trends and Cybersecurity here.

Brand Solutions is a marketing initiative for sponsored posts. No VCCircle journalist was involved in the creation of this content.