Cross-border transactions in emerging markets - Ernst & Young - Estonia

Transactions pose considerable challenges in both concept and execution. And, the strategic importance is not always matched by successful results. What can corporate development executives do to make deals more successful?

Key success factors are identifiable at each stage of the transaction lifecycle:

• Strategic analysis: clarity of purpose drives success
  Results often disappoint because teams fail to align strategies with tactics.
• Opportunity analysis: know the deals, build relationships with all stakeholders
  Local knowledge is essential to managing key business challenges.
• Transaction development: what you don’t know will come back to hurt you
  Insufficient information in due diligence process requires often additional due diligence procedures.
• Negotiation and execution: the 'best' deal is the most workable deal
  Successful investors are sensitive to cultural difference; however, they are unfamiliar with it.
• Transaction effectiveness: getting it right at the end means getting it right at the start
  Without a dedicated integration team, business plan synergies will likely not be achieved.

Progressive deal teams practice what we call "the five A's" of doing successful deals: Alignment of purpose, Alliances, Awareness, Adaptability, and Application of lessons learned. Together, the five A's increase the chances of success for a given deal.

Emerging markets

Transaction professionals tell us that deals in emerging markets are at the forefront of their corporations' agenda.

Our "Global transaction leaders study 2007", the third in a series on the evolving role of the CDO, analyzes the responses of 300 transaction leaders — across several functions of the corporate deal team — from 95 companies in 15 countries. Their perspectives and experience have enabled us to identify some key principles and practices to apply when doing business in emerging markets.