Consumer product transactions in emerging markets
Six steps for transaction success in emerging markets
"The economic outlook for the foreseeable future is for sluggish expansion in the mature markets of the Western developed economies, with emerging market economies providing the best opportunities for growth."David Murray, Global consumer products transaction leader, Ernst & Young
The aftermath of the global financial crisis has brought into sharper focus the long-term shift in economic power toward the developing world. Consumer products companies are embracing this broad economic trend to reach the next one billion customers in emerging markets.
However, it will not be possible to achieve this objective through organic growth alone. Emerging market M&A is very much on the consumer products corporate agenda.
Turning ambition into reality in emerging markets, however, is not always straightforward.
Successfully concluding a transaction requires overcoming a greater number of obstacles than in the developed world—from a basic lack of information to the need to accommodate wide cultural differences.
Drawing on our experience gained on the ground, this report analyzes the six steps to achieving successful transactions in emerging markets. They include:
- Tailor strategy to market
- Think laterally about partner and target selection
- Develop a strategy to overcome a lack of reliable information
- Understand a different pricing paradigm
- Expand timeframe for negotiations with multiple shareholders
- Optimize the integration process
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Contents
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