Capital Markets | Q&A
Tim Gee is a partner in the London office and global head of mergers and acquisitions at Baker & McKenzie.
Global Finance: What is the main reason for the recent surge in cross-border M&A?
Tim Gee: The principal reason is greater confidence in the boardroom that investors will support an equity story. Market sentiment has improved, although the recent volatility has not been helpful. Deals are based on long-term considerations, and people feel more able to implement business strategies. Globalization is driving strategy. Companies want to move into new markets and jurisdictions where growth is greater. The development of emerging markets is stimulating business. For many industries, these markets are the place where they want to expand.
GF: Will the US crackdown on tax inversions slow the growth of cross-border deals?
Gee: In the pharmaceutical sector, inversions unlocked some strategic moves that might otherwise have been out of reach. But tax considerations are not going to put a lid on cross-border M&A, which remains a highly effective tool for implementing strategy. Energy and healthcare deals are proceeding. Many companies plan cross-border transactions in the next few years.
GF: Is it getting harder for cross-border deals to win antitrust approvals?
Gee: There are now more than 120 merger-control laws around the world. Compliance demands are a material factor now. For every deal, there is a range of places where you have to file, as more countries are enforcing an industrial policy. The timing of approvals can have an impact on getting deals done.
