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Human Resources (HR) leaders need to be well-versed in broad array of regulations, cultures and practices of overseas regions, given the emphasis on cross-border merger and acquisition (M&A) activity.
Nowadays, cross-border M&A activity comprises a significant portion of global activity and, more often than not, multiple countries are involved. So, there could be impact on the workforce, says a report by Mercer, a consulting firm in talent, health, retirement, and investments.
According to Thomson Reuters, overall deal activity in 2012 totaled $2.6 trillion, with cross-border deals representing more than one third (36%) of this total.
“When M&A deals cross borders, a foundational understanding of key people issues in a given country is critical to any M&A planning or decision-making process,” said Gareth Williams, Mercer Partner and Global M&A Engagement Manager in Mercer’s M&A consulting business.
“What we often see is that the degree of complexity related to unique benefit plans, social programs, employment rules, and cultural considerations requires expertise not available within most business organizations,” he said.
This complexity can be particularly acute when Asian-based organisations acquire assets outside their markets, especially in Europe.
“Acquisitions in Europe pose unique people-related problems, however, which may not always be apparent to the Asian acquirer,” says Adam Rosenberg, Mercer Partner and UK M&A Leader.
HR leaders can help their deal teams achieve greater value and accelerated results by effectively and aggressively managing the people risks and opportunities which are critical to deal success, the Mercer report said.
