People walking in city
Managing Employee and Culture Risks 
During Cross-Border M&A Transactions
06/08/2018
People walking in city

Realizing the value of any merger and acquisition (M&A) transaction is challenging, and many studies find companies fail to achieve their deal thesis and synergy goals due to employee and culture issues. Cross-border acquisitions add employee regulatory, policy, and cultural challenges.

Crowe global advisory team members have identified the most frequent human capital risks in executing cross-border transactions.

These risks have been categorized, by country, into the following categories:

Our report includes some country-specific situations that a cross-border acquirer might encounter and impacts that should be researched and considered.

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Benefits

Buyers might incur increased statutory and supplemental benefits costs due to social insurance and immigration costs due to renewing, transferring, or terminating work permits and visas.

Culture

Acquirers might witness friction caused by significant differences in employee values, attitudes, and behaviors by country and function when an integration strategy requires combined or new cultures.

Representation

New owners might have more interactions with workers councils, unions, and ombudsmen and be subject to mandatory collective bargaining.

Termination

Restructuring will need to consider statutory timing and process restrictions for terminating employees and severance cost.

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Peter Varley
Peter Varley
Partner, Head of Corporate Finance
London