The acquisition of a company in Spain or France can serve various strategic objectives, from expanding geographical presence or diversifying business activities to acquiring a competitor or integrating a strategic supplier. However, undertaking this type of transaction in another country requires an understanding of the market, the identification of suitable opportunities and anticipation of the key aspects of the process.
For French corporate groups planning to expand into Spain and Spanish companies looking to establish a presence in France, several factors should be considered from the earliest stages of an M&A transaction.
The ideal target company is not always for sale
An acquisition transaction does not necessarily have to begin by searching for companies that have publicly expressed their intention to sell. Many opportunities can be found among companies that are not officially on the market.
Conducting a structured search and defining investment criteria in advance makes it possible to identify potential target companies and approach them confidentially. This approach can broaden the range of available opportunities and reduce competition from other potential buyers.
Understanding the market before starting an acquisition
Before undertaking a transaction, it is essential to understand the characteristics of the sector, its competitive dynamics and the key players in the local market.
Market analysis and mapping help identify the companies that best align with the project's strategic objectives, establish more precise acquisition criteria and optimise the resources allocated to the search.
The importance of local market characteristics
Cross-border M&A transactions depend on more than just financial considerations. Personal relationships, cultural differences and business practices in each market can also influence how a transaction develops.
A business model that works in France, for example, may not be directly replicable in Spain. Having local knowledge and a local presence can facilitate initial contact with target companies, negotiations and communication with their management teams.
Anticipating the financing of the transaction
Acquisition financing is another key aspect that should be considered from the earliest stages of the project.
Acquisition debt, growth financing, refinancing or a combination of different sources of capital are some of the alternatives that can form part of the financing structure. Analysing these options in advance helps assess the project's feasibility and subsequently streamline the execution of the transaction.
A defined strategy before initiating contact
Before approaching and entering into direct negotiations with potential target companies, it is important to have a clear acquisition strategy.
Market practices can vary from one country to another, and the financial information provided is not always clear. It is therefore essential to identify risks accurately and define the acquisition strategy together with the right advisers before moving forward with the process.
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