CROSS-BORDER M&A IN EMERGING MARKETS: STRATEGIC DRIVERS, RISK TRADE-OFFS AND REGULATORY CHALLENGES
AUTHOR – SWASTHIK BS GOWDA, STUDENT AT CHRIST ACADEMY INSTITUTE OF LAW
BEST CITATION – SWASTHIK BS GOWDA, CROSS-BORDER M&A IN EMERGING MARKETS: STRATEGIC DRIVERS, RISK TRADE-OFFS AND REGULATORY CHALLENGES, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (14) OF 2025, PG. 680-690, APIS – 3920 – 0001 & ISSN – 2583-2344.
ABSTRACT
What propels multinational corporations to undertake cross-border M&A in emerging markets despite the enormous difficulties that lie ahead? The paper investigates how the strong forces of access to fast-growing consumer markets, strategic asset acquisition, cost arbitrage, and technological potential shape the cross-border merger and acquisition (M&A) in the emerging markets, and how the springboard hopes of rising-market multinationals in their effort to compete with multinational corporations influence the cross-border mergers and acquisitions. Nevertheless, these prospects are offset by a range of threats, some of which are political instability, regulatory uncertainty, exchange rate changes, poor governance, and cultural incompatibility. The changing regulatory environment in the emerging markets, including foreign-investment controls, antitrust investigations, tax ambiguities, and the regulation of the digital economy are also described as the factors that further make deal-making difficult, and are emphasized in the analysis. To mitigate these risks, the paper suggests mitigation measures, which include due diligence, hiring of local advisors, hedging, structured deal instruments and preemptive regulatory negotiation. Host government policy recommendations are aimed at improving legal transparency, improving governance systems and creating investor friendly arbitration. By presenting this multi-dimensional analysis, the paper provides valuable lessons to multinational companies, target companies in the emerging-market, and policymakers who should strike a fine balance bet amidst the opportunity and uncertainty that comes with cross-border M&A.
Keywords: Cross-border M&A, Emerging Markets, Regulatory risk, Potential Risk, Due diligence, springboard theory