Video: Labour laws and other challenges in international M&As

Video transcript:

There are a lot of specific challenges to international mergers and acquisitions.

Firstly, you’re dealing with a different company’s accounting standards, so we’re not dealing with US GAAP; we’re typically dealing with IFRS or local statutory accounting. So we have to understand how to convert that into our country’s or your company’s accounting policies and procedures.

What also makes it challenging is there’s different labour laws in all the different countries for defined benefit plans and defined contributions, which you have to take into account – especially in EMEA, there are works councils.

So for instance, in the US, you can just say, “You’ve been a good employee, here’s your last month’s paycheck. Thank you very much.”

In Europe, there are a lot of advocates for employees. So you have to factor that into the timeline of the deal as well as the cost, because sometimes you cannot just decide, “Hey, these people aren’t the right cultural fit, or we … want to go a different direction.” We can’t do that in Europe, as well as, even the people that we are bringing on, we have to make sure that we’re compensating them at least of what they’re getting already.

That also makes it a challenge, as well as the cultural, the time zone differences, and all the softer sides. All those things bundled into one make it very, very challenging to do international deals.

That’s why, when we know that we’re doing international deals from my company’s perspective, we do more things face to face to try to build those long-lasting relationships and get off on the right foot.

Editor’s note: This transcript was edited for length and clarity.