Executives at multinational companies consider investing in China, India and South East Asia almost as risky as investing in Africa, according to a survey commissioned by Marsh, Mercer and Kroll for their report M&A Beyond Borders: Opportunities and Risks.
Despite the perceived risks, China, India and South East Asia were identified as the most attractive destinations globally for M&A activity over the next 18 months, with 57% of deal makers surveyed describing potential interest as significant or very significant.
The issues identified as the most risky in the China, India and South East Asia region were questionable business practices, environment, intellectual property protection, and insufficient financial recourse.
For North America, the figure was 43%, Western Europe 41%, Eastern Europe 31%, Latin America 29%, Middle East 27%, Australia, Japan and Korea 25% and Africa 19%.
Litigation culture in North America is a significant caveat to the relatively lower M&A deal making risks in the region. Seen as particularly worrisome in the US, litigation risk has substantial implications for the current and future liabilities deal makers should consider when evaluating North American opportunities. North America was also seen as having a higher protectionist sentiment, similar to that of Western Europe.
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