PROBLEMS OF MERGERS AND ACQUISITIONS IN INTERNATIONAL BUSINESS

Abstract

International mergers and acquisitions are strategic mechanisms through which corporations pursue expansion, technological advancement, and competitive repositioning in today’s global markets. Recent developments, spanning the period 2024-2025, have fundamentally changed the operational landscape for cross-border consolidation activities. The frameworks governing corporate combinations have undergone significant strengthening in many jurisdictions, with competition authorities in developed economies implementing increasingly stringent assessment protocols. They are lengthening transaction timelines and increasing approval uncertainty for acquiring entities seeking to conclude transformative deals. At the same time, geopolitical fragmentation stemming from trade disputes, protectionist policy shifts, and bilateral tensions between major economic powers are introducing additional layers of complexity into cross-border investment decisions. New realities are forcing strategic acquirers to recalibrate their geographic targeting approaches and risk assessment methodologies when evaluating international acquisition opportunities. Empirical data extracted from global transaction databases reveals that the total value of deals is expected to reach US$3.4 trillion in 2024, representing an 8% year-on-year increase, although approximately 40% of announced combinations failed to close within the originally forecast timeframes. Regulatory scrutiny has intensified in markets across North America, Europe and Asia-Pacific. The average approval time for large-scale transactions exceeding US$2 billion has extended to 191 days over the entire observation period. This represents an 11%-time extension over the historical benchmarks established in 2018-2022. Financial market conditions, characterized by high interest rates and compressed valuation multiples, have fundamentally changed buyer behavior patterns. Corporate acquirers are demonstrating increased selectivity in terms of target selection criteria, while simultaneously seeking revenue-based synergies, cost reduction opportunities, and prioritizing single value creation paths. Private equity sponsors maintaining significant capital reserves are facing challenges related to aging portfolios as exit activity remains limited. As a result, average holding periods are extending to approximately 6 years compared to the historical norm of 4.1 years observed during pre-crisis periods.