Strengthened Balance Sheets and Surplus Cash Drives M&A Activity Globally

Taxand, a global organisation of tax advisors to multinational businesses, confirms that, despite a cautious mood, cross-border merger and acquisition (M&A) activity is picking up.

The global economic crisis set off a tidal wave of austerity measures. Businesses held back on investment fearing further deteriorations in the macroeconomic environment. However, corporates with stronger balance sheets and surplus cash continue to spur activity.

Taxand’s Global Guide to M&A Tax covers 35 Taxand countries and highlights key strategies for multinationals to consider when undertaking any M&A activity worldwide. The guide also provides an update on legislative change affecting M&A activity, including tighter tax rules surrounding the carry forward of tax losses and stronger regulations limiting the tax deduction of interest and reviews the impact differing local regulations have on deals.

The guide provides multinationals with insight needed to identify opportunities and answers dealmakers’ questions to consider when undertaking any M&A activity worldwide.

Ian Fleming, Taxand’s global transaction tax leader, said: “Multinationals with surplus cash resources are now looking at M&A activity to consolidate their market position providing long-term value to shareholders. In particular, activity in emerging markets is increasing. While the long-term commercial and strategic benefits may be clear, unfamiliar and changing tax rules in these regions produce short term risks. These need proper assessment to ensure full value is derived from the transaction.”


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