M & A drivers – the European view
PROFIT ESG IN M & A
M & A drivers – the European view
According to Sven Kleindienst , Partner of the Restructuring , Performance , Transformation & Transaction team at Roland Berger , add-on acquisitions for geographical or product expansion , digitalisation and cycle resilience are seen as the most important factors for M & A . But ESG is expected to become just as important for M & A in the coming five years , as ESG will be one of the key market drivers next to digitalization , he says .
“ The European market is a clear frontrunner with regards to this ! Currently , M & A activity in Europe is centered around companies from the segments of technology , pharma & healthcare , and business services & logistics , especially due to the strong growth outlooks as well as their expected resilience to economic or political crisis ."
SVEN KLEINDIENST PARTNER , RESTRUCTURING , PERFORMANCE , TRANSFORMATION & TRANSACTION TEAM , ROLAND BERGER
“ Having a superior sustainable offering and fulfilling further ESG criteria is increasingly valued by the acquiring strategic or financial investors .”
The APAC picture includes a “ wide range of attitudes ” according to Will Symons , Climate & Sustainability Leader , Deloitte Asia Pacific , who says the ‘ E ’ in ESG can be a risk exercise to appease global investors and pension funds .
“ This is partly rooted in the context that APAC differs from the EU and US in that ESG has not been driven by extensive country regulation ,” says Symons . “ Instead , there is a growing appreciation across APAC that ESG risk can materially impact business value , serve as a source of value creation and provide access to international markets and competitive green capital within and outside APAC .”
ESG should be embedded into core business Understanding the value creation opportunities that exist in relation to ESG across different sectors is also driving the integration of ESG into M & A decisionmaking . ESG is increasingly being used as a lens to identify new sources of growth and competitive differentiation , with M & A being an accelerator for delivering on such strategic priorities .
And this is surely the crux of the matter . Investors ( and consumers ) are increasingly savvy when it comes to ESG or potential greenwashing , and demand the highest standards . So how can companies ensure they position themselves correctly during M & A ?
“ The businesses that succeed with ESG in their M & A cut through the hype and focus on strategic alignment , due diligence , execution , and value creation ,” says Symons .
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