Guide to navigating cross-border mergers and acquisitions (M&As) for UK businesses

Cross-border mergers and acquisitions (M&As) are hugely profitable for UK businesses with more than 103,070 mergers and acquisitions transactions announced since 1985 with a known value of almost 5,688 billion pounds¹.

These transactions are often complex, involving multiple people across multiple countries. The key to international M&As is the ability to make international transfers across multiple currencies efficiently and cost effectively.

In this article, we’ll look at how to navigate cross-border mergers and acquisitions as a UK business and how Wise Business can solve the issues with traditional banking methods such as high fees, unfavourable exchange rates and slow transfer rates.

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What are cross-border mergers and acquisitions (M&A)

At their most basic level, cross-border mergers and acquisitions are business deals where companies expand into another country, either by joining with the foreign company or taking them over. To ensure that we’re all on the same page, let’s look at some definitions:

• A merger (also known as a multinational merger) is when two or more companies from different countries agree to join together to create a new company.
• An acquisition (also known as a foreign takeover) is when a company from one country purchases and takes control of a company in another country.

There are a number of different types of cross-border mergers and acquisitions which we’ll explore below. This article will be purely focused on international M&As rather than on non-international or standard M&As.

• Horizontal mergers and acquisitions: involves two companies in the same industry and same production stage merging or acquiring each other. The intention behind this is to increase their market share, expand globally and be able to compete against other companies more easily. An example of this is InBev, a Belgian beer company, acquiring the American company Anheuser-Busch to consolidate their beer portfolio to include over 500 beer brands².
• Vertical mergers and acquisitions: when companies in different countries and in different parts of the production chain merge or acquire each other. The aim of this kind of cross-border deal is to streamline operations, secure their supply chain, and make their processes more efficient. An example of this type of international M&A is when Apple acquired Dialog Semiconductor, a German company, in 2018 in order to bring more of their chip design in house³.
• Conglomerate mergers and acquisitions: This type of global acquisition happens when two international companies in completely unrelated industries merge or acquire each other with the aim of diversifying or entering new markets. This happened in 2017 when Johnson & Johnson acquired Actelion, a Swedish biopharmacy company⁴. This allowed them to increase their revenue streams and access to new, innovative treatments.
• Market extension mergers and acquisitions This is when companies in the same industry, but different geographical markets combine with the aim of expanding into new countries. An example of this kind of multinational merger or acquisition would be when Kraft Food, a US company, acquired Cadbury in 2010⁵, diversifying their markets and increasing their product range with iconic brands.
• Product extension mergers and acquisitions: This is the final type of international M&A and is when companies with related but not identical products merge or acquire each other. The aim of this type of agreement is to expand a company’s product range and cross-sell in new markets.

Why do companies pursue international M&As?

Now that we know the different types of international M&As and the difference between mergers and acquisitions, we can explore why companies see this as an attractive option when growing their business. In 2025, global M&As hit a $2.6 trillion peak year-to-date, a 28% increase from the year before⁶, as companies search for growth opportunities.

Market expansion and global reach

If you’re looking to expand your business outside of your established geographical market, there’s a lot to consider: different languages, different cultures, different expectations, and different marketing strategies. Cross-border mergers and acquisitions are a way to avoid starting from square one in a new market. By acquiring or merging with an existing company, already present in that market, you can speed up the process and set yourself up for success with local knowledge on your team. This is what Walmart did when they acquired Flipkart⁷, giving them instant access to India’s growing market.

Access to more resources

Cross-border deals, in whatever form they take, can also give you access to more resources, whether that’s access to proprietary technology another company invented, a specialised work force or raw materials. This allows companies to streamline their processes, secure their supply chain, and work more efficiently.

Diversification

Multinational mergers can give a business more stability by allowing them to diversify their income stream, thus reducing risk. This can be true for two reasons. The first reason is that it expands the geographical markets that a company is in, mitigating the potential effects of an economic downturn in one country. The second is that by expanding into new products or services brings more income streams, rather than relying on a single product.

Competitive advantage

By merging with another international company, both companies can increase their share of the market. In addition, if the two companies were in the same industry, this creates one bigger, more powerful company rather than being in direct competition.

Economies of scale

By pooling together their resources through international M&As both companies can reduce their costs by streamlining their processes and sharing research and development costs. This sharing of expertise and staff can lead to a lower cost per unit and higher profit margins.

Challenges in expanding across borders

While there are several advantages to cross-border mergers and acquisitions, these sorts of deals are not without their challenges. Creating multinational mergers require strategic, financial, cultural, and legal expertise. Let’s explore some of the most common challenges during global acquisitions.

Regulatory challenges

The nature of cross-border deals means that you are navigating two different legal systems. This means two different, potentially conflicting, stances on foreign investment laws, antitrust laws, labour laws, and tax policies. These agreements may also need to be approved by government bodies, delaying or preventing international M&As. For instance, the proposed merger between Sainsbury’s and Asda was blocked by the UK’s Competition and Markets Authority as it was likely to increase prices for customers⁸.

Cultural challenges

The bringing together of two different countries also means bringing two different cultures together. This can create challenges when it comes to management, working styles, and language, especially as what works in one country may not translate to another. A lack of cultural due diligence can lead to less productivity, reputational damage, and a lower return on investment⁹, the opposite of the intended deal.

Financial challenges

As you work on foreign takeovers, currency fluctuations can become a stumbling block. If exchange rates change between the beginning of negotiations and closing, the fundamental value of the deal can change. In addition, any economic instability in a country can also affect the value of the new company.

Political challenges

Finally, wider national and international factors can have an impact on global acquisitions. The geopolitical risks associated with any deal can increase if there is a change of government, government instability, or sanctions imposed. Most recently, President Trump’s extensive tariffs led to a 20-year low in international M&As¹⁰.

The cross-border M&A process

In addition to the typical steps followed in a domestic merger or acquisition, cross-border mergers and acquisitions require additional checks. Let’s take a look at them in more detail.

Due diligence across borders

As with any deal, the purpose of due diligence is to ensure that everything is as it appears and to avoid any nasty surprises. While all deals require a level of investigation into the financials, legal and tax obligations, intellectual property, and potential risks, global acquisitions need a bit more information. Both sides will need to carry out cultural and HR due diligence to ensure that the transition is smooth for staff, management, and policies. The merging of two different companies can also lead to different accounting systems and disclosure laws so it’s important that these are reconciled.

Structuring the deal

In any deal, you need to decide on the valuation method and payment structure. When it comes to international M&As, you also need to consider the tax implications, exchange rates, and regulatory frameworks. For instance, a well-structured deal can help you minimise the risk of double taxation or take advantage of favourable treaties.

Regulatory approval

Depending on which countries the two companies are based in, both governments will need to approve the deal. There are a couple of different bodies which will need to approve the M&A:

• Both countries’ competition authorities will need to check for anti-trust concerns.
• Sector-specific bodies may be required to review the deal.
• Foreign investment laws may impose additional conditions.

Post-merger integration strategies (PMI)

The post-merger integration strategies are often where any deal succeeds or fails, but this is even truer in international deals. In fact, 70 to 90% of acquisitions fail with integration between the two parties being a key reason¹¹. It’s important to take time to align cultures, management structures, IT systems, and operations so that the transition is smooth and enables every team member to be productive. This alignment can also help you retain talented staff members and ensure smooth communication between all parties.

Manage cross-border transactions with Wise Business

A Wise Business account gives you the ability to reduce the potential for international M&As to go array for a number of reasons. Firstly, the transparent and low-cost international transfer fees are crucial when moving large sums of money across borders for deal payments, due diligence expenses, and post-merger integration costs. The use of real-market exchange rates also removes hidden markups on currency conversion giving you and your customers better value for money.

Wise Business accounts are inherently multi-currency accounts, allowing you to hold 8+

(only with Wise Business Advanced)

, simplifying financial transactions across different countries. In addition, Wise may offer faster payments than many traditional banks, a vital feature in time-sensitive deals.

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Multinational mergers FAQs

What is the main purpose of a merger and acquisition?

The goal of a merger and acquisition is to bring two companies together so that they operate as a single entity, either by a foreign takeover or a multinational merger. This allows the company to expand into new markets or new products.

What are examples of successful cross border mergers?

There are several examples of successful cross-border mergers and acquisitions, such as Anheuser-Busch (USA) and InBev (Belgium)¹², leading to a portfolio of over 500 beers, Geely (China) and Volvo Cars (Sweden)¹³, giving Volvo access to the Chinese market without comprising on their safety and reliability, and Mittal Steel (India/Netherlands) + Arcelor (Luxembourg)¹⁴, creating the world’s largest steel producer.

*Disclaimer: The UK Wise Business pricing structure is changing with effect from 26/11/2025 date. Receiving money, direct debits and getting paid features are not available with the Essential Plan which you can open for free. Pay a one-time set up fee of £50 to unlock Advanced features including account details to receive payments in 22+ currencies or 8+ currencies for non-swift payments. You’ll also get access to our invoice generating tool, payment links, QuickPay QR codes and the ability to set up direct debits all within one account. Please check our website for the latest pricing information.

Sources used:

Sources last checked on 07-Oct 2025