Among the various points made in this story on uplift in M&A is an important comment on the increasing social responsibilities being placed on overseas acquirers.
Increasingly, regulators, governments and unions are looking for clarity and assurance on what impact the sale of a local business will have on the local community.
Often, the first synergy of a deal is for the buyer to close a targets head office or administration functions, or to consolidate their manufacturing sites. Next follows an evaluation of the supply chains and any duplicative employee functions.
Now however, regulators and governments are under pressure to make acquirers clarify their intentions upfront around continued employment and planned presence in the community.
Examples include governments agreeing to allow a deal to proceed from a regulatory perspective only when a buyer commits to maintaining a presence in the community for an agreed period of time.
Other examples include requiring an acquirer to public state their intentions prior to signing in the form of binding commitments. Sometimes unions or workers councils are given rights to protect workers if reductions occur within a certain period of time following a sale.
One should expect many governments around the world to begin passing laws in this area over the next few years. The original synergies identified in a classic takeover may now be more difficult to realise than in the 2000s.
This is why investors should hope for an uplift in M&A activity this year... Following populist political movements and the growing social unrest developing in countries; companies expanding overseas in 2017 will be held more accountable for their promised contribution to local economies, including job creation, fair employment and human rights.