Spotlight: Cross-Border Transactions in the Packaging Industry
Mazzone’s Packaging Deal Database tracked 70 cross-regional[1] transactions in 2023, which is on par with 2021 and 2022 at 18% of the overall sample. Including cross-border transactions within regions shows a much more active cross-border marketplace, totaling 142 transactions (40% of all Packaging Transactions in 2023).
Europe/Middle East/Africa (EMEA) targets saw the highest number of cross-border deals, split 60% within EMEA and 40% from outside the region. The most active non-EMEA acquirers were from Japan; within EMEA, Germany, France and Austria combined for 50% of cross-border deals.
51% of acquirers of Rest of World (ROW) targets were beyond national borders. Cross-regional deals were more common in ROW, with European buyers the most active.
On a proportional basis, North America targets saw the least amount of cross-border activity, with only 16% of acquirers outside of national borders. Non-North American acquirers were predominantly European.
As noted in our Winter Industry Insights, we see no premium or discount for cross-regional or cross- border transactions. Deal values are driven more by product segment, buyer type, deal motivation, and the pricing prevalent in target markets (regardless of buyer geography).
As the strategic value of a cross-border transaction is often significant to an acquirer, this raises the question of why no premium is ascribed to these transactions. We suggest that while the strategic value may warrant a premium, the additional risks in consummating such a transaction neutralizes that premium. Mazzone’s experience in cross-border transactions has revealed differences that must be carefully managed in these situations – not simply language and time zones, but differences in negotiation styles; legal, tax, and accounting standards; due diligence processes; regulatory approvals; and transaction timelines. All this needs to be carefully navigated to successfully close a cross-border deal.
Mazzone’s Cross Border Experience
In 2022 – 2023, approximately 30% of our transactions were cross-border, including select transactions featured below, with Mazzone advising clients from the US, Europe, the Middle East, and Asia, in the closing of transactions in the US, Mexico, and Europe.
[1] Our three tracked regions include (North America (NA), Europe/Middle East/Africa (EMEA), and Rest of World (ROW)