French companies have nothing to envy their international competitors and can just as easily participate in international mergers and acquisitions. But for their operations to be successful, they must invest in the target country, develop a medium-long-term strategy, not go it alone, involve management and know the level of maturity in topics such as corporate social responsibility, and digital.
France is a very popular hunting ground for foreign investors. When it is not investment funds that enter the capital of high-potential French start-ups, it is corporations that buy our nuggets. We often welcome…
However, the debates opened last spring during an attempted takeover by an American group of industrialist Segault, a supplier to the French nuclear industry. A month ago, Courier was acquired by British company JD Sports. And in June, it was Novo Nordisk that positioned itself to take over Puydômoise’s biotech company Biocorp.
However, like the Vestiaire Collective that bought one of its American competitors Tradesy, French companies can also be ambitious and acquire foreign companies in order to spread their strategy and ensure their growth. France has the ability to respond to the plundering of its industrial and technological nuggets!
However, on one condition: they must not forget to respect several fundamentals if they want to achieve success in their acquisition(s) and that this(s) serve(s) the success of the company. They will benefit from being vigilant and rigorous on Five Points.
Drivers of local culture and strategy
The first basics of applying is to spend some time in the country where the acquisition target company is located. It is essential to identify the right contacts, learn about them, understand the “local” customs and habits, and integrate into the economic culture that drives the company. Not forgetting the fact of living at the same pace and in the same time zone, sharing the macroeconomic and social concerns of the country and frustrating the subtleties of local language and expressions.
The second notion in M&A is to develop a 3- or 5-year strategic plan including this acquisition, with a truly global vision and a goal to accelerate growth. Having a company just for the fun of it and saying that you have had this type of operation in such and such a country does not work. It is essential to define acquisition stakes and consider how they can feed and enrich the value proposition of the market.
Wrong going it alone
The third key to success: get support. Be careful on this point not to confuse investment with costs… Viewing a subsidy only in terms of the cost it causes would seriously hurt the ultimate return on investment. It is essential that you are supported by legal and financial M&A experts, as well as by operating partners who have already carried out similar operations. This makes it possible to avoid a large number of pitfalls that are still often observed when making acquisitions.
The fourth lever of acquisition bears fruit: to involve its management in the acquisition process. Since the business manager has to focus a very large part of his time and energy on the project by spending time in the target country, it is imperative that he do the migration in France and rely on his management team to manage and control the operations. The manager’s mistake may be the desire to manage everything himself. In fact, it is impossible to do it well and one country will end up suffering.
It is also necessary to involve the management of the acquiring company. It is necessary to anticipate and build an integration plan to get the acquiring company’s teams to join it and involve them in its project. In addition, these employees contributed greatly to the success of the takeover project outside of France, if only because they had knowledge of the country, customers, local rules and customs. One way is to create a steering committee within the company to be acquired.
CSR or not CSR?
Fifth and final point: Predict the CSR and digital maturity of the country in which the target company is located. Adopting a global strategy does not mean doing everything the same everywhere in the world. Consider local characteristics and adapt – in the way you attack the market commercially, think about marketing, communicate with business partners and prospects, etc. – necessary. For example, observance of CSR requirements is highly developed in Europe, but this is not the case everywhere in the world.
At a time when interest in French companies does not stop and the global economic balance is disturbed due to the context of the permanent crisis and geopolitical games, our leaders have a card to play. Being more compelling and daring to make acquisitions outside France’s borders will ensure, in the medium term, the leadership of our champions in their own industries and preserve France’s position in the global economy.