What Do Foreign Buyers Really Want?

LET'S LOOK AT THE FOREIGN BUYER'S ACQUISITION CRITERIA

What kind of manufacturing companies appeal to foreign buyers… and why? Foreign corporate acquirers are actively trying to advance strategic goals. The companies they purchase are apt to be smaller, lesser-known, closely-held firms. Such purchases are driven in an effort to:

1. Round-out a global market position

2. Add a domestic U.S. plant

3. Provide access to new technology

4. Add a strong brand name.

Generally speaking, because of these motivations, when foreign buyers find what they want they are willing to pay a premium price. Many have paid what American counterparts would regard as too much. It should be kept in mind, though, that important as foreign acquisitions have been, they still accounted for less than 20% of all U.S. deals. All indications are that foreign buyers take the long-view. They will occasionally pay higher prices in the U.S. because they assess the value of takeover targets differently than American buyers do. Foreign buyers look at what a company can do for them in the long run and how it augments the marketing plans they've already made.