Cross-border M&A accounted for 32% of global deal volume in 2024, marking a 5.9% increase from the previous year, according to Harvard Law School data.
That momentum has extended into 2025, even as market conditions have become more dynamic than expected, reflecting in how deals are being structured and closed.
One of the drivers of cross-border M&A is geographic expansion. Companies looking to grow internationally often acquire local businesses to gain immediate market access, face local regulatory environments more effectively, and accelerate go-to-market capabilities.
To manage the geopolitical complexity, dealmakers are revising terms and leaning on creative structures like deferred payments, valuation protections, and flexible financing, according to Reuters.
For founders exploring a sale in this environment, we outline what to expect in an international acquisition and how to approach it in 2025.
Why global buyers are targeting tech and SaaS firms
Non-tech companies acquiring tech firms represented 12% of all M&A volume in 2024, up from a historical average of 7% (Goldman Sachs). The rationale: access to scalable platforms, proprietary data, and recurring revenue.
Overall, flows between the U.S. and Europe are gaining traction.
“After a more subdued period of activity, cross-regional M&A is starting to rebound. Within a broader uptick of EMEA activity, flows between the United States and Europe have seen the strongest momentum, accounting for 44% of the volumes shown”, reported Goldman Sachs in their “2025 M&A Outlook: Building Momentum on a Global Stage”.
Private equity is also a significant force in cross-border M&A. As McKinsey reports, 40% of PE deal value in 2024 came from add-ons, favoring sellers that complement existing platforms rather than standalone operations. This positions mid-market SaaS and tech-enabled businesses as attractive acquisition targets.
What to expect from foreign acquirers
In cross-border deals, the most common point of friction isn’t price, it’s expectation. From communication styles to diligence pacing, buyer behavior varies significantly by region. For founders, this variability can lead to misalignment, stalled conversations, or, worse, deals that quietly lose momentum.
At L40°, we work with sellers across Europe, North America, and Latin America. Whether it's a Barcelona-based founder selling to a U.S. platform or a Canadian SaaS firm attracting interest from German strategics, we see firsthand how cultural fluency and process translation become essential execution skills.
Here is what to expect in international acquisitions.
Communication styles and pacing vary widely
In a recent cross-border deal, L40° advised a Southern European seller working with a UK-based buyer. While strategy and pricing were important, strong communication played a critical role, especially across differences in tone and language. With careful attention on both sides, the teams addressed these nuances effectively and kept the deal on track.
Similar contrasts appear elsewhere:
- North American buyers tend to push for speed and clarity, but may misread formality in written responses as resistance.
- German or Nordic acquirers typically prefer structured processes and advance documentation before entering term sheet discussions.
- Latin America and Southern Europe buyers, particularly family-backed or hybrid strategics, may prioritize long-term alignment and potentially even personal relationships over immediate growth metrics, requiring a different narrative arc.
Structured offers are the norm, not the exception
Cross-border buyers, particularly when dealing with unfamiliar jurisdictions, frequently use structured deal terms to manage perceived risk. These can include:
- Earnouts tied to post-close performance in local markets
- Escrow mechanisms to address governance or compliance concerns
- Staged control, where operational leadership transitions over time
These structures aren’t about distrust; they’re standard tools for managing risk in complex, cross-border deals. Sellers should be prepared for them, especially when valuation differences stem from accounting, regulation, or currency exposure.
Add-ons dominate private equity behavior
Add-on acquisitions have overtaken platform plays for private equity buyers, especially in 2024’s climate. According to McKinsey, 40% of global PE deal value came from add-ons, a signal that international buyers are more likely to acquire firms that complement existing portfolio companies than launch into entirely new sectors or markets.
This trend favors sellers who:
- Fit neatly into existing product or customer ecosystems
- Bring specialized capabilities that enhance scalability
- Are culturally and operationally ready to integrate
Where founders face risk and how to stay ahead
Cross-border deals open new growth pathways, but they also introduce risks that domestic processes rarely encounter.
Regulatory exposure
In international acquisitions, regulatory review is a frequent source of friction. Authorities may evaluate national security, antitrust, foreign ownership, or anti-corruption concerns, often introducing timelines and outcomes that are outside the parties’ control.
For example, L40° has advised on transactions where closing was delayed due to national competition authority reviews. In such cases, proactively managing the regulatory timeline and, when necessary, adjusting key deadlines, is essential to preserving deal momentum and ensuring a successful outcome.
Similar exposures exist elsewhere:
- In the U.S., Committee on Foreign Investment in the United States (CFIUS) reviews can apply when foreign acquirers are involved, especially in tech, data, or defense-related sectors.
- Buyers may also be subject to the Foreign Corrupt Practices Act (FCPA), export controls, or local foreign investment restrictions across Latin America, Canada, and Asia.
Recommended: Key Tech M&A Deals of 2024–2025
Financial and tax friction
International M&A deals also present operational complexity tied to financial structures. FX volatility can shift headline value between signing and close.
Working capital definitions differ by jurisdiction and may create disagreement on post-close adjustments. Additionally, local tax regimes can affect proceeds, repatriation strategies, or deal structuring, particularly where withholding taxes, deferred liabilities, or transfer pricing rules apply.
Without early coordination across tax, finance, and legal advisors, these issues can reduce value or delay closing.
Integration risk
Even when deals close smoothly, integration can falter across borders. Common post-close challenges include:
- Misaligned reporting systems or ERP (Enterprise Resource Planning) infrastructure
- Differences in organizational structure or decision-making
- Cultural disconnects that affect team dynamics or leadership transitions
How to prepare for a global sale
Preparing for the operational and legal scrutiny when selling your company is more than a best practice. It is practically a competitive process.
At L40°, we follow a consistent, diligence-first approach to global sales. This means anticipating cross-border buyer expectations from day one, sequencing documentation accordingly, and addressing friction points before they slow the process.
Prepare for multi-jurisdictional diligence
International buyers will expect a high degree of visibility across core business functions, especially if they are unfamiliar with the seller’s home market. That includes financials, but also areas that vary significantly by jurisdiction, such as:
- Intellectual property ownership and licensing agreements
- Employee contracts, equity plans, and local labor law compliance
- Tax filings, transfer pricing arrangements, and deferred liabilities
- Data privacy and security policies in line with General Data Protection Regulation (GDPR), Health Insurance Portability and Accountability Act (HIPAA), or equivalent frameworks
In a cross-border sale, the burden of proof is higher. Founders must be ready to demonstrate clean ownership, contractual clarity, and compliance across every geography in which the company operates.
Build a deal-ready data room early
The data room is a secure digital environment where buyers access the company’s key legal, financial, and operational documents during diligence. It is a reflection of how prepared the seller is to engage with global buyers. A well-structured, access-controlled data room should mirror how international acquirers evaluate risk.
At L40°, we don’t wait for a buyer to request it; we prepare the data room to be deal-ready before launching the process, and we adapt it to reflect the expectations of international acquirers based on the targeted outreach strategy.
By addressing these elements proactively, founders reduce friction during diligence, shorten response timelines, and maintain more control during buyer engagement.
Learn more about our approach here: Sell Side M&A In-Depth Guide.
How L40° manages cross-border M&A
L40° brings deep experience leading sell-side processes across Europe and North American regions, where regulatory requirements, buyer behavior, and diligence standards often differ. We understand the nuances of each market and tailor every step of the process to align with local expectations while preserving global deal logic.
Our approach is built around strategic buyer sequencing, regulatory foresight, and disciplined execution. Whether the buyer is a European strategic or a North American PE platform, we manage the process to protect value, maintain control, and operate with discretion from start to close. Contact us to learn more.
