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Evolution: Reigniting the Global Economy

Research from the Financial Times Group

Executive Summary Headline Findings Growth in Difficult Times The Challenges Growth Strategies Organic Growth M&A Strategic Partnerships and Joint Ventures Money Matters Global Growth Reigniting the Global Economy 3 4 6 9 12 12 14 19 21 24 28

Methodology 31 About Hogan Lovells 32

Executive Summary
Six years since the financial crisis of 2007 , it is now broadly acknowledged that many of the pieces necessary to help reactivate business activity are already in place: global equity markets rallied this year, capital markets witnessed a high water mark in debt issuance, many businesses are holding record cash savings, and global growth has averaged 3% a year since 2009. Yet, a stronger recovery is still wanting. There are fears of growing asset bubbles in property and equity markets, and we have already seen a number of false starts with swings between revival and recession. Against this backdrop, Hogan Lovells and FT Remark asked corporates what they believe is needed to reignite the global economy. For this study, the third in the Evolution series, we surveyed a global cross-section of 240 board members and heads of M&A from the consumer, energy, financial institutions, life sciences, real estate and TMT sectors, to uncover what their key challenges and strategies for growth are and to understand their expectations for the future. Their responses demonstrate a developing narrative over the last three years, which is multifaceted. Concerns around growing regulatory and tax burdens, the impact of eurozone uncertainty and access to finance are the enduring themes across all three studies. Businesses have called on central banks, regulators and governments to tackle these issues to spur investment activity, but actual M&A volumes demonstrate that there is still a long way to go. Despite this, economic indicators are on the rise in many countries, particularly within the eurozone, and developed economies in Asia and North America. The political uncertainty in last years survey has lessened with the conclusion of elections in Germany, China and Japan and this years survey shows cautious optimism, with expectations of a significant recovery in the medium-term. While a sense of cautious optimism has been present across our previous studies, 2013s improved economic factors look as though they may be the catalyst for long-awaited growth. Still, businesses will have to be creative in tackling their economic and operational challenges, and they will also have to engage government on policies that stand to influence the long-term success of their businesses. While these factors were reflected in our earlier studies, the regulatory and fiscal environments across major economies are changing at an increasingly rapid rate, and have a higher public profile, making them all the more difficult for businesses to navigate.

Headline Findings

Growth in Difficult Times Staying the course: Organic growth in existing markets is key to growth for two in three respondents. New markets: Over half say entering new product and geographic markets will help underpin growth. Teaming up: Strategic partnerships will play a key role in corporate expansion plans. The war for talent: Managing talent ranks as the top priority for success.

The Challenges Increased regulation: Respondents are pessimistic about growing regulatory strain and see dim prospects for improvement in the longer term. Tax burdens: Tax costs are seen as a key business challenge. Market instability: Economic weakness and instability is identified as a key risk over the coming two years, although it is expected to lessen thereafter.

Growth Strategies Competitiveness: Enhancing efficiency and productive capacity is identified as the top organic investment driver. Consolidation: The search for synergies and integration of complementary operations will drive M&A. Partnering to adapt: Almost two in three respondents say strategic partnerships have been key post-crisis.

Global Growth Focus on emerging markets: Three of the top five hot spots for future growth are emerging markets. Mature markets: Western Europe and North America are still key for many corporate growth strategies. Regulatory hurdles: Respondents indicate that the biggest challenge in pursuing overseas expansion is regulation.

Reigniting the Global Economy Financing: Respondents say an improvement in financing conditions is essential for reigniting the global economy. Eurozone uncertainty: Economic conditions are becoming more stable, but respondents say instability is still a hurdle to stronger growth. Bold regulatory reform: Reducing the regulatory burden or taking a fresh approach to regulation could help boost corporate confidence, according to over half of respondents. Money Matters Cash still king: Cash is tipped as the top funding source for the next five years. Capital markets revived: Respondents foresee resurgent capital markets in the medium-term. Non-bank lenders: Majority expect non-bank lending to remain a key funding source over the long-term.

Growth in Difficult Times

Key Findings
Staying the course: Organic growth in existing markets is key to growth for two in three respondents. New markets: Over half say entering new product and geographic markets will help underpin growth. Teaming up: Strategic partnerships to play a key role in corporate expansion plans. The war for talent: Managing talent ranks as the top priority for success.

Pursuing Growth Although the fundamentals are improving, our respondents still expect to see market weakness for the coming two years. Respondents have come to terms with this and are shaping strategies by pushing ahead in core business areas and honing in on opportunities. As has been the case for the past three years, two in three of our respondents are planning for organic growth in existing markets. Harnessing existing strengths, skills, operations and relationships to increase output and enhance sales is a cost-effective way to deliver growth. However, businesses are not shying away from new challenges altogether, with respondents this year showing greater willingness to diversify over half indicate they will move into new business areas, compared to just over a third last year. But, clearly, any moves towards diversification will need to be underpinned by a clear and robust strategic vision. Organic growth can be effective in new markets with many managing risks by setting up strategic partnerships. Nearly two in three respondents say long-term partnerships form part of their growth strategy. Partnerships can deliver deal synergies without M&As costs and commitments.

Organic business to remain the engine of corporate growth In which of the following ways do you see your business growing over the next two years?

Organic growth in existing markets 66% Entering into long term strategic relationships with others 43% Moving into new areas of business 57% Entering new geographical markets 31% Acquisition in existing markets 45% 49% 61%

Market Highlights:
Europe: Strongest appetite for strategic partnerships with nearly three in four planning to team up. TMT: Most likely to enter new business areas; 80% identifying this growth option.





40% Percent





They can also provide quick access to new markets when businesses look to expand outside of their existing areas of operation. US real estate firms have used partnerships to enter markets such as Latin America, where demand is surging and the opportunities available give some hope for growth, explains a Senior VP of Finance from a US-based real estate company. Ensuring success Corporate growth cannot be achieved without the right team on board to drive the strategic agenda. In keeping with findings from last year, respondents rate talent management as a top priority for success; over two-thirds rank it in the top two. Talent management is clearly more significant in sectors dependent on highly skilled workers. Over 70% of respondents in TMT, financial services and life sciences cite talent as one of their top two priorities.

Expertise and adaptability take on greater significance in these three sectors, known for their dependence on technical knowledge and competitive landscapes. Tapping into the global talent pool can help bridge the talent gap, but businesses may encounter strict immigration controls. In the US technology sector, this has created a call to action. In early 2013, Facebook CEO Mark Zuckerberg joined forces with leaders in technology to found the political advocacy group,, which advocates comprehensive immigration and education reform.

Talent the top priority for success In order of importance, which of the following are your main priorities in making your business more successful in current markets? (Please rank 1 to 5, where 5 = most important)
Talent management 67% Supportive shareholders 41% New technology 35% Effective business partnerships 30% A robust capital structure 27%

Market Highlights:
Europe and UK: Most likely to prioritise talent management, with three in four identifying it as a top priority. Financial services: Half say talent management is a top priority.










Percent ranking either 4 or 5

Respondents express a preference for organic growth in existing markets, but also show a greater appetite to enter new business areas compared to last years study, suggesting stronger confidence. Be it organic growth or M&A, one thing businesses cannot afford to do (in a moving market) is to stand still. Talent management Competition for talent is fierce. Getting the right people on board requires a thoughtful approach to recruitment, training and incentivising. Attracting and retaining the best and the brightest is key to growth. This is a challenge for employers as workers are no longer simply content to be in employment, but demand higher wages and more flexibility to achieve a work-life balance. For many businesses there are broader factors at play they simply face a talent deficit for key functional areas of their business. Strict immigration controls, even for highly skilled workers as in the US technology sector, and government talk of salary and bonus caps can stifle capacity for innovation just when businesses need it most.

Dr. Ingrid Ohmann, Co-Head of Hogan Lovells Global Employment Practice, explores how firms approach talent management and how best do so with success
If a company seeks to be a market leader, it has to attract and retain top talent. In different markets and industries, the challenges are varied, requiring employers to approach talent management with tailor-made solutions. In many advanced economies, demographic change means there are fewer young people and more competition among recruiters. Attracting the best and brightest requires outreach through new channels, such as social media. Here, timing is also essential, with many firms moving to build relationships with undergraduates way before they enter the workforce. Wages, while important, are not the only factor employers need to consider to attract high performers. A strong brand helps, but so too does geographic location. Many young professionals seek out the cultural opportunities and amenities that big cities provide. Offering a good work life balance, career progression, and professional and personal development are all important. Internally, organisations should be prepared to move quickly. Hiring should not be bogged down in excessive bureaucracy. Whereas the crisis period saw many workers happy to simply have a job, this is no longer the case potential employees are often looking for jobs when they are in the position to increase their earning potential and career progress. Competition for talent is constant. HR departments need to be disciplined and decisive, moving quickly to recruit and retain top talent.

The Challenges
Key Findings
Increased regulation: Respondents are pessimistic about growing regulatory strain and see dim prospects for improvement in the longer term. Tax burdens: Tax costs are seen as a key business challenge. Market instability: Economic weakness and instability is identified as a key risk over the coming two years, although it is expected to lessen thereafter.

In the current challenging and unforgiving landscape, innovation has been the go-to reaction. Innovation in our industry is now the talk of the business world, comments a Corporate Development Manager at a US-based software company. Over half of those surveyed agree. They say product and service innovation have been among the most significant industry changes in the past five years and a key challenge for businesses is to ensure they are constantly innovating and leading development in their industries. You must innovate to compete. But it is regulation that presents the greatest challenge to businesses, with two-thirds citing new regulation as the most significant development of the past five years and many say it is their biggest challenge. The feeling is strongest among financial services firms, which have been engulfed in a flurry of reforms such as Basel III and Solvency II in Europe, and Dodd Frank in the US. Government encroachment goes beyond regulation. Respondents expect onerous taxes to be among the top business obstacles. A public backlash against tax avoidance worldwide has made reform a politically convenient tool for governments looking to

Businesses respond to downturn with innovation What have been the most significant changes witnessed in your industry in the past five years?
New regulations 64% Product and service innovation Emergence of new market leaders 43% New business opportunities 43% Distribution innovation 31% Displacement of market leaders 31% Demand collapsed 22% No change 8% 0% 10% 20% 30% 40% Percent 50% 60% 70% 80% 56%

Market Highlights:
Financial institutions: 95% say new regulations are the most significant change post-crisis. Asia: 60% say new market leaders have emerged postcrisis.

raise revenues during a period of budget deficits and ballooning public debt. The OECD is spearheading global tax reform. The organisation unveiled plans to reform multinational corporations international tax planning in July 2013. Enacting a co-ordinated global change to tax treaties will take years to complete, and it is not clear what final form it will take. It is clear, however, that it aims to increase taxes paid by businesses. General market weakness is a greater short-term concern. Over half say it will be a top challenge in the coming two years, but encouragingly the figure drops precipitously for the period thereafter.

The innovation imperative Competitive advantage can be fleeting. This pressing reminder helps focus minds on product and service innovation, particularly at a time when businesses are fighting for market share. At an industry level, innovation drives economic renewal. For individual companies, the success or failure to innovate can be the difference between market supremacy, or market decline. Respondents expect the economy to be weak for the coming two years, so businesses will need to find ways to enhance sales and increase market share by outperforming and out-innovating competitors. Regulatory readiness Regulatory change can be both costly and distracting. With expectations that increased regulation will remain the top challenge in five years time, developing a framework that feeds directly into corporate strategy and proactively engaging to shape regulatory change will become ever more important if businesses want to return to growth.

Respondents expectations about the future reveal a shifting landscape. They expect economic challenges to dissipate, but show concern that growing government scrutiny and intervention will continue to present business challenges.

Market weakness and financing difficulties to lessen, protectionism and global competition to rise What do you believe the greatest challenges will be in your industry over the next 12 to 24 months? And over the next 3 to 5 years?


55% -6pp 61%

55% 61%

29% -30pp -30pp 59%

29% 59% -1pp

54% 55%

Increased Increased regulation regulation

General General market market weakness weakness and volatility and volatility

Rising tax burden

Next 12-24 months Next 3-5 years PP Percentage point change (+ / )

41% -5pp 46%

41% 46%


44% -1pp 45%

44% 45%


44% 41%

GrowingGrowing domestic domestic competition competition

Product innovation Product innovation

Growing competition from overseas


Tax Planning Similarly, international tax reform will be front and centre for global policymakers. Experts stress the need for businesses to engage with national governments and the OECD. Proposed reforms are both global and local, meaning businesses must be prepared for possible changes on both fronts.

Fulvia Astolfi, Co-Head of Hogan Lovells Global Tax Practice, outlines developments in international tax structuring and what it means for business
In recent months, the Organisation for Economic Cooperation and Development (OECD) unveiled plans to combat base erosion and profit shifting (BEPS), or put more simply the practice of minimising tax exposure through multinational tax planning. Broadly, it calls for international tax co-ordination to increase revenues to national governments, while creating a clear set of rules for the world of business. Practices offering a tax advantage, in the use of offshore jurisdictions and transfer pricing, for instance, will be subject to enhanced scrutiny. National businesses may benefit from such reforms as global brands lose the competitive edge that an international tax structure traditionally brings. The initiative is in its early stages and change will not happen overnight. While the OECD plans to roll out BEPS in the next two years there is currently no certainty around its final form. What is certain is that this is the most ambitious call for reform to the international tax system ever seen. If implemented, it will redefine the way multinationals structure their businesses for tax purposes, and as such every corporate should be closely monitoring developments.

Growth Strategies: Organic Growth

Key Findings
Competitiveness: Enhancing efficiency and productive capacity is identified as the top organic investment driver. New sales channels: Pivotal to bolstering revenues and reaching customers for nearly two in three respondents. Customer retention: Diminished brand loyalties and growing competition are pushing businesses to work harder to keep customers.

At a time when most respondents expect economic activity to remain subdued, it is unsurprising that organic growth is a focus. It is potentially less expensive than M&A-fuelled growth and it can give businesses a competitive edge to achieve solid and often substantial growth. In the post-crisis period, businesses have been cutting costs to strengthen balance sheets and investing capital sparingly. Having cut back significantly they are now considering how to use existing assets, capital and talent more efficiently and effectively in order to expand their customer bases and maximise profits. Accordingly, most plan to invest in targeted operational improvements more than two in three say organic investments will target enhanced efficiency and productive capacity. This focus on streamlining and improving operations is driven by a need to be more flexible and to respond to opportunities as they arise. Businesses must also be more efficient, responding to threats to their market share from competitors, which is understandable as nearly half of those surveyed expect heightened competition at home and abroad. The CFO of a Spanish communications group explains: Through organic growth we want to build a streamlined organisation, with short information channels that enable us to respond quickly and flexibly to customers needs and market trends. Developing state of the art products and systems that our customers need to succeed is the basis for strong partnerships and drives our organic growth. Alternatively, three in five respondents say they will focus on developing new distribution or sales channels and on customer retention. Setting up new distribution channels may involve establishing third party relationships, but increasingly it depends on developing a digital strategy. Traditional bricks-and-mortars have harnessed new technology to broaden their customer bases and engage more directly with consumers, developing customer retention strategies accordingly. Social media has likewise created new avenues for brand building and customer retention. This more direct and public interaction with consumers can be a blessing and a curse, making them readily accessible and marketed to by companies and their competitors alike. Similarly, negative publicity can unravel customer loyalty at lightning speed.

Andrew Skipper, Co-Head of Hogan Lovells Global Corporate Practice Group, explains how businesses are using supply chain management to stay competitive
Supply chain management is a key issue defining the competitiveness of global business. It hits the bottom line, is customer-critical and increasingly influences external reputation. A range of factors drive this importance: cost, quality, compliance and corporate social responsibility. Each impacts the competitive position of a company. Supply chain management is driven by efficiency and cost controls, and for some years we have seen companies expanding operations globally to achieve this, and to secure suppliers from low cost locations. A combination of increased transport costs, well publicised quality issues, and social and regulatory concerns has resulted however in many companies reviewing their businesses, and in some cases re-engineering or even re-homing those operations. At the least, previously held truths are being challenged and we should expect real continuing investment in this area.


It is not surprising that most respondents envisage future growth in existing markets coming from their established and core business. As one CFO of an industrial and consumer good conglomerate says: Organic growth is a strategy we use only in our existing markets. In new markets, establishing a business from scratch is a daunting task and has many obstacles. Our interviews show there is confidence in sticking to what you know, however, to grow within existing markets increasingly requires businesses to take market share from their competitors rather than developing new customers. Findings point to two key factors to keep in mind: Recognise and implement good change For many, growth will depend on their strategy for doing what they do better than before. They must combine an ability to defend and retain their existing customer base, while being

innovative enough to entice new customers from their competitors. The need to have shorter routes to market and recognise and harness new technology or innovations to achieve this is seen as paramount. If you get it right, then it will encourage growth, but ignore changes in the market place or fail to adapt or adopt in time and you risk stagnating or losing market share while your competitors thrive. Flexibility is key Survey results show respondents are most concerned with running lean, able and competitive businesses. Building efficient operations and supply chain is crucial if you intend to take advantage of changes in the market quickly, building market share without having to increase fixed costs. In particular efficiency through common platforms or components across various businesses or product lines; centralised buying or selling hubs; and engaging on regulatory matters that may improve the ability to gear up and down as required are essential to underpin a successful organic growth strategy.

Businesses meet enhanced competition with enhanced efficiency What will be the main drivers behind your investment in organic growth?

To enhance efciency/productive capacity 70% To develop new distribution/sales channels 61% Customer retention 58% Product diversication 45% Brand building 45%

Market Highlights:
UK and US: Greatest interest in enhanced efficiency and productive capacity with more than two in three identifying it as an investment driver. Consumer: Most likely to prioritise brand building as identified by 63%.










Growth Strategies: M&A

Key Findings
Consolidation: The search for synergies and integration of complementary operations to drive M&A. Growing in existing markets: Two in three respondents will use M&A to increase market share in current markets. Entering new markets: Venturing into new geographies is a catalyst for M&A for over half of respondents.

Deal activity globally has remained sluggish in the past two years amid economic malaise and low confidence. Figures from Mergermarket show that over the first three quarters of 2013, global deal volume slipped by 2.7% to 9,565 deals, even as global deal value rose by 6.4% to US$1.6 trillion. The strategic rationale to do a deal must be stronger than ever in todays environment. Businesses remain risk-averse and many sellers are reluctant to budge on pricing. Our research suggests corporates will continue to keep excess cash as savings. However, it also suggests corporates spending cash will use it for M&A, either in response to investor pressure or to capitalise on low valuations. The majority of respondents expect consolidation plays to be the biggest M&A driver. Consolidation will be especially important for corporates seeking operational synergies in fragmented industries, such as business services and consumer, and in rapidly changing industries like TMT. Here, consolidation will help to accelerate supply and distribution chains, while also bringing new technologies and revenue streams in-house. Smaller cash-strapped corporates may also benefit from the consolidation trend.

M&A to be driven by a wave of consolidation What do you believe will be the main drivers behind M&A investment?
Consolidation 69% To increase market share in existing markets 63% Distressed M&A opportunities 55% To enter new geographic or product markets 53% Improved nancing conditions Attractive valuations Robust equity markets 48% 46% 35% 20% 30% 40% Percent 50% 60% 70% 80%

Market Highlights:
Consumer: Industry most likely to use M&A to enter new geographic or product markets (70%). Real estate: three in four say distressed M&A to be a top deal driver.




I believe consolidation activity will again dramatically pickup, says the Finance Director of an Italian energy company. Due to the limited ability of smaller companies to raise capital for expansion, especially with the current state of capital markets, they are increasingly turning to bigger players with deeper pockets to acquire them and back their investment plans. Increasing market share is seen by two-thirds of respondents as a key M&A deal driver. But distressed M&A, identified by more than half as a spur to deals, could enhance this appetite in the near-term. After a prolonged period of subdued growth, many industries are seeing the effects of excess sector capacity, such as lower margin growth and an intensification of competition. Many businesses will be looking to overtake weaker rivals and increase market share where they already have a presence. Over half of those polled say entering foreign markets and new product segments will be

an M&A spur. Of those who believe M&A will be driven by entering new markets, three quarters expect it will be geographic rather than product related. When expanding in a foreign market no company has patience for organic growth, comments a financial institutions respondent from South Africa. They want quick access with expectations of quick returns. Thus M&A is the ideal way for expanding in new geographies. Data tracked by Mergermarket lends credence to the idea that geography plays a big part in businesses M&A strategies. In 2012, 35% of global M&A transactions were cross-border, up 3 percentage points from 2009. The figures for deal value are far starker last years proportion stood at 36%, an increase of 9 percentage points from 27% in 2009.

Global M&A Trends

Deal value US$bn

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Number of deals Number of deals Deal value US$bn



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Hotspots The Mergermarket Heat Chart, which tracks company for sale stories, shows the greatest deal heat in the TMT space, particularly in the Americas. The sector has bristled with activity so far this year. Seven of the top ten M&A deals of 2013 have been TMT transactions, including the largest deal of the year Verizon Communications bid to acquire the 45% stake in Verizon Wireless for US$127 .6bn from Vodafone. Amid a period of record low interest rates, Verizon borrowed some US$60bn to help finance the deal. But access to finance is easier for larger, more creditworthy corporates, which enjoy a greater range of funding options. A stronger economic recovery will in part depend on credit flowing to sub-investment grade businesses, which are often blocked out of capital markets and reliant on banks or other credit sources. This partly explains why respondents do not rank improved financing conditions higher as a deal driver.

In Asia and Europe, the Industrials & Chemicals sector exhibits the greatest level of deal heat. Europe represents the worlds largest M&A market for Industrials & Chemicals accounting for 43% of announced deals in this sector for Q1-Q3 2013. Germany, the industrial heartland of Europe, represents almost one quarter of Europes share alone. Its high-tech manufacturing industry and stable economy make it a highly sought-after destination by buyers from other markets. Looking at Asia, the size of the Industrials & Chemicals M&A market is just over a quarter of the global total. Prospective deals follow a rising trend of announced transactions. Indeed, the pace of deal volume growth in Asia is up by 8% year-on-year in the first half, compared to a 9% fall for the overall global figure. More generally, Asia-based activity in the TMT and consumer sectors is on the rise. The growth of the middle classes in many Asian countries (and the accompanying rising household spending) could signal new opportunities for M&A.

Heat Chart Sector

TMT Industrials & Chemicals Energy, Mining & Utilities Consumer Life Sciences Financial Services Business Services Leisure Transportation Real Estate Construction Agriculture Defence Government Other

895 526 684 418 517 265 270 146 113 38 70 21 75 12 2

552 733 463 501 290 271 244 213 118 211 122 83 2 14

397 498 314 490 243 249 246 203 136 84 119 47 15 13 8

20 10 70 13 5 33 6 12 8 4 5 7 1 2

Middle East
49 15 15 8 31 22 12 9 1 12 2 2 1 1 1

1,913 1,782 1,546 1,430 1,086 840 778 583 376 349 318 160 93 27 27








The Heat Chart shows company for sale stories tracked by Mergermarket over 01/04/2013 to 04/09/2013. Opportunities are tracked by the dominant geography and sector of the target company.


Deals that deliver Just as deal rationale differs by industry and company, so do experiences with M&A. When asked if M&A has met expectations, three in four respondents say yes . But there is variation by sector with energy respondents being the most satisfied (85% say yes) and those in the TMT space being the least satisfied (65% say yes). This stands up to scrutiny. Energy M&A is often more straightforward, as its focus is more on physical resources than people. When capital costs are high, the alternative of breaking ground on fresh and risky organic investments is often present. By contrast, TMT deals are often driven by harder-to-measure incentives, like staying ahead of the curve, creating new technologies and securing the right people for product development.

M&A lessons When asked what they would do differently, respondents most often say: Negotiate a better price. Use better advisers. Undertake more in-depth due diligence. Prioritise post-merger integration. Focus on assets complementary to core business.

We will probably scrutinise the target more closely and check their financial accounts in greater detail, says the CFO of a Qatar-based property firm. Meanwhile, the CIO of a French TMT company says, In the past, we paid a high price when integration did not go to plan. These are common complaints when considering why M&A fails to deliver value. And while serial acquirers may have developed best-practice for doing deals, companies that do one or two big deals every few years may not have internalised these lessons.

M&A a good bet for growth Has M&A delivered what you hoped for in the past?
Energy 85% Financial Institutions 83% Consumer 76% Life Sciences 74% Real Estate TMT 65% Overall 75% 20% 40% Percent answering Yes 60% 80% 100% 66%

Market Highlights:
Real estate and TMT: Around one in three say M&A has not delivered. Energy: 85% say past M&A has met their expectations.


Stuart Stein, Co-Head of Hogan Lovells Global Corporate Practice Group, discusses how M&A can position companies to capture new global opportunities
It is easy to generalise about the increasingly important role emerging markets play in the global economy, but what was once an emerging market eventually will become the worlds largest economy. China is currently the worlds second largest economy. Its 10 largest cities range in size from 6.6 million to over 18 million people, and urbanisation continues at a rapid pace, with a growing middle class. Regions such as Africa, Latin America and South-east Asia are seeing similarly exciting prospects. Companies positioning themselves for long-term growth cannot ignore these opportunities. That requires coming to grips with what it takes to commit to and succeed in new markets. The complexity of an international deal, and the effort and cost needed to make it successful, often push acquirers toward bigger transactions. To make an investment worthwhile, it has to have scale. Here, a company has to really know what they are after. M&A differs from the joint venture option. It fully commits the acquirer to every aspect of the operations, meaning reaping all the rewards, but also taking all of the risk in a market in which it might have no experience. If the investment is significant, management often will want to have full control and ensure shareholders realise the value. Buying partners out of a joint venture can be costly, which is something corporate managers have to consider upfront. It takes a focused effort to understand the business and the environment in which that business operates to be successful. When integrating an acquisition, for instance, a best of breed approach may not work given the different regulatory, cultural and organisational factors at play. Investigating the market beforehand can go a long way in helping to avoid pitfalls. Understanding the practical risks around currency convertibility, the tax implications in the foreign market and at home, and the regulatory, political and cultural risks are all necessary.

It is clear that, alongside organic growth, M&A will continue to be a key part of corporate strategy, whether to consolidate in existing markets or to enter new business areas or geographical markets. Consolidation The survey indicates that consolidation is the biggest driver for M&A activity as companies seek synergies and operational efficiencies. The increasingly interventionist approach taken by competition authorities, coupled with the growth of supra-national bodies such as COMESA, is likely to make implementation of such transactions ever more challenging. Addressing these issues at an early stage will be crucial. Making the deal work It is encouraging that overall about 75% of respondents regard their past M&A activity as having been successful. This is in tune with recent research which shows that a greater proportion of M&A transactions now deliver value than has historically been the case. A greater emphasis on due diligence and on integration planning at an early stage has been key to this.


Growth Strategies: Strategic Partnerships and Joint Ventures

Almost two-thirds of respondents say strategic partnerships will play a key role in their growth strategies over the next two years. A similar proportion say they have used partnerships and joint ventures to adapt to changes in their industry over the past five years. The increasing attractiveness of strategic partnerships can be attributed to several factors. The CFO of an Italian clothing and shoe manufacturer says, In developed markets we will see a rise in partnerships and strategic alliances as companies look to reduce competition. A senior manager from a French software firm believes it stems from the crisis: I think the rise has been because of poor financing conditions and economic crises. Echoing sentiment expressed by other respondents, the Finance Director of a Brazilian energy firm believes, Expanding in the emerging markets to take advantage of the rising demand has been a key strategy for energy companies. Their primary way of getting into new markets has been through partnerships and strategic alliances. It is not surprising then, that all of the BRICs rank in the top 10 global markets for strategic alliances and joint ventures tracked by Mergermarket since 2009. In that time, however, partnering has remained a popular strategy in the worlds largest economies as well. Casting a look at the overall numbers, strategic alliances remained buoyant amid the M&A drought of recent years: in the first three quarters of 2013 there were 37 deals worth US$16.7bn, compared to a slightly higher deal count of 43 in the same period for 2012, but with a lower combined deal value of US$4.1bn.

The majority of respondents tell us that partnerships have been among the principal ways firms have adapted to the changed market landscape in recent years. With 61% expecting to use strategic partnerships as a growth strategy

Businesses adapt to change through partnerships How have firms adapted to changes in your industry over the period?
Partnerships and strategic alliances 62% Moved toward operational exibility 61% Moved toward nancial exibility 57% Entered or withdrew from product markets 57% Augmented product and service offerings 54% Entered or withdrew from geographic markets 48%

Market Highlights:
Life Sciences and TMT: Respondents most likely to use partnerships post-crisis. Asia: Region has the highest share of respondents opting for strategic partnerships over the past five years.





40% Percent





Jamie Barr, Head of Hogan Lovells Corporate Practice, Asia, explains the growing attraction of strategic partnerships in Asia
No one will have missed the dramatic increase in investment into the Asia-Pacific region over the past 15 years. While money has poured into China, countries such as India and Indonesia have also been major investment targets, and countries such as Myanmar are emerging as likely investment destinations. Delivering goods and services to the large and increasingly wealthy population of the region may, today, be as much an objective as establishing a factory to manufacture products for sale worldwide has been in the past. Strategic partnerships and joint ventures have long been popular for businesses investing in these markets, whether to establish a long-term relationship or to test the water before taking the plunge. The lack of full control may be a small price to pay for access to local know-how and an ability to get things done. Frameworks for establishing strategic partnerships are guided by local regulations, but there are a few practical considerations that are also relevant across the region. For example, many businesses are family owned or tightly controlled, implying succession and management issues. Outsiders find partnerships a useful (perhaps the only) way to build a relationship with a sought-after, familycontrolled business. Over time they can leverage the relationship and perhaps even secure greater control of the business. It is also worth noting that many countries in the region impose restrictions on foreign ownership. As a result, partnerships and other hybrid structures may be the only way in which an outsider can access that business.

looking forward, they will have to keep the long-term strategy in mind when setting it up. Path to control Entering a new market by way of partnership, alliance or joint venture may be a necessity, due to foreign ownership restrictions, simply the opportunity available, or may be a means of hedging risk. But in any event there may come a time when circumstances change and outright control becomes both possible and desirable. Establishing at the outset a path which can lead to ultimate control in the future should, if negotiable, be a key element of any joint ownership arrangement. Relationships matter This is true in all business situations, but firms partnering abroad must ensure they build relationships on multiple levels, not only with their collaborators (and the various constituencies within, which may have differing interests), but also with regulators, and local and central government which can be highly influential on the markets and on day-to-day conduct of business.

Top 10 markets for Strategic Alliances and Joint Ventures, Q1 2009 Q3 2013
Deal volume USA China Germany United Kingdom Japan France Russia India Australia Brazil Other 46 27 23 20 17 14 14 13 9 9 109 Deal value US$m 24,317 1,903 1,589 3,428 4,379 1,980 743 791 8,934 13,070





Money Matters
Key Findings
C ash still king: Cash is tipped as the top funding source for the next five years. C apital markets revived: Respondents foresee resurgent capital markets into the medium-term. N on-bank lenders: Majority expect non-bank lending to remain a key funding source over the long-term.

Financing emerges as one of the most important issues facing companies in the post-crisis world of business. The changes to the financial sector during and after the crisis have been far reaching and well documented. After the acute onset of the financial crisis in late 2008, credit became difficult to access for many corporates. In turn, increased risk aversion prompted many to hoard cash. The situation has eased slightly with rounds of monetary easing ushering in cheap credit for investment-grade borrowers. It looks to be working worldwide private sector borrowing edged up last year for the first time since the crisis, according to World Bank data. But for many companies, borrowing remains difficult. Traditional lenders, pre-eminent in the pre-crisis years, have been weakened by the new regulatory landscape and growing competition from non-traditional lenders. The changing face of global finance Banks themselves are facing tougher capital requirements under Basel III. To be compliant, they have been streamlining their operations and building up necessary capital reserves. As banks have constrained lending, the gap has been partially filled by institutional investors and specialist credit funds unencumbered by the same restrictions.

Banks and capital markets to bounce back; non-bank lenders to play key role as financiers going forward In terms of funding, where do you expect financing will mostly come from over the next 12 to 24 months? And over the next 3 to 5 years?


75% 73%


60% 68%


63% 46%



Existing cash

Lending from non-bank lenders


Specialist credit funds

68% +12pp 51% 39% +35pp 33% +14pp

40% 26% +21pp

13% 34%
Next 12-24 months Next 3-5 years PP Percentage point

Asset nancing

Capital markets

Project nancing

New share issues

change (+ / )

Our survey results reflect these changes. Respondents expect businesses to continue using existing cash for financing over the near term, and expect to see a big resurgence in financing from banks, capital markets, asset and project financing within the next five years. Non-bank lenders and specialist credit funds are expected to see their role diminish somewhat. This is more so the case for specialist funds; non-bank lenders are expected to remain among the top five sources of funding in five years time. Another change anticipated on the lending landscape is the reinvigoration of capital markets as sources of financing. Although the current low interest rate environment has given rise to cheap debt for those investment-grade businesses able to tap into debt markets, non-investment grade businesses have had to rely on other sources. The shift toward capital markets over the next three to five years could indicate a revival in corporates financing deals via equity capital markets, which have experienced a revival in 2013 thus far.

To spend or to save? When asked how corporates will use their cash and how they should use their cash over the next 12 to 24 months, respondents rate keep as savings as most likely. But they do not believe this is the best use. In fact, keeping cash as savings is the least popular option for how businesses should use cash. Similarly, respondents expect that when businesses do deploy capital, they will use it for M&A and yet they do not consider M&A the best option. While they are quick to call M&A the fast way to growth , responses suggest businesses are not giving organic growth the attention it deserves: spending on organic growth is considered one of the best things companies can do, yet one of the least likely things companies will do. This is surprising given that most respondents expect to grow their business through organic operations over the next two years. Of course, in the wake of the financial downturn and its backlash, respondents also highlight

Corporates hoarding too much cash How do you expect businesses to use their cash over the next 12 to 24 months? And how do you believe businesses should be using it?
Keep as savings 4.03

Market Highlights:

Energy: Deleveraging and investing in organic growth should be businesses top priorities.

M&A investment



Pay down debt 4.32 Return money to shareholders 4.20 Invest in organic growth 3.89 3.4 3.6 3.8 4.0 4.2

TMT: Respondents rate M&A as the most likely use of cash.



How businesses should use cash How businesses will use cash



Mean average (Scale of 1-6, where 1 = least likely use / least useful and 6 = most likely use / most useful)


using cash to pay down debt and return money to shareholders. There has already been deleveraging across the private sector in many large economies, but debt levels remain high. Shareholders are constantly demanding their share of returns, and they have waited a long time. In order to get their support, firms should return some of the money they are holding, says the CFO of an Asian consumer company.

are well-advised to be open-minded about which debt providers they approach. By their very nature, working capital facilities are likely to remain the preserve of relationship banks, but given the number of non-bank lenders now in the market, for longer tenor term loans it pays to exploit the competitive market.

Survey results show respondents expect traditional finance providers to recover in the coming three to five years. Five years after the collapse of Lehman Brothers, and with many financial services firms still struggling, the prognosis cannot be taken for granted. Developments in financial markets are still in flux and markets remain fragile. Monetary easing has had a stabilising effect, but is not a long-term solution for reigniting growth. Our findings point to a couple of factors respondents should keep in mind as the financing landscape continues to evolve. Capital markets comeback With capital markets expected to improve, corporates looking to raise equity or debt financing need to be prepared. Clearly, capital markets have improved post-crisis, but investors will not overlook weak business fundamentals in their search for yield. Going public requires more than adhering to tough compliance and financial reporting standards. A good growth story is essential for getting investor buy in. Likewise, successful bond issuance depends on having a compelling story to attract investors. Alternative financing routes Alternative sources will remain a key part of the financing mix in the next two to five years. Corporates wanting to exploit the debt markets

Christoph Louven, Head of Hogan Lovells Corporate Practice, Germany, assesses the opportunities and challenges in raising finance
Financing has been an overriding concern for many businesses in recent years, understandably. Yet there are signs financing conditions are improving. Capital markets have been stronger overall this year, supporting several initial public offerings and rights issues in Europe and elsewhere. We have also witnessed record bond issuance among high-grade corporates with some landmark transactions in 2013. Debt is still difficult to come by for some businesses, particularly those without access to capital markets that have traditionally relied upon banks. But this part of the market is also showing signs of improvement. We are seeing greater willingness by banks to back M&A, particularly in markets such as the US and Germany. The uptake in lending by insurers has brought a fresh source of funding and greater competition, particularly in the real estate market. The move by institutional investors into the lending space isnt surprising. There is a need for financing and they can get a good rate of return in a low interest rate environment. Businesses should certainly approach such lenders when considering their financing options. Institutional lenders will continue playing an important role as financiers, although there is a limit in the extent to which they can replace more traditional forms of financing. Many have strict restrictions imposed by regulatory law on the amounts that can be invested towards such ends in addition to requirements regarding the risk profile of the assets into which they can invest. German insurers need to have first class security, for instance.

Global Growth
Key Findings
Focus on emerging markets: Three of the top five hot spots for future growth are emerging markets. Mature markets: Western Europe and North America are still key for many corporates growth strategies. Regulatory hurdles: Respondents indicate that the biggest challenge in pursuing overseas expansion is regulation.

Trade and investment liberalisation over the past 20 years vastly expanded opportunities for doing business abroad. The reforms helped capital, labour and goods and services to more easily cross borders, bringing huge boosts to economic growth. Yet little has happened in recent years as the WTO Doha round has yet to be successfully concluded. Shifting centres of gravity Results show the highest proportion of respondents (19%) plan to grow their business in Western Europe over the next two years, with those expectations coming from respondents already in the region. Notably, three of the top five regions that respondents expect to grow in are emerging markets. Greater China, South-east Asia and South America rank highest over the short and medium-term. The global financial crisis put advanced economies on the back foot, elevating the importance of other regions in corporate strategies. A look at global growth is revealing in this context: the share of world GDP contributed by advanced economies has fallen to an estimated 61% for 2013, down 17 percentage points from 10 years ago.

Businesses focus on emerging markets In which regions do you expect to grow your business going forward?
25% 19% 21%


18% 17%

16% 15%

14% 15%

15% 15%

Central & Eastern Europe 11% 12%


12% 13%

10% 11% Sub-saharan Africa 6% 8%

10% Western Europe South-east Asia South America North America Greater China

8% Central America 4% 5% Middle East 5%

South Asia


3% 4%



Next 12-24 months Next 3-5 years



High-growth emerging markets have made up the difference. Their share of global GDP has risen to an estimated 39% this year from 22% in 2004. For sectors such as consumer, financial institutions and real estate, booming demand in emerging markets has helped companies to offset weak domestic demand. Life sciences businesses are also interested in expanding into emerging markets, thanks to growing demand for healthcare products and services. There are also operational attractions: several respondents say emerging markets are ideal locations for R&D, and many cite China as especially appealing in this regard. Developing markets provide ample opportunities to ensure long-term growth. Countries like India, Russia and Brazil are attractive for R&D, where new product development is effective and costs less. Talent is available in abundance and setting up R&D centres will be very helpful, says a respondent from the US life sciences industry.

In the post-crisis period, cross-border trade has been faster to bounce back than international investment. Total trade as a share of world GDP currently stands at 63%, up from 54% in 2009 and near pre-crisis levels. FDI flows, which are considerably smaller than trade, have not seen the same rebound. FDI data for the G20 countries show total inflows and outflows were down year on year in 2012. Challenges to international expansion The vast majority of the survey pool believes that regulatory hurdles are the biggest challenge companies face when expanding overseas. Overall, 85% identify it as a challenge, while 43% say it is the most important challenge. One respondent based in a US financial services firm explains: When expanding internationally, companies must meet regulatory requirements of both domestic and foreign markets. Domestic regulations can be managed, but in a foreign market with a totally new regulatory system, getting all the approvals is not easy.

FDI trends for G20 economies

Global trade trends

66 64

Percentage of world GDP

Percentage of world GDP '04 '05 '06 '07 '08 '09 '10 '11 '12

62 60 58 56 54 52 50












Source: OECD

Non-OECD G20 outflows OECD G20 outflows

OECD G20 inflows Non-OECD G20 countries inflows

Source: IMF

And with the growing focus on emerging markets, regulatory changes come into sharper focus. A respondent from the German technology sector explains, In any foreign market, getting over regulatory hurdles is the most difficult time for any company. This is magnified in developing markets because of their underdeveloped governance. At a distant second is international tax structures, with 55% of the overall respondent group considering it a challenge. Just 13% say it is the most important. Cultural barriers are cited by 54% of interviewees as a major hurdle, giving credence to the notion that cultural barriers have been at the root of many cross-border deals gone wrong. Overcoming these hurdles takes a concerted approach by stakeholders. Trade and investment play an important role in economic activity, so any moves by governments to relax trade and investment

regulation could help to boost recovery. The most exciting development on this front is a possible free trade agreement between the EU and US. During a recent visit to Europe, US President Barack Obama voiced support for an agreement, which is now in exploratory stages. This sort of bold action would help to reignite international business and growth.

Businesses need to be more agile to be able to respond to and, in some instances, take advantage of macroeconomic trends. The financial crisis and its after-effects undermined advanced economies contribution to global economic growth. However, the crisis did little to slow the ascendency of fast-growth emerging markets, which have been growing centres of global economic activity for decades. As the pattern of global growth changes, businesses have adapted their strategies accordingly. Going global presents challenges, however. As respondents re-orient strategies to capture new opportunities there are a couple of factors to keep in mind.

Regulation the top obstacle to going global, followed by international taxes and cultural differences In your experience, what are the greatest challenges that companies face when expanding internationally? And which among these is the most important?

Regulatory hurdles

International tax structures

Cultural barriers

Political instability

85% 43%

55% 13%

54% 20%

50% 6%
Overall Most important

Unreliable infrastructure

Establishing supply chains


42% 9%

38% 5%

19% 3%

Note: Respondents were able to select all challenges that apply and to indicate the most important.


Profits and pitfalls of emerging markets Businesses see emerging markets as a key area for growth, but while the opportunities are enormous, the challenges and risks should not be under-estimated. These come when doing the deal as companies grapple with rules on foreign ownership, often unpredictably applied, and increasingly interventionist anti-trust regimes. Equally, if not more important, though is having a good understanding of the legal, regulatory and cultural environments in which the business will operate going forward and ensuring that the right processes and procedures are in place so that the business is not only fully compliant but also well positioned to take full advantage of the opportunities available. International tax structures G20 and the OECD seem resolved to make a big push towards some fundamental reform of the international tax landscape. Cross-border e-commerce and tax avoidance involving low tax offshore jurisdictions which international businesses have used for many years are specifically targeted by the OECD Action Plan

on Base Erosion and Profit Shifting (BEPS) report. This injects material and unhelpful uncertainty into the medium-term future. Cautious, conservative and non-aggressive tax structuring are keynotes to strike and businesses may need to re-evaluate existing structures and practices to ensure they are seen to be sustainable in the new, highly politicised environment.

Gross domestic product (US$bn)

Advanced economies and emerging markets shares of world GDP



90 80

Percentage of world GDP

Percentage of world GDP '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
World European Union Advanced economies Emerging market and developing countries United States


70 60 50 40 30 20 10




Source: IMF











Source: IMF

Emerging market and developing countries

Advanced economies

Reigniting the Global Economy

Financing and the eurozone Most respondents say revival hinges on the health of the financing markets and the stability of the eurozone. A look at World Bank figures shows that these factors are inseparable: domestic credit to the private sector in the eurozone as a share of GDP has fallen for three successive years even as it began to rebound last year for the world as a whole. The global credit picture is not simply geographic. Recent debt issues show that big, cash-rich corporates can access debt at incredibly low rates; sub-investment grade borrowers struggle to access credit and pay high premiums when they do. This is a problem affecting companies beyond the shores of Europe. But the landscape for raising funds has changed and will continue to change according to our survey results. Tackling regulation Over half of respondents say bold regulatory reform could also help revive investment. Governments responded to the crisis with more, not less, regulation and one bold measure might simply be to postpone further regulation until corporates are stronger. For the banking industry, this could help restore health, thereby supporting an eventual recovery in financing conditions. The increase in regulation is a defining feature of the post-crisis business landscape, with two in three respondents citing trade barriers and protectionism as the major regulatory hurdles. Foreign investment and ownership restrictions present issues too, hence the appeal of strategic partnerships in overseas markets. Cutting the red tape that freezes investors out of foreign territories could be the key to reigniting global growth. With a diversity of aims and opinions among policymakers globally, co-ordinated action toward a more supportive policy is difficult to achieve. But businesses are not taking this lying down. Our findings show businesses are

Financing and eurozone uncertainty still areas of concern for corporates What do you believe it will take to bring about a revival in investment by businesses?
Improvement in nancing markets 65% Reduced uncertainty in the eurozone 61% Bold regulatory reform by governments 56% Increased trade and investment liberalisation 56% Seeing industry leaders make big investments 51% Simplifying tax regimes 50% Government incentives (e.g. tax credits, subsidies, etc.) 49% 0% 10% 20% 30% 40% Percent 50% 60% 70% 80%

Market Highlights:
UK: Most downbeat on eurozone uncertainty with four in five saying reduced uncertainty would help revive investment. Consumer: Trade and investment liberalisation identified by three in four as key to kick-start investment.


proactively engaging with regulators and governments to help shape the policies and regulations that directly affect them. Lobbying with the aid of public affairs consultants or external lawyers has helped about half of respondents to be more hands-on in matters of regulatory reform. Of course, what a business considers harmful regulation will depend on their industry, location, strategy and size. The effects of regulation will be variable too: is it that corporates are being bogged down in red tape or is their strategy encumbered by specific regulatory roadblocks? Poised for change There are steps businesses should be taking in, to manage risk, and more importantly to ensure they are able to react swiftly to opportunities ahead of competitors: Innovation In a challenging market, businesses will have to fight to gain market share by outperforming and out-innovating competitors. Talent management Corporate growth cannot be achieved without the right team on board to drive the strategic agenda. Good change Good managers and employees can help recognise and harness new technology. If done right, it will encourage growth. Fail to adapt or adopt in time and you risk stagnating or losing market share while your competitors thrive. Flexibility Using common platforms or components across business or product lines, centralised buying or selling hubs and engaging on regulatory matters that may improve their ability to gear up and gear down as and when required are seen as essential.

Rachel Kent, Co-Head of Hogan Lovells Financial Institutions Sector, discusses the limiting effects of regulation on financial institutions
Failing to properly implement or comply with regulation in any industry can result in costly entanglement. In the financial services sector it is both costly and distracting for management. Unwelcome at the best of times, it is particularly so at a time when financial institutions themselves and the communities they service would prefer to refocus on growth. The raft of legislation, both already enacted and forthcoming, has caused many financial institutions to focus on stability, leading to conservative expansion strategies or even inertia. These days, regulation is both local and global and applies to all aspects of business from stricter capital requirements and ring-fencing of activities, to a more focussed approach to recovery and resolution of financial institutions. Higher capital requirements, soon to be implemented under Basel III, have made banks reluctant to lend. Instead, many have battened down the hatches, focussing on core operations and raising capital. Some groups are still making disposals. Even stronger players in the sector are making divestments and show little appetite for inorganic expansion. It is understandable that financial institutions confronting growing regulatory strains and postcrisis volatility are being cautious. But to a degree that greater cautiousness, at least among banks, affects their ability and appetite to lend, and undermines prospects for a stronger recovery. Positively, we are seeing more engagement between financial institutions and regulators, particularly in the US, and more often in Europe over the past five years. Going forward, there is both scope and, it seems, appetite for greater involvement.

Senator Norm Coleman, Of Counsel, Hogan Lovells Washington D.C., explains the increasingly global nature of regulation and the importance of engaging policymakers
Companies today have to take an international view when thinking about regulation and what it means for their business. Financial regulation formulated in Europe has a direct effect on financial instuitions in the US and elsewhere. Regulators in one country will scrutinise a companys IP defence in another jurisdiction. Regulators are thinking more globally and companies should, too. That is a challenge, but so too is the volume of regulation confronting companies. There are more than 70,000 pages of new regulation written in the US every year. How that affects a specific business depends on the industry. No matter what, businesses need to stay in front of the regulation and they need to engage policymakers on the issues. The truth is that policymakers want the full facts to make the most informed decisions and to avoid any unintended consequences. In the end, it is important to gain a holistic understanding of issues by canvassing opinions from the parties involved in an open and transparent way to know what their impact will be. Engaging policymakers in this way takes a concerted effort. It is a day-to-day challenge working through the issues one at a time. My sense is that there traditionally has been more of this activity in the US than in Europe, but I think that is changing. Governments on both continents are interested in helping to accelerate economic growth. The proposed free trade agreement between the US and EU is the most exciting initiative in this respect. It is exactly the type of initiative that governments should be focussed on to help stimulate stronger economic growth.

Public affairs consultants and external lawyers key engagement tools for regulatory policy Which steps is your company taking to effectively engage governments on matters of policy and regulatory reform?
Using public affairs consultants to lobby 53% Using external lawyers to help lobbying activities 49% Deploying legal tactics to inuence policy 48% Working through trade associations 39% Thought leadership projects 38%

Market Highlights:
Financial services: 55% say they use external lawyers and deploy legal tactics. Energy: Most likely industry to work through trade associations (58%).




30% Percent





In July and August 2013, FT Remark, the market research and thought leadership division of the Financial Times Group spoke with 240 senior decision makers from public companies across the globe. Respondents were drawn from six key industries in equal proportions: consumer, energy, financial institutions, life sciences, real estate and TMT. Interviews were conducted by telephone and results are presented anonymously and in aggregate.
Respondent split by geographic location Respondent split by sector





16.67% 20%



16.67% 20%
Asia Europe Rest of the world UK US Consumer Energy Financial Institutions


Life Sciences Real Estate TMT

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