The New Rules of the M&A Game: Unlocking Opportunities While Navigating Risk

Leading experts from legal and financial sectors discussed the evolving M&A landscape, focusing on tax as a strategic driver, compliance challenges, and cross-border transactions. Key insights highlighted the importance of regulatory alignment, cultural and team synergy, streamlined processes, and collaboration between internal and external advisors to ensure successful deals especially in complex markets

The discussion featured André Matias de Almeida (Partner, Proença de Carvalho), Luis Quaresma (Partner, Iberis Capital), António Serras Rendas (Partner, Cedrus Capital), Filipe Neves (Director of Legal, EMEA BU at McDonald's), Isabel Fernandes (General Legal Counsel, Grupo Visabeira), and Paolo Arginelli (Partner, Pirola Pennuto Zei & Associati), who shared their expertise and perspectives on the dynamics shaping cross-border transactions and the role of tax as a strategic driver in M&A deals.

Balancing opportunity and compliance in a complex market

Throughout the conversation, participants delved into some of the most pressing issues shaping today’s M&A market, including the growing role of tax as a value driver, the need to balance opportunities with compliance risks, and the persistent challenges inherent to cross-border transactions. The speakers offered nuanced views drawn from their respective sectors and jurisdictions, providing a comprehensive picture of the current dealmaking environment.

A key takeaway from the discussion was the importance of considering time length in communications with tax authorities and the approval process as essential elements in deal planning. Regarding the perspective of operations in Portugal, António Serras Rendas pointed out the challenges related to notifications exchanged with competition authorities, which often approach concentration acts with great caution, a factor that can significantly delay the transaction timeline. Paolo Arginelli remarked that this aspect is one of the main issues “when structuring the deal in order to make it tax efficient”, emphasizing that lately the Italian government has been changing these rules since this aspect could make “external investors reluctant in making business in Italy”.

Europe’s Competitiveness and the need for harmonization

The participants also addressed regulatory changes and the need to make Europe a more competitive environment for M&A, capable of attracting overseas investors and achieving a level of competitiveness comparable to major markets such as the U.S. and Asia.

António Serras Rendas mentioned that “the EU should have larger companies, mergers and consolidations should be welcomed and encouraged across the Union”. The harmonization of legal frameworks was highlighted as crucial to streamline operations, overcoming excessive bureaucracy and potential misalignment among national authorities. “The homogenization of the EU framework would be important in this case”, stressed Luis Quaresma.

The human factor in successful M&A

The speakers also pointed out the human and cultural dimension of M&A success. Beyond technical expertise, cultural alignment among teams and stakeholders was emphasized as a determining factor. Partnering with local professionals who not only master domestic tax regulations but can also adapt to cross-border complexities is vital for ensuring smooth and efficient deal execution. “People are your most important stakeholders”, said Filipe Neves.  “It is important to know your customer,” he added.  “Sensitivity is required for success” André Matias de Almeida replied. “A family-owned business can require more sensitivity than for other M&A deals.”

The conversation underscored the growing importance of synergy between in-house and external teams, advocating for empathetic and emotionally intelligent leadership to foster collaboration. As pointed out by Isabel Fernandes, “partnering with local entities is essential for the success of a M&A”.

The participants also emphasized that advisors must be aligned with the real needs of the sector and the internal dynamics of the companies they support. In this sense, a key aspect that was also highlighted is the need for external service providers to adopt a tailor-made approach, adapting to the specific characteristics and needs of each transaction. André Matias de Almeida noted that, as an example, “real estate transactions and asset deals often require different expertise when it comes to tax-related issues, and experts are increasingly providing tailored solutions more effectively to each one of these scenarios.”

Building strong partnerships

Moreover, the experts discussed the necessity of streamlining deal processes from the outset, by setting clear conditions precedent to ensure smoother transaction development. Aligning internal and external advisors early on, and maintaining open, strategic communication throughout the process, was seen as a critical success factor.

The round table concluded on a forward-looking note, with consensus that adaptability, flexibility, and cooperation remain the cornerstones of successful M&A operations in an increasingly complex global market. António Serras Rendas remarked that “a successful deal maker today is the one that knows how to move fast and adapt to market circumstances, considering that we are living in high volatility times”.  In the same vein, Filipe Neves pointed out that “we learned from COVID and recent political events that adaptability is essential, every pathway has its curves, and we need to know how to navigate them.”