Eyes Wide Open

Managing the Risks of Acquisitions in Rapidly

Developing Economies
F
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Eyes Wide Open
D
espite the well-
documented risks of
cross-border mergers
and acquisitions
(M&A) in rapidly
developing economies (RDEs),
multinationals have continued to
invest heavily in these markets. From
2002 through 2006, the volume and
value of cross-border M&A in RDEs
increased by 10 percent per year, on
average, with fve RDEsBrazil,
China, India, Mexico, and Russia
accounting for the lions share of the
transactions.
The principal reason for this surge in
interest in RDEs isnt difcult to
fathom: RDEs are expected to fuel
global economic growth in the
future. Cheap credit has also contrib-
uted to the boom, at least until
recently, as BCG discussed in its
latest M&A report, The Brave New
World of M&A: How to Create Value
from Mergers and Acquisitions.
However, the upswing in M&A
activity in RDEs also refects a
growing recognition that the chal-
lenges of acquiring businesses in
these markets are not quite as
daunting as previously thought,
according to a new BCG survey.
Our survey, which was based on
interviews with executives who had
collectively been involved in more
than 20 successful acquisitions in
RDEs, found that 75 percent of
executives considered acquisitions
more difcult in RDEs than in
developed markets. However, when
it came to extracting synergies from
targets in RDEs, 69 percent of our
sample said that the challenges were
generally no greater than those in
developed markets, while the
remaining 31 percent said that the
challenges were only somewhat
more difcult. (See Exhibit 1.)
The biggest difculty, these execu-
tives said, is understanding, accept-
ing, and managing the full spectrum
of risks before the deal is closed. In
particular, they cited four major
obstacles that can add to the caul-
dron of risk and uncertainty: lack of
Eyes Wide Open
Managing the Risks of Acquisitions
in Rapidly Developing Economies
Much more
dicult
How would you rate the challenges of realizing
synergies from targets in RDEs compared with
targets in developed markets?
Somewhat
more dicult
Similar
Somewhat
easier
Much easier
Percentage of responses
0
0
0
0 50
100
31
69
Exhibit 1. Synergy Realization Is Generally No More
Difficult in RDEs Than in Developed Markets
Source: BCG survey.
The Boston Consulting Group
information about the market and
the target, regulatory pitfalls, limited
deal-structure options, and the
human and cultural complexities of
dealing with entrepreneurs and
family-owned corporations in RDEs.
This Focus, which is based on the
fndings of our survey, discusses how
the top M&A players in RDEs deal
with these and other obstacles. The
bottom line is that success depends
on fully understanding the risks and
then fully accepting or rejecting
them. Acquirers cannot aford to do
things in halves. Moreover, they have
to invest signifcant time and
resourcesnot just to minimize the
possibility of postclosure surprises
but also to gain the full support of
senior management and ensure that
the investment is commensurate
with the potential size of the market.
Without top-level support, the deal
will either collapse or fail to exploit
the full opportunity.
There is no doubt that there are
signifcant opportunities to add value
through M&A in RDEs. According to
an internal BCG study, more than
two-thirds of the companies that
invest in RDEs outperform the
market within one to three months
of the announcement of a deal. By
comparison, only slightly more than
one-third of companies making
acquisitions in both developed and
developing economies outperform
the market in the same period. But
to secure and sustain these gains,
executives need a rock-solid under-
standing of the risks.
As one executive involved in a large
transaction in China explained,
Making an acquisition in an RDE
requires taking higher risksbut its
not just about high risks, high
returns. You have to assess all the
risks and then make a judgment
about what is acceptable and
unacceptable risk. Some of our
competitors underestimated the
risks and are now sufering.
The Challenges
of Acquiring Companies
in RDEs
Whether acquirers sufer or thrive
will depend on how skillfully they
meet four critical challenges:
securing sufcient and reliable
information about the market and
the target, dealing with regulatory
issues, contending with limited deal-
structure options, and managing
cultural diferences.
Insufcient and Unreliable
Information About the Market
and the Target. Sixty-eight percent
of the companies in our survey said
that the lack of sufcient and
reliable information was the most
signifcant hurdle in making acquisi-
tions in RDEs. (See Exhibit 2. For
information on the survey itself, see
the sidebar Survey Methodology.)
Evaluating the size and potential of
the market is especially problem-
aticpartly because of the absence
of sophisticated market-research
companies in RDEs but also because
reporting requirements in these
regions tend to be less rigorous and
less strictly enforced. In many cases,
data are scant or unreliable. In
China, for example, one of the
natural resources companies in our
sample discovered that there were
Lack of sucient and reliable
information
What are the most signicant challenges
in making acquisitions in RDEs?
Regulatory framework and
managing relationships with
regulators and other local ocials
Lack of deal structure options
Target managements lack of
familiarity with M&A process
Other
Percentage of responses
0 50
100
68
63
26
16
26
Exhibit 2. The Top Acquisition Challenge in RDEs Is Access
to Sufficient and Reliable Information
Source: BCG survey.
Note: The numbers total more than 100 percent because the participants in our survey were
invited to provide multiple responses to this question.
Eyes Wide Open
no market data to help us judge the
validity of an acquisition, while a
telecommunications company found
that the market projections were far
too aggressive. In another instance,
a research company estimated the
magnitude of a market to be more
than twice its possible size.
Securing reliable data about targets
can be equally frustrating. Difcul-
ties include incompatible accounting
standards, incomplete records of
transactions (especially in cash-
driven economies), and unsophisti-
cated information systems. The
[targets] system was not able to
produce reliable data, making it very
difcult to evaluate the risk and
return, said an executive of a
fnancial services company. In
addition, detailed, long-term histori-
cal data are ofen unavailable or
have not been disaggregated by
geographic market, sector, or
business unit. Creative accounting
also can be a problem.
Unclear and Ofen Poorly
Enforced Regulations. Although
regulatory challenges vary substan-
tially by country and sectorand in
some cases are not even an issue
they are considered the second
biggest obstacle, overall, to closing a
deal. The complexity of laws and
regulations in RDEs was one of the
most commonly cited problems,
ofen extending the time it takes to
fnalize a transaction and sometimes
presenting unwanted surprises. It
took us nine months to understand
the regulation and taxation issues [in
India], said one executive. Another
company discovered, afer months of
digging through statutes, that it
would not be entitled to the targets
tax concessions if it acquired the
business. This was a very material
issue because tax breaks accounted
for a signifcant part of the valua-
tion, noted one of the companys
executives.
Moreover, the drive to privatize state
assets and open previously protected
sectors to foreign investors in certain
countries is not always supported by
clear regulatory guidelines. We
spent a signifcant amount of time
and efort educating the regulators
because there was no precedent for
transactions of the type that we were
proposing, said one executive. And
even when the regulatory framework
is in place, it is not necessarily
adhered to. An executive from a
major consumer-goods company that
is active in the M&A market in Latin
America noted that many local
companies are operating in gray
areas, and we couldnt do that.
Limited Deal-Structure Options.
Many RDEs do not yet have suf-
ciently sophisticated legal and
regulatory frameworks to accommo-
date the creative deal structures that
are ofen used in industrialized
countries. For example, mechanisms
might not be in place for dealing
with restrictions on foreign owner-
ship of assets or for repatriating
earnings. Such a problem is generally
not a deal breaker, but it can add to
risk and complexity. In some
situations we have not been able to
limit our risk exposure as we may
have done in a developed market for
similar transactions, said one
executive operating in Central and
We conducted interviews with
executives who have proven track
records in acquisitions in RDEs.
Through our survey, we were able to
identify the major challenges,
obstacles, and risksand the
essential groundwork required to
take them on and overcome them.
Participants in Our Survey. Our
survey was based on interviews with
executivesboth senior manage-
ment and M&A expertswho had
been involved in 31 deals in 30
RDEs over the past fve years (from
2002 through 2006), either as acquir-
ers or as bidders. We looked in
detail at 20 successful transactions.
RDEs Included in Our Survey. The
30 countries we chose to include in
our survey were selected on the
basis of minimum levels of GDP,
size of population, and other
criteria. These RDEs are Argentina,
Bangladesh, Brazil, Chile, China,
Colombia, the Czech Republic,
Egypt, Hungary, India, Indonesia,
Malaysia, Mexico, Pakistan, Peru,
the Philippines, Poland, Romania,
Russia, South Africa, South Korea,
Sri Lanka, Taiwan, Thailand,
Tunisia, Turkey, Ukraine, United
Arab Emirates, Venezuela, and
Vietnam.
Issues Analyzed in Our Survey.
The questionnaires that we used to
conduct our interviews with
executives covered three main
issues: the rationale for an M&A
deal, the acquisition itself, and
postmerger integration.
Survey Methodology
The Boston Consulting Group
Eastern Europe (CEE). Another
commented, In hindsight, we should
have avoided the complex deal
structuring, because it did not work
out. The legal regime [in a South
Asian country] did not allow for the
tax-saving structures we were propos-
ing, and we lost precious months
resolving that issue.
The Complexities of Cultural
Diferences. It can take time,
diplomacy, and substantial doses of
empathy to understand and make
the most of owners emotional ties to
their businesses and the complex
webs of relationships that are
sometimes woven around their
companies. M&A in Asia is not only
about valuation. There are emotion-
al elements involved. In one case, we
had to spend a lot of time making
the owners comfortable that we
would uphold their reputation, since
the company bore the family name,
said the executive of a large diversi-
fed company. Patience and empa-
thy were key to gaining trust, added
another. Investigative skills are also
required. Understanding the targets
exposure to and dependence on
business relationships with some
vendors and associates who were
related to previous owners was
crucial, said an executive.
Although postmerger integration
(PMI) is generally considered no
more difcult in RDEs than in
developed markets, there are several
RDE-specifc challenges, predomi-
nantly involving human relations.
Not surprisingly, cultural diferences
are at the top of the list: 83 percent
of executives said that this was the
biggest PMI challenge. (See Exhibit
3.) In particular, executives cited a
reluctance among local RDE staf to
accept Western best practices. Some
people perceived the processes and
procedures as inefcient and time
consuming, noted one acquirer.
Another pointed to difculties in
changing the mindset from produc-
tion to sales and marketing.
However, not all of the problems lie
with the targets. Acquirers also are
ofen guilty of focusing excessively
on the traditional source of value in
developed marketscost syner-
giesat the expense of growth
opportunities.
Essential Ingredients
for Success
Successfully meeting the challenges
of acquisitions in RDEs requires a
mix of fve essential ingredients:
securing senior management
commitment, developing local
intelligence and market knowledge,
fostering relationships with owners
and regulators, focusing on the
human dimension during PMI, and
remembering that growth is the
biggest driver of superior sharehold-
er returns.
Securing Senior Management
Commitment. One of the recurring
themes from the executives who
participated in our survey was how
ofen deals fail to materialize
because the acquiring companys
senior management lacked commit-
ment to the proposed acquisition.
Of course, commitment from senior
management and the board is
essential in any acquisition, but it
becomes far more critical when
Cultural dierences
What are the biggest postdeal challenges in RDEs?
Transferring best practices
Adapting global strategy
and business model
Percentage of responses
0 50
100
83
72
50
28
11
6
11
People issues
Managing relationships with
distributors and suppliers
Regulatory challenges
Other
Exhibit 3. The Biggest PMI Challenge in RDEs Is Dealing
with Cultural Differences
Source: BCG survey.
Note: The numbers total more than 100 percent because the participants in our survey were
invited to provide multiple responses to this question.
Eyes Wide Open
doing deals in RDEs, said an
executive involved in M&A in CEE.
RDEs have large uncertainties, and
unless senior management is
convinced [that the risks and
rewards are understood and can be
managed], the chances are that a
competitor will beat you to the
winning post. Gaining top-level
support necessitates understanding,
promoting, and truly committing to
the opportunity.
Invest in understanding the market.
Simply sending a business-develop-
ment or M&A team to an RDE to
scout for deals will rarely provide
senior management with the level of
comfort required. Securing buy-in
from senior management calls for an
ironclad caserooted in a detailed,
frsthand understanding of the
practical realities of the market. And
this requires a signifcant investment
of resources, including establishing a
deal team on the ground. (See the
discussion below on developing local
intelligence and market knowledge.)
One successful acquirer, for example,
had a small team in India for three
years before it made an acquisition.
It is also prudent to invest in exter-
nal advisors and market research to
gain an impartial perspective. High-
level executives should make regular
visits to the market so that they
appreciate its warts and all
realities and are able to answer
questions raised by board members.
Bring the true risks and rewards to life.
Give senior management the
opportunity to experience the reality
of the market themselves. You can
make all the presentations you like
back at your headquarters, but that
is no match for your top brass
spending time in the region, said a
veteran of numerous deals in Asia.
In my experience, the most efective
solution is to combine an ofcial
presentation with a two-to-three-day
retreat in the region so that they gain
a feel for the market and meet some
of the players. The dynamics of your
discussions are very diferent from
that moment on, and its ofen a case
of preaching to the converted.
Push for a serious commitment to the
market. The speed of development of
many RDEs means that there is little
time for procrastination. As soon as
the support of the top team is won,
senior management should match its
confdence in the markets potential
with a commensurate investment.
An experienced acquirer advised,
Dont always take the path of lets
establish a very small operation so
we can learn the market. Ofen a
small presence ensures that the
market continues to be immaterial
to the company. You have to give it a
serious shot. A U.S.-based consum-
er-goods company recently did
precisely that. It made a $5 billion
acquisition in an RDEits biggest
investment to date.
Developing Local Intelligence and
Market Knowledge. Without
sufcient and reliable information
about the market and the target, it is
impossible to assess the true risks
and know how to manage them
increasing the probability of failure.
Fify-fve percent of the executives
we surveyed cited in-depth and
reliable knowledge about the market
and the target as a fundamental
building block to assessing and
managing the risks. (See Exhibit 4,
page 6.) Obtaining as full and true a
picture as possible is critical to the
success of acquisitions in RDEs.
Establish an on-the-ground deal team. It
is essential not only to build relation-
ships and trust with local players
but also to gain insights into local
cultures and practicesto read
between the lines when information
is limited. An on-the-ground, experi-
enced deal team with strong investi-
gative skills is especially important.
As one executive explained, In my
early years in Asia, I could never
understand how extremely wealthy
owners ran companies with such
poor fnancial results. But once you
removed the expensesthe overin-
fated cost of supplies from related
companies, the apartments in
Londonyou realized that the
business was actually quite healthy.
It is also essential that the deal team
does not operate in isolation. It is
particularly important that it regular-
ly communicate its fndings to head-
quartershighlighting concerns and
caveats as well as opportunities. The
deal team should be supported by
regular visits from strategic person-
nel who can provide a broader
(forest from the trees) perspective
and highlight issues that senior
management thinks require more
detailed examination.
Obtaining as full
and true a picture
as possible is critical
to the success of
acquisitions in RDEs.
The Boston Consulting Group
Identify reliable sources of information
and challenge them. A combination of
in-house and third-party expertise
should be employed to collect and
analyze data about the market and
the target. International companies
and consultants might seem the
logical choice for an external
perspective, but unless they have a
well-established presence in the
market, local players can ofen be a
better source of information. When
assessing the target, it is advisable to
pay more attention to its track record
and regional profle than to its
international reputation. In all cases,
data should be challenged from a
variety of perspectives to unearth
inconsistenciesespecially when
the target is a family-owned or small
to medium-sized publicly listed
company. Although creative
accounting is not an endemic
problem in RDEs, common tricks
tend to crop up in the recording of
payments to related companies and
personal expenses.
Fostering Relationships with
Owners and Regulators. Owners,
regulators, and other stakeholders in
RDEs are still wary of outside
investors. Winning their trust is
critical.
Reach out to owners and management
with the goal of obtaining an exclusive
deal. In developed markets, institu-
tional shareholders tend to control
companies. But in RDEs, many
businesses are still owned by families
and individuals. And these business
owners ofen are interested in more
than just the fnancial details of the
transaction. Their heritage, the good
name of the business, and the future
of long-standing relationships with
local supplierswho ofen are
family membersall come into play.
Taking the time to understand their
concerns and win their trust, notably
by establishing personal relation-
ships while demonstrating the
mutual benefts of the transaction, is
essential. We spent signifcant time
with the owners and showed our
empathy for their problems, said an
Internet executive involved in a deal
in India. An executive from another
company, which secured a telecom-
munications merger in China, added,
Building a personal relationship
with the CEO helped the transaction
go through.
These types of relationships, how-
ever, dont happen overnight. They
need to be developed and nurtured,
ofen over long periods of time,
reinforcing the importance of having
a local team in the market. More
critically, acquirers should proactive-
ly reach out to owners and manage-
ment to secure an exclusive deal
an essential measure for reducing
costs and risks. A surprising 55
percent of the deals in our survey
were negotiated exclusively, with
no competitive pressures. We
approached our joint-venture
partner [in Russia], and it responded
In-depth and reliable knowledge
about the target and the market
What factors are most important to increasing the chances
of successful acquisitions in RDEs?
Exclusive access
to the deal
Proactive interaction with
the targets management
and shareholders
Percentage of responses
0 50
100
55
An experienced deal team
Proactive interaction with
regulators and other local ocials
The ability to bid higher than
competitors
50
55
45
20
35
Assessing risks
Managing risks
Exhibit 4. In-Depth and Reliable Information Is the
Foundation for Assessing and Managing the Risks of
Acquisitions in RDEs
Source: BCG survey.
Note: The numbers total more than 100 percent because the participants in our survey were
invited to provide multiple responses to this question.
Eyes Wide Open
positively to our acquisition propos-
al, said one acquirer. Another
commented, We approached the
owner and educated him about the
potential value of our running the
business.
One way to reduce the time it takes
to identify potential targets and
develop relationships is through local
intermediaries. Our local invest-
ment bank was good at guiding us
and had a local network, said a
European consumer-goods company
that was moving into Russia. A
diversifed business operating in
Southeast Asia found its intermediar-
ies equally useful: Our sources
suggested that the owner might want
to sell his company because his son
did not want to run it. We ofered to
continue his legacy and got an
exclusive deal.
Educate regulators about the value of
the transaction. Regulators in RDEs
are sometimes reluctant to give the
green light to foreign acquisitions of
domestic businesses because of
protectionist policies and vested
interests of local competitors, among
other considerations. To overcome
this obstacle, it is important to
enlighten regulators about global
market and deal trends and to
demonstrate the advantages that
multinationals can bring to both the
industry and the economy as a
whole.
Specifc concerns, such as the
possibility of job losses, also need to
be proactively allayed. The regula-
tors allowed us to acquire the compa-
ny afer we managed to convince
them of the value that we could
bring to the country, said a fnancial
services company in South Asia.
Regulators can also be understand-
ably wary of breaking new ground.
An executive from a diversifed
company that was among the frst to
acquire a bank in one Asian market
noted that regulators needed to be
educated about how the process
operated in other countries and its
advantages.
Focusing on the Human Dimen-
sion During PMI. PMI can make or
break an acquisition. And as BCG
highlighted in Powering Up for PMI:
Making the Right Strategic Choices
the frst in our new series of reports
on PMIsuccess depends, to a great
extent, on planning ahead and
having most of the PMI building
blocks in place before a deal is
closed. Although the issues that need
to be addressed are largely the same
across all markets, there are several
challenges that acquirers need to pay
particular attention to in RDEs.
These include cultural diferences,
the need to protect and develop local
talent, and the importance of
transferring best management
practice. Acquirers must also not
assume that the West knows best.
Approach cultural diferences sensi-
tively. Cultural diferences are an
occupational hazard in most M&A,
but in RDEs the gulf can be signif-
cantespecially in countries that
have only recently opened their
markets to foreign investors or in
which there are distinctly diferent
value systems. It is important, right
from the outset, to map out the
diferences and potential points of
confict, as well as a route for
surmounting them. The new rules
of play should be spelled out clearly
at the start.
Our survey suggests that the most
successful acquirers deal with cul-
tural diferences swifly but sensi-
tively. For example, an acquirer might
make symbolic gestures to demon-
strate that the targets core values
which ofen refect local values
will be respected and upheld. We
decided to design the new ofce as it
was under the previous owner to
show we were committed to Indone-
sian values, said an executive with a
large consumer-goods company.
Staf also still wear the acquired
companys uniform, reinforcing the
companys unique identity.
Identify and retain top local talent. In
mergers in RDEs, the target, not the
acquirer, usually has the greatest
local expertise, and this expertise is
ofen concentrated in the hands of a
limited number of individuals
typically the owner and a few senior
managers. It is critical to identify and
approach these individuals early on,
before the deal is closed, to convince
them of the opportunities ahead and
assure them of their continued role
in the business. Retaining top talent
is particularly important in RDEs
because the demand for high-quality
employees ofen outstrips supply.
Having a local CEO who knows the
market well is also important, said
It is important to
demonstrate the
advantages that
multinationals bring
to the economy.
The Boston Consulting Group
an executive in our survey. Another
claimed it is equally vital that the
senior team speak the local language:
When the business language of the
acquired company is diferent and
top managers do not converse in the
local language, it can make gaining
credibility and trust a big challenge.
Add value by transferring management
best practices. We decided to keep
the local management team because
the business is quite distinct from
what we have, but we also exposed
them to management best practices,
said a telecommunications executive.
And one of the most efective ways to
transfer best practices is to bring in
experienced managers from other
parts of the business.
In fact, transferring best-practice
management processes and deploy-
ing experienced management teams
are considered the top two ways to
add value to an acquisition in an
RDE. (See Exhibit 5.) However, this
approach ofen needs to be support-
ed by a broad-based talent-develop-
ment plan for local employees,
including clear career paths. We had
to educate and retrain staf before we
could implement new processes,
said a fnancial services provider.
Keep an open mind. Learning is a two-
way street: not only does the target
learn from the acquirer, but the
acquirer learns from the target.
The key to successful acquisitions is
having an open mind and being able
to learn from the acquired compa-
nies, said one M&A veteran. In our
case, we learned business practices
that we could export to other
developing markets and, in some
instances, even to our developed
markets.
An executive with a leading natural-
resources company noted, There are
no universal best practices. We
learned the hard way that some of
the targets business processes
worked much better in the local
market than our standard operating
procedures.
Remembering that Growth Is the
Biggest Driver of Superior Share-
holder Returns. The vast majority
of the companies in our sample
acquired businesses in RDEs to
increase their growth rates. Seventy
percent of the executives said their
companies went down this road to
gain access to a new geographic
market, whereas 30 percent stated
that their companys goal was either
to increase market share or to gain
access to a new product market or
segment.
Other reasons included expanding
distribution (20 percent of responses)
and securing distribution (10 per-
cent). None of the executives said
that their companys aim was to
reduce costs or improve capital
efciency.
However, many acquirers that enter
RDEs are ofen stuck in a developed
world mindset of optimizing cost
synergies and ignore valuable oppor-
tunities to fuel revenue growththe
primary driver of long-term total
shareholder returns in top-quartile
companies. Its essential that the
postdeal merger team is not flled
with people who have a cost-reduc-
tion mindset, advised an executive
Best-practice
management processes
What are the most important ways in which
acquirers add value to acquisitions in RDEs?
Brand equity
Access to a broader market
Percentage of responses
0 50
100
83
61
33
22
11
Experienced
management teams
Best-practice
business model
Financial stability
Other
22
22
Exhibit 5. Best-Practice Management Processes and
Experienced Management Teams Are the Top Two
Advantages that Acquirers Deliver to Acquisitions in RDEs
Source: BCG survey.
Note: The numbers total more than 100 percent because the participants in our survey were
invited to provide multiple responses to this question.
Eyes Wide Open
from a leading natural-resources
company.
Pivotal Questions for CEOs
There is no doubt that acquisitions in
RDEs ofer signifcant opportunities
to increase shareholder returns,
provided the deals make strategic
sense. But CEOs need to enter these
markets with their eyes wide open to
the risks, supported by a well-
formulated plan to deal with the
challenges. And this involves asking
some pivotal questions.
How well do you know the markets
and main players in your chosen
RDEs? Can you quantify the size
and potential of the markets with
accuracy and certainty? Do you
have sufcient insight into the
major players? If not, how do
you intend to plug these informa-
tion gaps?

Is your senior management fully

committed to investing in RDEs? Do
they understand the full risks and
opportunities? Have they spent
quality time visiting the markets
and meeting the major players?
Do you have experienced deal teams
on the ground scouting for opportu-
nities and developing relationships
with the main players and intermedi-
aries? Have the teams done deals
in RDEs before? Do they have
established relationships and
networks of contacts in your target
RDEs? Do they spend enough time
in these markets to gain sufcient
insights? And do they have
adequate resources to develop the
necessary information about the
markets and prospective targets?
Are you ready to act now and move
into your chosen RDEs? Do you have
a list of potential targets and their

key stakeholders? Do you under-

stand the regulatory environment
and have a strategy to sway it in
your favor if it doesnt suit your
objectives? How well do you know
the regulators, including their
concerns and aspirations? Also, do
you know how your investor base
will react to a likely play in a
particular RDE?
Armed with the answers to these
questions, CEOs will be much better
prepared to assess and manage the
risks of acquisitions in RDEsand to
fully seize the opportunity.
0 The Boston Consulting Group
About the Authors
Andrew Clark is a partner and
managing director in the Singapore
ofce of The Boston Consulting
Group. You may contact him by
e-mail at clark.andrew@bcg.com.
Dinesh Khanna is a principal in
the frms Singapore ofce. You
may contact him by e-mail at
khanna.dinesh@bcg.com.
Yulius Yulius is a consultant in
BCGs Jakarta ofce. You may
contact him by e-mail at
yulius.yulius@bcg.com.

Acknowledgments
The authors would like to thank the
following members of BCGs edito-
rial and production teams: Barry
Adler, Katherine Andrews, Gary
Callahan, Keith Conlon, Angela
DiBattista, and Pamela Gilfond.
For Further Contact
For inquiries about the Corporate
Development practice, which
sponsored this report, please contact
the practices global leader:
Daniel Stelter
Senior Partner and Managing Director
BCG Berlin
stelter.daniel@bcg.com
For a complete list of BCG publications and information about how to obtain copies, please visit our Web site at
www.bcg.com/publications.
To receive future publications in electronic form about this topic or others, please visit our subscription Web site at
www.bcg.com/subscribe.
The Boston Consulting Group, Inc. 2007. All rights reserved.
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