Mergers and acquisitions, the effect of the global pandemic on M&A in North America and in Europe

The coronavirus crisis permeated every aspect of society, from politics to economics, from culture to personal relationships. In the financial sector, one of the most important consequences has been the collapse of Mergers & Acquisitions activities in Europe and the United States.


The world of mergers and acquisitions has always survived and recovered from previous economic crises, and as happened in the past, uncertainties in the markets have already contributed to delaying or interrupting acquisition plans.

This time, however, the situation is more complicated: the impact of the pandemic has not only been on the financial system in general, on the judgement of sellers and the willingness of buyers to close short-term deals. Other factors have influenced mergers and acquisitions. These include contractual terms, new due diligence issues that have arisen, the availability, pricing and time needed to obtain the necessary regulatory and other third-party authorisations for transactions.

The American crisis in the merger market

Global mergers and acquisitions have already plummeted following the coronavirus crisis and by the end of March 2020 had almost stopped completely. Mergers and acquisitions levels in the U.S. declined by more than 50% in the first quarter dropping to $ 253 billion compared to 2019, but most of those transactions were concluded or closed early in the quarter before the crisis spread all over the world.

Furthermore, the strategies of companies that are typically on the acquisition side have been redirected towards protecting their assets by abandoning longer-term objectives such as investments in growth through acquisitions. Similarly, private equity institutions have focused their efforts on strengthening or saving the companies in their portfolio, at the expense of newly traded assets.

An American law against Mergers & Acquisitions?

A proposed act was introduced in the United States Congress known as the Pandemic Anti-Monopoly Act, a law aimed at freezing the takeover of companies with over $ 100 million in revenue and financial institutions with over $ 100 million in market capitalisation for the duration of the crisis.

The proposed act is similar to the one introduced by the Republican Congressman David Cicilline, Chairman of the Subcommittee on Antitrust, Commercial and Administrative Law. The aim of the two measures is to block speculative transactions at a time when the ratings of many companies are dropping due to the economic repercussions of the health crisis.

The European market is also slowing down

The effects of the pandemic have also been felt in M&A in Europe where the sector appeared to be in a good state until the emergence of the crisis. In the first quarter of the year, 2,677 transactions were closed for a value of € 281.3 billion. This is progress, respectively 15.6% and 11% compared to the same period last year.

The spread of coronavirus in Europe has called prospects into question, bringing M&A transactions to practically zero. According to the statements of some advisors in the sector, about 90% of payment instructions have been put on hold.

European companies and the risk of foreign influences

To protect each country’s industrial heritage, EU countries are considering necessary countermeasures, including controls on foreign investment, strategic strengthening of holdings and nationalisation. The European Commission also urged member states to “use all options to protect critical European companies from foreign takeovers or influence that could undermine our security and public order”.

“As in any crisis, our industrial and corporate assets are under stress. The resilience of our industries, their ability to continue to meet the needs of EU citizens and to preserve strategic resources and technologies is fundamental”, stated a spokesperson for the European Commission.

The EU is concerned that foreign investors may attempt to acquire European companies “with the goal of taking control of key technologies, infrastructures or knowledge”. The EU is also concerned about strategic and delicate issues like security.

Healthcare remains stable and IT is growing

Healthcare has seen an increase in activity compared to the first quarter of last year, in line with what has been happening in recent years. Furthermore, the global pandemic is demonstrating how the sector can be a strategic asset against the recession so it is possible that M&A transactions in this context will continue to grow.

On the other hand, one sector that is experiencing a growth phase right now is Information Technology. IT companies specialising in service delivery and cybersecurity seem to be better able to defend themselves against the risks of a recession. On the one hand, citizens have reached a level of using IT infrastructures that has never been seen before, on the other, companies have an ever growing need to protect themselves from new technological risks and to be able to manage their business safely.

Evidence in the professional translation services market

During the entire time we were in lockdown, Intrawelt continued to work non-stop. In compliance with the measures in place to safeguard everyone’s health, the translation agency continued to manage a significant number of translation projects thanks to remote working.

During these difficult months we translated several financial statements and financial reports, we have worked on remote interpreting projects for business negotiations but we have seen, especially in recent weeks, a drop in the demand for the translation of financial documentation related to the closing of merger and acquisition agreements, in line with our analysis so far. We understand and share the concerns regarding the risk of weakening national industrial systems for the benefit of external speculation, our hope is that effective protection measures will be taken as soon as possible, for the good of the whole system and of the many companies involved, some of which we have the privilege of working with constantly.

References and further reading:

COVID-19’s Impact on Global M&A (Boston Consulting Group)

Coronavirus effects on private markets (Pitchbook)

The Impact Of The Coronavirus Crisis On Mergers And Acquisitions (Forbes)

Elizabeth Warren, Alexandria Ocasio-Cortez want mergers halted due to COVID-19 (Pitchbook)

EU helps protect weak firms from foreign takeovers (BBC News)

Vestager urges stakebuilding to block Chinese takeovers (FT)

Coronavirus: EU fears a rise in hostile takeovers (Deutsche Welle)

What is Localisation? Conquer foreign markets with the right words

For a company intending to open its own line abroad, one of the simplest things to do is to develop a complete communications strategy for the destination country. From the creation of a website or e-commerce space to online and offline marketing activities. In fact, today, internationalising a business involves, first and foremost, brand exporting through differentiated strategic communications strategies.

Opening localised social channels in the destination country, advertising campaigns, web sites and e-commerce portals, press releases, public events. These are all important initiatives in communicating the values of your brand and building a relationship with the target market. Sharing your identity, the ability to communicate your values and convey emotion are key objectives in forging lasting connections with different national markets.

These goals can only be attained with the right messages using the right linguistic registers.

What is Localisation?

LocalizationLocalisation is the process of adapting the content from an existing communication channel to be published in an external market. If, for example, an Italian company wants to sell its products in Germany, it will need to create a website with content adapted in the local language, open social channels in German or regularly publish German language content for the German market. The same goes for advertising, public events and all online or offline marketing activities.

While the term may seem to refer to the translation of content from a source language to a target language, the truth is that localisation is more than that. In fact, translation and localisation are often thought of as synonyms. However, localisation is a much more complex process than simply translating a text. Localisation also involves the general adaptation of the text, which in some cases is is limited to converting currency, time, units of measure and data formats. But very often, it requires a deep understanding of the culture of the target audience.

How important is localisation for a company that wants to sell on the global market?

According to Internet World Stats, of the more than 4 billion daily internet users, only 25% speak English, and more than half of all Google searches are performed in a language other than English. When we look deeper into user behaviour, we discover that, in every aspect, language affiliation is essential to the value of the product sold.

According to a European Commission survey (click here to download), 90% of Europeans never search in a language other than their own. Additionally, 42% won’t buy a product if the description is not in their own language.

Common Sense Advisory found that, at the global level, 72% of customers are more likely to buy a product or service if the information is in their own language, while 56% say that finding brand information in their own language is even more important than price.

Localisation is serious business

Let’s start with an example which is both funny and tragic (for the company).
A few months ago, the global brand Coca Cola launched a new marketing campaign in New Zealand. Wanting to use the Māori language to create a trademark channel to attract users in the local language, the company posted a slogan at the top of all its beverage vending machines.

coca colaIn an attempt to combine Māori and English slang, the slogan was “KIA ORA, MATE!”. In the Māori language, kia ora is like saying “hello” in English, and everything is fine to that point. The problem was the choice to add “mate” (English slang for friend), in an attempt to create a friendly and colloquial connection with consumers. With this bit of communications artistry, the local meaning of “mate”, which is not quite the same as in English, clearly escaped them. Actually…

In Māori, mate means death. So, essentially, the greeting at the top of Coca Cola’s vending machines in New Zealand was, “Hello, Death!”

Why use a translation agency for localisation?

The example serves to clarify an important point. Using a language or register different from your own requires more than just the company’s marketing department. The use of a specific term or phrase, the meaning a word can have in one context versus another are issues that require a high level of professionalism to get right.

Localization services

Only professional linguists capable of adapting the source language not only to the vocabulary, but also to the culture, the usage and the customs of the target country can offer this type of professionalism.

Therefore, it is good policy to use a professional translation agency for all your localisation needs. Established and organised language service providers, like Intrawelt, who deal with localisation do not use general translators to provide this service.

Translation and localisation agencies hire professional linguists, specialised in marketing an communications, who know the language, usage and customs of the target market perfectly and who can even work from an SEO perspective. With highly specialised employees, translation agencies like Intrawelt are able to provide a true strategic consulting service for marketing and communications, even before translation. From choosing product names to which slogan to use, from linguistic formulations to typical local expressions, through to identifying content which would be awkward or even unsuitable in the

target country, professional, native speaker linguists are a valuable resource in the pursuit of your sales goals.

To receive further information about our localisation services, contact us for a quote.

European Commission

Sharing European health data: the pros and cons

A European electronic system for managing EU citizens’ health data: this is the initiative launched by the European Commission in the last few days. The recommendation of 6 February contains the guidelines for building a filing system which will allow EU citizens to travel within the European Union and have access to their health information, at any time, and from any facility.

Currently, European citizens’ access to electronic clinical documentation within the EU varies considerably from one EU member state to another. The exchange agreements are in fact limited to the preferences of individual Member States. For example, as of 21 January 2019 Finnish citizens are able to purchase medicines in Estonia with an electronic prescription and doctors in Luxembourg will soon be able to access the health profiles of Czech patients.

The European Commission’s aim is not only to extend the data access network to include all EU Member States, but also to determine the sort of health data that should be accessible.

CLINICAL RECORDS AND DIAGNOSES

The infographic published by the European Commission considers some of the concrete incentives for the integrated access to health data.

European health data

Imagine a French tourist who has been in an accident in a square in Berlin. Once he has made it to the hospital, the doctors will have direct access to his medical history, intolerance to certain anaesthetic medicines or allergies to medical materials. As such, medical professionals will have access to all the information necessary to safeguard the patient’s health.

The same can be said for the examination of laboratory analyses, hospital discharge letters and diagnostic imaging and reports.

In addition to Finland, Estonia, Luxembourg and the Czech Republic, by the end of 2021 a further 18 countries should start the process of sharing health profiles and electronic prescription services.

With the support of the Connecting Europe Facility (CEF) telecommunications programme, numerous Member States are already working on the digital e-health services infrastructure within the online healthcare network.

COMMUNICATION AND TRANSLATION OF HEALTH DATA

Conceived by the European Commission, this initiative could represent an important step forward for citizens in terms of health protection policies, despite the various complexities which are still under development. Considering the initiative from the point of view of translation agencies such as Intrawelt, a consolidated partner of the European Commission for translation projects, the main question concerns the management of health data in the various language combinations of the different countries involved.

Given that the medical records relate to citizens from all EU Member States, they will be written in the language of the country where the citizen underwent treatment or analysis. The challenge of aligning the reports, analyses and all medical documentation with the languages of all other EU countries will require an editing strategy that can guarantee fast and efficient translations in all the various language combinations. As translations which involve sensitive data for the health of citizens, medical and scientific translations require very high quality standards, as well as certified translators. These standards influence not only the service quality but also the procedures for safeguarding health data and information. We manage medical-scientific translation projects in compliance with the EU directives in EU Regulation no. 2016/679 (GDPR) on the processing of information and the safeguarding of infrastructures. We use software technologies to ensure encryption of data and the secure management and archiving of documentation.

ONE POSSIBLE SOLUTION

We have been collaborating with the European Commission for some time and we are certain that the best solutions will be identified in order to create a perfectly efficient and coordinated system. However, we’d like to use this article to offer one possible solution.

Using the various authoring tools available, texts of any nature (technical, scientific, financial, etc.) can be written in standardised form, working with a terminological memory which offers the writer the most effective term based on previous experiences with the editorial processes. Therefore a German doctor, for example, will be able to write a report following terminological suggestions that will make automatic translation of the text more effective when a French doctor accesses the report.

For more information on our content management and medical-scientific translation services, please contact us via the button below. In the meantime, we’ll follow the developments of the European initiative with interest.

Spine-chilling translations

On Halloween 2018 we’ve decided to pay homage to the horrors of the translation world by showing you 10 monstrosities we’ve seen online.
But to find out how quality translations are done, click on the pumpkin!

 

1. #JeSuisFlamingo

 

2. Censored

 

3. Weeding time

translation fail

4. Need a technical translation?

 

 

5. Rape, more rape, a lot of rape?

True, it’s not an easy one to explain abroad, so maybe it needs some context. The “cima di rapa” is a vegetable typically grown in Southern Italy. “Rape” is only its plural, nothing violent or dangerous. “Orecchiette con le cime di rape” are a typical dish from Apulia. So nothing to do with mountains. But then again, a mountain of orecchiette wouldn’t be too bad.

halloweeen

 

6. Google translate strikes again!

 

7. Self-citations

 

8. Manicure for Edward (Scissorshand)

 

9. Yum!

 

10. R.I.P. Paul

Blockchain

Not only Fintech: Blockchain for translation services

Blockchain and Bitcoin: two of the trend topics for 2018. The hashtag #blockchain on Twitter is often one of the top daily trends And, even if everyone is talking about it, it is still not a commonly used technology.

blockchain technology

We think it is very important to clarify the difference between Blockchain and Bitcoin. Even if these two words are often closely associated, they are not the same thing. Blockchain is a technology used to exchange data and information in a digital and encrypted format. Bitcoin is a currency (one of many) created using Blockchain technology, which is why it is called cryptocurrency.

What is Blockchain?

The Blockchain system is not a technology to be used exclusively for financial and monetary transactions, essentially it enables encrypted transactions of any type of data, such as word documents, contracts, images and videos.

There are profound differences between this technology and the traditional exchange of data peer-to-peer via email, server or client. Blockchain is an open source system, i.e. an open system composed of more subjects that regulate the transactions, substituting the traditional intermediaries like banks in the case of financial operations or legal institutions in the case of contractual obligations.

How the transactions work

The mechanism for the transfer of information within the Blockchain system is explained perfectly in the article Explain Bitcoin like I’m five.
Every single transaction is verified, authorised, and registered in a digital “master file”by each member of the chain (so called “nodes” or “miners”). The transactions are provided with a public encryption key accessible to all members along with a private encryption key that, even if the community has access to the transaction (contract, agreement or monetary exchange) and its validation, guarantees the privacy of the contracting parties.

translations fintech

The note is made up of a series of encryption keys and identification codes of each single transaction. All files and transactions are linked together by identification codes that allow the entire chain to be reconstructed by keeping the blocks connected to it.

The meaning of the chain is explained below: each transaction is linked to another and as such you can access, at any time, completed documents and transaction, without being able to modify or change them. Modifications are subject to the authorisation of the whole community, and as such the data is protected from possible hacking via one of the nodes.

blockchain.translations

The Blockchain technology offers various advantages including; the absence of institutional intermediaries to control relationships, the speed of the transactions, the traceability of the documents and the certainty of their authorship.

Blockchain and translation projects

The theme of the relationship between Blockchain and translation activities starts to be discussed in the debate on new technologies in the field of linguistic services. The impact of introducing a similar new technology into the sector of professional translation could bring about historic changes.

Copyright. As mentioned before, the introduction of an open technology, both participatory and controlled, can put at end to, once and for all, the subject of the authorship of the translation.

We have previously dealt with the problem of the relationship between the translator and the legal ownership of the translated text, mainly in the editorial field. The open sharing of documents and the absolute traceability of information guarantee the digital identity of the source and the recognition of the translator’s work.

Direct payments Through avoiding the intermediaries of credit institutions, payments are managed directly by clients and suppliers with the supervision of the collective that makes up the chain.

Feedback. In the presence of a collective, and of a system to control information, it is possible to trace all feedback left by contracting parties. In this way, opinions on the quality and cost of the service are extremely reliable and can be subject to verification at any time through accessing the documents.

State of the art in translation

Despite the various advantages of block technology, many people are still reluctant to adopt Blockchain transaction systems. Banks have been exhibiting their doubts on the security of the system and the risk of fraud, with some financial institutions conducting surveys on blockchain and cryptocurrency. Consumers, for their part, are still trying to understand the system and its implications, which undoubtedly are not easily intuitive.

Therefore, it is unlikely that there will be a mass conversion to Blockchain technology, although in the case of cryptocurrency and smart contracts, significant progress has been made.

Intrawelt continues to adopt data and information protection methodology in line with the international ISO 9001 standard. We are equipped with antivirus systems, secure servers, backup systems and cloud technology from the latest generation which enable us to guarantee maximum protection.

Thanks to our project management system, eGetrad, we can also provide our customers with a web-based interface where they can easily communicate with our project managers at any time. Our eGetrad portal allow users to request quotations, place orders, attach necessary documentation, analyse service statistics, receive and view invoices and payments, all while maintaining maximum security.

Follow our social media pages Facebook, LinkedIn, Twitter and Instagram to see our updates or contact us using the following form to request information on our services.

Energy innovation

Germany, world leader in energy innovation

Germany is the number one European country in renewable energy storage capacity with 113.06 gigawatts. According to the updated 2017 rankings, Germany is fourth in the world, after China, the US and Brazil (Source: IRENA – International Renewable Energy Agency).

energy-innovation-renewable-energy-ranking

Leading countries in installed renewable energy capacity worldwide in 2017 (in gigawatts) – Source: IRENA 2017, Statista 2018 graphic representation.

For over a decade, Germany has demonstrated constancy in pursuing energy conversion policies, which contributes greatly to their success in utilising renewable energy. After abandoning nuclear energy in 2003, the country began an important project to invest in renewable and sustainable energy resources, particularly solar and wind, with excellent results.

The future of sustainability, hydrogen trains

The path towards achieving an energy self-sufficient and sustainable country marks every new historical moment for Germany. Eisenbahn-Bundesamt [The German Federal Railway Authority] has officially given the green light to hydrogen-fuelled trains made by the company Alstom.

Coradia iLint is its name, and it is the first passenger train in the world to use hydrogen fuel cells to produce electricity for traction. It was specially designed for non-electrified lines.

The first trains will start running at the end of the summer. Meanwhile, in November, Alstom signed a contract with the Lower Saxony Transport Authority (LNVG) to deliver a total of 14 hydrogen-fuelled trains.

The economic power of the energy and environmental sector

Environment and sustainability are the key words present in most EU and global policies, and they also represent a highly profitable piece of the market.

Investing in energy innovation guarantees a high growth potential, especially considering the long road still ahead for replacing traditional energy sources, such as coal and petroleum, with modern energy technologies, like solar, wind, marine and hydrogen.

As a global provider of linguistic services, for nearly 30 years, Intrawelt has collaborated with some of the biggest leaders in the integration of the European electricity market and the use of environmentally friendly sources, as well as many innovation technology companies. This allows us to experience first hand the economic growth of our customers and the industry in general.

Daily, we take on translation projects that our clients need to reach ever-larger market segments: website localisation for foreign markets, business interpretation for building relationships with global partners, multilingual brochures and catalogues and translation of technical documents with increasingly sophisticated requirements. We can discretely and competently manage price-sensitive multilingual documents, such as press releases and legal and financial translations.

Follow us on Facebook, LinkedIn, Twitter and Instagram to stay up-to-date with our contributions, or contact us here to receive information about our services.

Georgina Arcienegas with sign

Financial services and Hispanic Americans: an untapped market

What is the first thing that comes to mind when we think about Hispanic Americans? Illegal immigration, a wall along the Mexican border and images of poverty and repression are often at the forefront. Is this really an accurate picture? In reality, the situation is far, far more complex.

In the collective imagination, Hispanic Americans are viewed from an economic perspective as relatively poor with low life expectations and this is partly why they have never been a significant target for the financial-services market.

Financial opportunity in the Hispanic American market

Hispanic Americans currently represent 17% of the US population, many voted for Trump and the group shows greatly reduced unemployment rates. Whilst these facts alone may appear surprising, more detailed analysis reveals an even more interesting picture.

According to a 2017 study by Univision Communications and Harris Poll, entitled Banking on Hispanics for Growth, out of 59 million Hispanic Americans living in the US, 16 million are between the age of 18 and 34 years, with an average age of just 29. Considering a life expectancy of 82 years, the Hispanic American community boasts an average 53-year window of active eligibility for the purchase of financial products, against 43 years for non-Hispanic citizens.

This figure assumes even greater relevance considering that today there are still relatively few Hispanic Americans using financial goods and products, despite the fact that 80% of them (source: Simmons 2017) declare that they are interested in making purchases, with a peak of 84% among those who speak mainly or exclusively Spanish.

Hispanic speakers

Source Univision and Harris Poll

The differing conceptions regarding prosperity amongst Hispanic Americans and other citizens is a clear sign of the times and of the transformations which US society is undergoing. For Hispanic Americans, prosperity is a synonym of growth and improved living conditions compared to previous generations, and achievement of objectives. For non-Hispanic Americans, on the other hand, prosperity is understood as comfort, economic stability and the possibility to live a stress-free daily life.

In American society, certain populations, such as the Hispanic population, are showing themselves to be more active than others in pursuit of personal and professional goals aimed at improving their quality of life. It is this generational force which makes Hispanic Americans a target market with potential to be explored, particularly with regard to financial services.

Finance, identity and effective communication

Like Mediterranean populations, Hispanic Americans place great importance on their identity and social institutions: language, family and relationships. The study conducted by Univision and Harris Poll revealed that according to the perception of the Hispanic population, 51% of them felt poorly valued by the financial-services market, while 69% maintained that the products on offer did not meet their needs and 22% felt extremely unsatisfied.

Source: Univision and Harris Poll

 

One finding was particularly surprising: only 29% of Hispanic Americans stated that taxes and interest rates on services were a primary obstacle (against 44% of non-Hispanics). Finding the key to gaining their trust as clients could offer huge rewards.

Engagement with their identity: the role of translation services

To win over a population, you must win over their hearts and their identity. Communication is the best way to do this, and words and language are the most effective tools.
88% of Hispanic Americans give complete loyalty to those companies which demonstrate themselves as an active partner and invest in supporting the community.

The winning solution is to trust in a translation and interpreting services company such as Intrawelt that has been working in the sector of financial translations for over thirty years offering multilingual communication services, and translation of financial statements and marketing campaigns in over 30 different languages.
Not only translation but also interpreting. The key strategy is to have an interpreter specialised in financial services supporting business liaisons and dialogue with local communities; a kind of right-hand man with detailed knowledge of customs and cultural norms who also possesses financial-services know-how.

Establishing itself as a trusted top player in an identity-focused market such as that of Hispanic Americans requires a high degree of knowledge and sharing of customs, social norms and language. It is fundamental to know how to speak to stakeholders, communities, banks and local companies.
This is why Intrawelt exclusively uses native-speaker professionals specialised in a variety of different sectors including financial, medical/scientific, legal, technical and marketing.

There is an untapped market in the land of the stars and stripes. The race to win over the hearts of Hispanic Americans has begun and today our services can make the difference in the financial marketplace.

For further information, write to us at info@intrawelt.com .