Deals in growth markets remain incredibly challenging. Our research suggests that over 50% of deals that enter detailed external due diligence in growth markets fail to complete. This is materially higher than in developed markets.
For this study, PwC carried out an assessment of over 200 deals, and interviewed 20 senior executives who have bought businesses in growth markets to understand the root causes of problems , and how they overcame the challenges encountered.
While there are plenty of examples of successful deals in growth markets, the executives we interviewed acknowledged that deals in growth markets are inherently riskier. There is a much bigger deviation, or range, of potential outcomes. If things go well, investors stand to make a lot of money. But if things go badly, investors can lose big.