MAST Advisors | Why U.S. Acquisitions Should Be a Core Growth Lever for European Companies

CROSS BORDER ACQUISIITONS

EUROPEAN COMPANIES INVESTING IN THE UNITED STATES

Why U.S. Acquisitions Should Be a Core Growth Lever for European Companies

European capital has flowed into the United States for more than three centuries, and the U.S. remains the single most important geography for outbound European foreign direct investment, accounting for approximately 40% of all European FDI stock globally. Within that investment, acquisitions—not greenfield builds—have emerged as the dominant entry and expansion mechanism, particularly for companies seeking speed, scale, and local market credibility.

The United States is not an “optional” growth market reserved for a subset of global champions. It is the defining arena for scale, relevance, and long-term value creation across many industries.

This places a new responsibility on European leadership teams and boards: U.S. acquisition strategy must be treated as a core element of corporate strategy, not as a tactical or opportunistic initiative.

Success in the United States rarely comes from a single transformative transaction. It is more often the result of a disciplined, multi-step acquisition strategy that treats U.S. expansion as a long-term strategic priority rather than a short-term experiment.

This article is intended for European companies that have yet to establish a meaningful U.S. presence, or whose footprint is modest relative to their global ambitions. It outlines why the U.S. remains uniquely positioned as a source of growth through acquisition and what considerations should be addressed for implementation of an acquisition strategy.

Important rationales for undertaking a strategic acquisition campaign in the United States include:

1. The U.S. Is the World’s Largest and Most Profitable End Market

The U.S. economy represents approximately 25% of global GDP and is the single largest and most profitable market globally for consumer goods, commercial services, industrial products, and technology solutions.

For European companies operating in smaller, slower-growth or more mature domestic markets, U.S. exposure often represents the most direct path to structural growth acceleration. Acquisitions allow companies to access this growth immediately, rather than waiting years for organic market entry to gain traction.

2. Depth and Breadth of Acquisition Targets

No other country offers the sheer number, diversity, and quality of acquisition targets available in the United States.

The U.S. market is defined by a vast population of privately held, founder-owned, and sponsor-backed middle market companies. For virtually any European acquiror, the U.S. offers orders of magnitude more viable targets than any single European country or emerging market.

3. Immediate Access to Experienced U.S. Leadership and Operating Talent

Perhaps the most underestimated benefit of U.S. acquisitions is human capital (people). Acquisitions allow an acquiror to buy not just revenue, but organizational competence, including established U.S. leadership teams who already understand:

• Local customer expectations
• Sales and marketing dynamics
• Regulatory and compliance requirements
• Operating norms and decision-making cadence

Rather than exporting European management models wholesale, acquirors can leverage local leadership while selectively integrating global best practices. This hybrid approach consistently outperforms “greenfield transplant” strategies.

4. Labor Flexibility

Relative to Europe, the United States offers a significantly more flexible labor environment, which has direct strategic implications for acquirors.

The U.S. labor market allows for:

• Faster hiring and scaling
• Faster and more efficient restructuring
• Strong alignment between performance and reward

5. Deep, Liquid, and Sophisticated Capital Markets

Finally, the United States offers unparalleled access to capital in support of acquisition strategies, including a deep and sophisticated private debt market that can provide flexible structures specifically tailored to growth and integration strategies.

For European acquirors, this means U.S. acquisitions can often be financed locally, matching assets and liabilities while preserving balance sheet flexibility at the parent level.

Notable entities that have grown significantly due to persistent, organized, multiyear U.S. strategic acquisition efforts include:

• Publicis Group S.A.: A French public company providing marketing, communications, and digital business transformation services.  It achieved 2025 revenue of over $20B with U.S. subsidiaries providing $10.5B: over 50% of the total.
• Spirax Group PLC: A UK Public company providing thermal energy and fluid technology solutions. The company had 2024 revenue of $2.1B of which 27%, or $570M was derived from North America.  Further, 42% of Spirax’s $2.1B in assets are located in North America.
• Fresnius Medical Care AG: A German public company that provides dialysis and related services for individuals with renal diseases. 2025 revenue reached $20B.  S. revenue comprised over $14B of the total, or +70%.

European companies implementing a U.S. investment program should note several key market characteristics:

• 1. Business culture has evolved through fierce competition with norms that may differ from those of some European acquirors. These may include faster decision making, a greater bias towards action, a higher tolerance for risk and a “fix it as we go” mentality.  Attempting to “fix” such behaviors may weaken the competitiveness of an acquiree and alienate talented management teams.
• 2. Expansion Works Best as a Repeatable System, not a Single Transaction. A defining characteristic of successful European acquirors in the U.S. is that growth is treated as a process, not an event. Credibility is built over time and begins locally. The first acquisition only marks the beginning of establishing this credibility – it doesn’t “solve” for the U.S. market.
• 3.Autonomy is not cultural sensitivity; it is commercial necessity. Post‑acquisition challenges are often described as “cultural.” Public company disclosures suggest the more accurate diagnosis is governance and decision rights. For U.S. markets—where pricing decisions, sales incentives, and product positioning evolve rapidly and in ways that differ from the experience of a European parent company—this autonomy is not a matter of style. It is a prerequisite for competitive relevance.
• 4.Same business, different economics is a common and costly surprise. European distribution companies expanding in the U.S. may find differences in working‑capital intensity, customer ordering behavior, pricing cadence, and sales‑force cost structures in the U.S. compared with Europe. This does not diminish the attractiveness of the U.S. market; it does indicate the need to appreciate the value of U.S.-specific commercial expertise embodied in a strong local executive team.

Preparing For Implementation

Crafting a U.S. strategic acquisition program requires time, effort and investment.  Initially, commissioning a market study to gain a deep understanding of the relevant market segments and sub-segments is crucial.

Also critical is the retention of advisors expert in the commercial, legal and financial landscape of the U.S.  Many European companies have accounting and legal firms with either a U.S. presence or partners in the U.S., but engaging an investment banking advisor is also critical.  An investment banker functions as an outsourced corporate development staff, helping to create an acquisition strategy based on an understanding of the client’s competitive strengths, risk tolerance, cultural norms and commercial goals.

Thorough exploration of all acquisition opportunities in the vast U.S. market can be a daunting proposition. Potential acquirors may not initially appreciate the sheer number of potential targets or the time required to properly vet them. The lack of publicly available information on privately-held companies poses an additional hurdle, one that an investment banking advisor can assist in overcoming.

An investment banking advisor should also have expertise in and connections to the U.S. private capital markets to ensure a robust examination of capital availability.  Many European companies (and even domestic U.S. companies) are unfamiliar with the scale and flexibility of financing options in the U.S., which in turn limits the acquiror’s scope of ambition.

Board checklist: 10 questions to answer before you sign the LOI

Here are some questions where European acquirors either create advantage or discover avoidable surprises. If management cannot answer these crisply in writing, it is too early to sign. The goal is not to eliminate risk, but to clarify the difference between the risks you choose and those taken by accident.

1. What structural advantage are we buying? If the thesis is “scale,” specify the mechanism: exclusive distribution, switching costs, regulatory barriers, IP, network effects, or a differentiated sales motion.
2. Are we buying a platform—or buying time? If this is a “beachhead” deal, what is the second move? If there is no credible next step, the first deal is often a stranded asset.
3. What is the integration perimeter? List what will be integrated in the first 180 days and what will remain independent for 12–24 months.
4. Who owns pricing and sales incentives post‑close? In the U.S., commercial velocity is a competitive weapon. If pricing and compensation approvals sit in Europe, expect lost momentum.
5. What is the working capital plan? Model working capital in a U.S. context: service levels, inventory expectations, customer payment behavior, and the cash cost of growth.
6. What is the regulatory story in two sentences? Regulatory and anti-trust enforcement can be highly political and varies by industry. For example, the U.S. Department of Justice required Danone to divest its Stonyfield Farms business to proceed with its acquisition of WhiteWave.
7. What is the retention and incentive plan for the U.S. leadership team? Define autonomy, investment budgets, and upside—not just retention bonuses.
8. What is the financing plan—and how does it affect execution focus? If refinancing or equity raises will consume management bandwidth, build that into the integration calendar.
9. What is the time‑to‑value, and what are the milestones? Define what “working” looks like at 6, 12, and 24 months (growth, margin, retention, cross‑sell).
10. What are the kill switches? If the thesis breaks—market structure, economics, or retention—what changes, and when? Decide before the fact.

Closing Thoughts

A U.S. acquisition strategy can be the fastest path to structural growth for a European company, but only if it is designed as an operating system, not a one‑off transaction. The U.S. rewards speed, clarity of decision rights, and repeatable execution. It punishes ambiguity, over‑integration, and vague “platform” logic.

If you can answer the checklist above with real detail—not slogans—you are already ahead of most cross‑border buyers. If you cannot, fix that before you sign: it is far cheaper to stress‑test a thesis than to unwind a deal.

 

Author:
• Wolfgang Tsoutsouris, Managing Director, MAST ADVISORS

 

Compliments of MAST Advisors – a Member of the EACCNY