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October 15, 2010

Faegre & Benson Unveils International Business Trends Report

A survey by international law firm Faegre & Benson LLP suggests many leading U.S. multinational companies are focused on overseas investment and expansion as a means of driving growth. More than half of survey respondents view China as the most promising country in which to grow sales and add production capacity over the next three years.

Drawing on information provided by nearly 400 C-level executives and general counsel, Faegre & Benson compiled the International Business Trends 2010 report. The report looks at a variety of trends, including markets in which these companies have operations or plan to establish operations, recent transaction activity and outlook, challenges to doing business across borders, and international revenue expectations.

Survey respondents represent global companies such as Target, 3M, General Mills, EcoLab, Best Buy, Boston Scientific, International Dairy Queen, and Cargill, as well as smaller public and private enterprises.

Other notable findings in the report include:

  • More than 70 percent of survey respondents consider international investment and expansion to be a "primary" or "significant" focus of their company's long-term growth strategy.
  • Nearly half (46 percent) of companies participating in the survey derive 25 percent or more of their revenue from outside the U.S.
  • Fifty two percent of respondents expect to grow non-U.S. revenue by 10 percent to 30 percent over the next three years, and 22 percent of respondents expect to grow non-U.S. revenue by more than 30 percent.
  • Among respondents from large companies (revenues of more than $1 billion per year), 54 percent anticipate completing four or more acquisitions outside the U.S. over the next three years.
  • A majority of respondents are looking at joint ventures with non-U.S. companies as a means of expansion—with 53  percent of companies anticipating one to three such transactions, and 16 percent of companies anticipating four or more—over the next three years.
  • More than half (54 percent) of respondents indicate that "difficulty finding suitable targets" is their company's most significant challenge in completing international acquisitions.
  • Fifty nine percent of respondents plan to expand manufacturing capacity outside of the U.S. over the next three years. Reasons include facilitating sales in a key international market (56 percent), lowering the cost of production (23 percent), establishing technical expertise in the region (11 percent), or to accommodating a customer who requires local production (10 percent).

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