Asian cross-border acquisitions are expected to rise further over the next 18 months, a new survey by Mercer and Kroll reveals.

In a survey titled Asia On The Buy Side: The Key To Success, Greater China emerged as the most popular target market for future cross-border M&A activity in Asia, with 49 per cent of respondents noting its likelihood. Southeast Asia, India and Australasia followed with 27 per cent, 22 per cent, and 15 per cent respectively.

In contrast, less than 10 per cent of respondents said M&A would move to Africa (6 per cent), the Middle East (6 per cent), South America (5 per cent) and Western Europe (3 per cent). Japan turned out to be the least popular market, with only 1 per cent.

"In addition to confirming key trends related to the increasing number of cross-border transactions, the report highlights a growing understanding, on the part of buyers, of the degree of complexity associated with talent retention, compensation, orginisational culture and other employee related matters," said Len Gray, the Asia Pacific business leader for Mercer's Mergers and Acquisition consulting business.

Expectations are generally positive with regard to Asian cross-border dealmaking, with 83 per cent forecasting it to increase over the next 18 months. The most positive responses came from Hong Kong-based respondents, followed by Koreans. It was also found that most mainland Chinese respondents preferred to target Hong Kong, Taiwan and Macau, while those from India are looking to the Americas. Most Australian firms say they would target North America.

The survey was conducted from March to April 2010 on senior executives of Asian corporations and private equity firms that had undertaken a cross-border acquisition over the past three years.