In today’s global economy, an established business might consider expanding its revenue base by acquiring or merging with a company in an emerging market. These markets — for example, in Brazil, China, India, Mexico, South Africa and Turkey — provide tremendous growth potential. But they also come with significant risks. So, obtaining reliable business valuations is an essential part of due diligence in emerging-market M&As. Capturing opportunities and risks A nuanced valuation approach is required for companies in emerging markets, which generally are countries experiencing rapid economic growth and increasing industrialization. These companies face challenges related to market inefficiencies and operational risks that typically aren’t present in countries with more advanced economies. Other differences can also significantly affect the value of an emerging-market company. Specifically, valuation pros...