Currency risk is a concern for any international merger and acquisition activity. For instance, once the bidder has successfully won the acquisition, the exposure evolves from a transaction exposure to a contingent exposure.

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Currency risk remains a concern throughout the process, but once the bidder has successfully won the acquisition, the exposure typically evolves from a transaction exposure to a translation or economic exposure, not contingent exposure. Contingent exposure refers to potential future exposure based on uncertain events, whereas translation and economic exposures are more directly related to the actual management of ongoing foreign operations and assets/liabilities.

Currency Risk Is a Concern for Any International Merger and Acquisition