There is no let-up in executives’ appetite for corporate takeovers despite volatility in the stock market and mounting concerns over the global economy, particularly China.
The Associated Press reports that a survey released this morning by consulting firm EY shows the recent wave of mergers and acquisitions, or M&A, is set to continue over the coming year. It found that 59% of global companies are planning to secure at least one deal over the next 12 months, partly as a means of cushioning waning global growth as China’s economy slows.
The figure for October is up from 56% in April and 40% at the same time last year. It represents the highest interest in acquisitions that EY’s survey of corporate deal-making has found in its six-year history. The low point was at the start, when only 24% of companies signaled the intention to make a takeover.
“With modest increases in global GDP, organic growth alone is not enough for companies to expand and reshape at the pace they need,” says Pip McCrostie, EY’s global head of transactions.
“The search for growth is lifting deal-making to record highs, and executives are focusing on M&A to secure innovation, competitive advantage and market share for the foreseeable future,” she adds.
EY’s survey was based on surveys of more than 1,600 executives in 53 countries.
M&A activity has really gathered pace this year with deal values, according to EY, already up 35% on 2014 and more megadeals—those valued above $10 billion—in 2015 than in any previous year of the survey’s history.
EY said the boundaries between industries likely will blur, with 48% of executives planning acquisitions in a different sector as new technology impacts almost everything along the business chain. The manufacturing and retail sectors are set for the most such activity.
And companies are increasingly ready to make deals outside their home country. The firm said 70% of respondents are looking to do so, with the 19-country eurozone set to see a rise in deals amid hopes that the debt crisis that has gripped the region has abated following the latest bailout of Greece.
The Associated Press has the full story.
