9 May 2012
Businesses are increasingly looking overseas for mergers and acquisitions (M&A) according to research from the latest Grant Thornton International Business Report (IBR). The results from the 2012 report show that of those companies seeking to expand through acquisition in the next three years, 33% expect to do so through a cross-border transaction, a rise from 28% in 2010.
Furthermore, the IBR reveals that the proportion of businesses seeking to grow through M&A, be it overseas or within their own market, has risen steeply over the past two years from 26% in 2010 to 34% in 2012.
Mike Hughes, global service line leader for M&A said: “Despite the on-going global economic challenges, the results show that business appetite for M&A has improved markedly over the past 24 months.
“Naturally, domestic M&A remains high on the agendas of business leaders but the upswing in interest in overseas expansion is encouraging, and no doubt reflects the particular market conditions within individual regions globally.”
The IBR reveals some interesting regional variations. The regions most interested in making an acquisition in the next three years are North America (37%), UK & Ireland (36%) and the BRIC economies (35%). This compares to only 28% in mainland Europe and 25% in Asia Pacific and in particular companies in the troubled economies of Greece, Ireland and Spain where only 16% indicated an interest in M&A activity in the coming three years.
Mike Hughes, added: “Although the Eurozone is less optimistic about the growth prospects of their own economies a large proportion of businesses within Europe are actively seeking opportunities abroad and expanding into higher growth markets such as the BRIC economies.
“Following the financial crisis of 2008, the flow of economic power from ‘west’ to ‘east’ has undoubtedly sped up. It is therefore encouraging that enterprising corporates in mature markets appreciate that M&A remains a vital strategic tool to enable them to benefit from these trends.”
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Notes to editors
The Grant Thornton International Business Report (IBR) provides insight into the views and expectations of 12,000 businesses per year across 40 economies. This unique survey draws upon 20 years of trend data for most European participants and nine years for many non-European economies. For more information, please visit: www.internationalbusinessreport.com .
The research is carried out primarily by telephone interview lasting approximately 15 minutes with the exception of Japan (postal), Philippines and Armenia (face to face), mainland China and India (mixture of face-to-face and telephone) where cultural differences dictate a tailored approach.
Data collection is managed by Grant Thornton International's core research partner - Experian. Questionnaires are translated into local languages with each participating country
having the option to ask a small number of country specific questions in addition to the core questionnaire. Fieldwork is undertaken on a quarterly basis.
IBR is a survey of both listed and privately held businesses. The data for this release are drawn from interviews with 12,000 businesses across the globe conducted between January and December 2011.
The target respondents are chief executive officers, managing directors, chairmen or other senior executives (title dependent on what is most appropriate for the individual country) from 40 economies primarily across five sectors: manufacturing (25 per cent), services (25 per cent), retail (15 per cent) and construction (10 per cent) with the remaining 25 per cent spread across all sectors.