Global interest in M&A deals revives

An increasing number of privately held businesses (PHBs) around the world are planning to grow through mergers and acquisitions, according to the Grant Thornton International Business Report released yesterday.

The US business consultancy’s global study at the end of last year found the number of respondents expecting to make an acquisition in the next three years rising to 34 per cent from 26 per cent last year.

However, in Viet Nam, only 17 per cent of PHBs plan to grow through acquisitions in the next three years, down from 19 per cent last year.

Matthew Lourey, Advisory Services Director of Grant Thornton Vietnam, explains the global trend: “At a time of improving economic and financing conditions, businesses are again looking towards acquisitions as a means of growing revenues as they shift their mindset from survival to strategic growth.”

PHBs in the BRIC economies (Brazil, Russia, India and China) are among those leading the way with 44 per cent of respondents considering an acquisition, compared to 27 per cent in 2010.

Driven by the desire to access new markets and acquire new technology or established brands, 45 per cent of businesses in mainland China plan to grow through acquisition, an increase of 19 per cent over 2010.

Likewise, Indian companies are now back on the acquisition trail, with 40 per cent of them planning an acquisition in the next three years and expecting their deals to be cross-border.

An increase in planned M&A activity is also seen in other major regions. For example, in North America, 41 per cent of PHBs are planning acquisitions.

“After two slow years, with an improving economy and easing credit market, there is considerable pent-up demand for acquisitions,” Ken Atkinson, managing partner of Grant Thornton Viet Nam, explained.

The Grant Thornton International Business Report is a survey of medium to large privately held businesses that researched the opinions of more than 5,700 businesses in the last quarter and 11,000 on an annual basis.

The respondents are chief executive officers, managing directors, chairpersons, or other senior executives in 39 economies, primarily in five areas: 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 industries. — VNS

Tags: M&A deals