Asia’s position as an engine of growth in the global economy is stronger than ever as it led the world out of the worst global recession in more than 50 years.
Despite a healthy 29% of businesses looking at M&A opportunities, Australasian respondents are less likely to acquire in the 0-6 month, 6-12 month and 1-2 year periods than the previous year.
This correlates with our view of the M&A market. Although transaction values rebounded strongly in 2010, volume remained relatively low. This indicates some smaller businesses still face challenging liquidity issues and also highlights the bigger players have been focused on more transformational deal activity.
Australasia: how likely are you to execute an acquisition?
Another reason for the dip is the growing gap between buyer and seller price expectation, with 60% of Australasian respondents saying it has increased in the current environment. The flow-on effect is the mounting concern around the shortage of quality deal opportunities which has also increased accordingly to 47%.
Internal challenges have also grown in significance. Board scrutiny, regulatory pressures and concerns over the uncertainty of valuations have increased the level of complexity in executing transactions.
Undertaking or seriously considering acquisitions over the next 12 months
And then there are emerging markets
Asia’s position as an engine of growth in the global economy is stronger than ever as it led the world out of the worst global recession in more than 50 years; it’s likely Australasian respondents are looking to our nearest neighbours in Asia for growth opportunities.
Australasia respondents were considerably more focused on acquisitions in emerging markets than our global counterparts (36% Australasia vs 26% Global), and from the previous year (36% April 2011 vs 26% October 2010).
Acquisitive sectors in the next six months include power and utilities, oil and gas and pharmaceuticals, all of which have opportunistic target prospects throughout Asia.
Australasia: which of the following do you think have increased?
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