Joint venture intentions higher than M&A
When it comes to mergers and acquisitions (M&A), 63% of our respondents say they will pursue a deal in the next 12 months, much higher than the 46% globally who plan to pursue an acquisition. This fairly robust US number may in part reflect a recent easing in asset valuations and may also reflect pent-up demand. US deal volumes are down 16.5% through November from the same period a year earlier, while globally, nonfinancial companies have just under US$2 trillion in cash and short-term instruments on their balance sheets.¹ Private equity (PE) companies, which have slowed their deal pace in recent months, are even more likely to pursue an acquisition, with 69% of PE portfolio company CEOs saying they would pursue M&A.
Across US sectors, 68% of financial services, 63% of consumer products and retail, 61% of advanced manufacturing and mobility (AM&M) and 58% of technology, media and telecoms (TMT) CEOs plan to pursue M&A. Still, with regulatory pressure mounting against megadeals in both the US and Europe, M&A in 2023 may be more targeted than transformative.
In fact, the more telling survey result is the considerably larger percentage of US CEOs pursuing joint ventures or strategic alliances (73%) — arguably the less risky option. The TMT sector is among the leaders in that measure (71%) after lagging in M&A intention. Even divestment plans at 44% — a notably high percentage — suggest that many companies will sooner right‑size or restructure rather than bulk up. AM&M leads in terms of divestment plans at 48%.
Overall, a remarkable 97% tell us they are considering restructuring opportunities, including identifying underperforming business units for improvement or divestment. If 2023 turns out as many expect, CEOs will have ample opportunity to get their houses in order.