EY’s latest Australasian Capital Confidence Barometer found that 63 per cent of Australian executives intended to pursue deals in the next 12 months, compared to 56 per cent globally.
The global survey of more than 2,650 senior executives across 43 countries, including 121 in Australia and New Zealand, also found that 72 per cent of Australian executives felt that the global economy was improving, more than double from the last survey, while the percentage who felt positive about their own local economies tripled from 21 per cent to 62 per cent.
EY Oceania Transaction Advisory Services leader David Larocca said the record intention to pursue mergers and acquisitions was supported by extremely strong confidence in the performance of the global economy, record-high stock market valuations and the strength of the global and local M&A markets.
“Geopolitical uncertainty has become the new normal, so Australian executives are moving forward with deal-making intentions at near record levels and well above their global counterparts,” said Mr Larocca.
“We found that these acquisition ambitions are being largely driven by the desire to ‘future-proof’ their organisations against technology-driven disruption, bolstering their own internal digital resources and acquiring innovation and talent.
“A new and interesting nuance we also found is that when structuring deals, more than half the local respondees say that a key factor is to ensure a broader narrative that will engage all stakeholders, perhaps reflecting a growing focus on purpose and purpose-led transformation.”
The most active sectors pursuing acquisition in the next 12 months were telecommunications, automotive, technology, power and utilities, and mining and minerals, with most recording a medium level of convergence with the technology sector.
The report also revealed that Australia had jumped to fifth place, up from eighth, in terms of being seen as a global investment destination.
“We are seen as a safe haven with strong regulation compared to other countries and an important beachhead for Asian growth plans by many US, European and Middle Eastern corporates,” said Mr Larocca.
“That being said, local executives are concerned about geopolitical and economic uncertainty.
“These concerns will need to be addressed if we are to maintain pride of place as an investment destination.”
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