Global M&As May Pick Up in Next 12 Months, Chinese Execs Predict in Ernst & Young Survey
Zhou Nan
DATE:  Nov 23 2019
/ SOURCE:  yicai
Global M&As May Pick Up in Next 12 Months, Chinese Execs Predict in Ernst & Young Survey Global M&As May Pick Up in Next 12 Months, Chinese Execs Predict in Ernst & Young Survey

(Yicai Global) Nov. 22 -- About 56 percent of executives at Chinese firms believe that the global mergers and acquisitions market will improve in the next 12 months, according to a new survey by professional services firm Ernst & Young.

Some 46 percent of them also expect to actively pursue M&A deals over the period, the findings of London-based Ernst & Young's Global Capital Confidence Barometer report showed.

The life sciences, media and entertainment and technology sectors are among the most active areas in which Chinese companies plan to pursue M&As, the report said. Their proportion is 85 percent, 75 percent and 54 percent, respectively.

The challenges posed by trade issues, geopolitical concerns and other uncertainties are exerting downward pressure on export-oriented countries and regions.
But in practice, M&As are often the fastest way for firms to respond to obstacles in a proactive manner, Chang Ying, a partner at Ernst & Young's transaction advisory service, told Yicai Global.

So despite concerns about geopolitics or slowing growth, companies are actively seeking M&As to address current and potential growth barriers, Chang said. She added that economic recession will not constitute a great threat to capital markets in the short term, with increasingly more companies releasing funds by spinning off assets or withdrawing investment.

Government policies also support M&As by Chinese companies. Early this month, China Securities Regulatory Commission Vice Chairman Yu Qingmin said that the CSRC actively supports and encourages domestic listed firms to exploit their own advantages in tech, business and fundraising, and go global via cross-border M&As while integrating their advantages with the demands of enterprises of countries and regions along the Belt and Road.

They should strengthen collaborations and exchanges and promote the development of businesses and expansion of the market, so as to jointly improve competitiveness and achieve a win-win situation and mutual benefits, Yu added.

Ernst & Young surveyed more than 2,900 global executives in 45 countries and regions and 14 industries between August and September. Some 176 were Chinese.

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Keywords:   M&A,Ernst & Young