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Canadian execs start thinking acquisition

Published by Steve Coleman on May 09, 2012

Half of all Canadian execs have acquisition on the mind this year.

A new Ernst & Young survey says 48 per cent of Canadian executives expect to pursue a deal in the next year, up from 32 per cent in April 2011.

Canadian executives looking to get into acquisition talks this year are bucking the trend in other parts of the world where only 31 per cent said they'd consider it this year. The number was slightly higher in the US at 34 per cent. However, both sets were down from 41 per cent and 34 per cent, respectively from last October.

"In Canada, confidence in the local economy has more than doubled," says Tony Ianni, a partner in Ernst & Young's Transaction Advisory Services practice in a news release. "While there is still volatility and corporate executives are still cautious, their outlook is more positive than many global respondents who operate in a more challenging environment."

Of the Canadian participants surveyed, Ernst & Young said:

  • 31 per cent of Canadian businesses are looking to divest, up from 23% in October 2011.
  • 80 per cent believe the number of deal opportunities is increasing, and more than three-quarters believe the likelihood of closing deals is greater than it was six months ago.
  • 75 per cent view credit availability as stable or improving.
  • 72 per cent believe the Eurozone crisis has affected their business.

After spending the years following the 2008 recession getting their financial houses in order, Canadian executives said the climate is better now for a new round of mergers and acquisitions.

That applies to companies in emerging markets, too.

The top potential sites for Canadian investment dollars include the US, China, Hong Kong, Singapore and India.

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