M&A not popular means of expansion: Survey

The latest research from the Grant Thornton International Business Report (IBR) finds 27.9 per cent of businesses globally are planning growth through acquisition in the next three years, either domestically or cross-border. 

  In the 44 economy survey, only businesses in Estonia (6 per cent), Taiwan (9 per cent) and Japan (10 per cent) were lower.

Further, just 3 per cent of Thai business leaders expect to sell their companies over the next three years. Only in Lithuania (2 per cent) are business leaders less likely to sell over the next three years. The ASEAN and global averages are higher at 9 per cent and 8 per cent respectively.

"M&A remains a key strategic tool to drive growth and build scale. With the growth in Thailand, ASEAN and Asia it is concerning that so few companies in Thailand are considering this as an option for driving strategic growth. Our neighbours certainly are," said Ian Pascoe, managing partner at Grant Thornton Thailand.

Globally, M&A activity is holding relatively steady however cross-border activity looks set to increase showing its highest level since 2008, at the expense of domestic M&A. Of those businesses looking at M&A’s, 39 per cent are planning an overseas M&A over the next three years, up from 33 per cent this time 12 months ago. Many companies are now sitting on significant cash reserves which generate little or no return. This coupled with moribund growth at home may well be leading business owners to look offshore, particularly to emerging markets, for growth opportunities.

“While the overall outlook for M&A remains cautious due to the recent backdrop of the Eurozone crisis, the US fiscal cliff and political instability in the Middle East, what many of our M&A teams have been experiencing is the substantial interest and support for corporates of all sizes to look beyond their own borders for acquisition opportunities,” Poscoe said.