Companies are more likely to make larger, equity- and debt-funded acquisitions over the next year as chief executive officers become more confident of an economic recovery, according to consulting firm EY.
About 35 percent of global executives surveyed by the company formerly known as Ernst & Young are planning acquisitions in the next 12 months, up from 25 percent a year earlier, EY said in a report published today. Just 11 percent of those surveyed anticipate economic decline in the period, the lowest proportion in two years.
About $1.85 trillion in takeovers have been announced this year, led by Vodafone Group Plc (VOD)’s $130 billion sale of its stake in Verizon Wireless, the largest U.S. mobile operator. That’s up from about $1.77 trillion in the same period in 2012.
“Barring any further significant economic or geo-political shocks, we should see the resuscitation of a global M&A market,” Pip McCrostie, EY’s global vice-chair for transaction advisory, said in a statement. “Sentiments are being buoyed by a much more positive view of deal fundamentals.”
Some 19 percent of executives who responded to the survey are interested in making deals valued between $501 million and $1 billion, more than double the percentage who said the same six months ago, EY said.
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