Executives Bullish about Mergers, Alliances

Half of CEOs responding to EY’s latest Capital Confidence Barometer survey say their companies expect to actively pursue acquisitions in the next 12 months, and 40% plan to enter an alliance with another company.

The EY report, which is issued twice per year, is based on a survey of some 1,700 C-level executives in 18 business sectors and 45 countries.

April’s barometer finds executive interest in mergers and acquisitions down from a six-year peak of 59% last October. But at 50%, interest remains well above the barometer’s 41% average since April 2010. EY says the survey indicates executives consider the M&A market “strong and sustainable.”

Among companies looking for acquisitions, the emphasis is shifting to bigger and more dramatic deals, according to EY. It notes that interest in deals valued between $250 million and $1 billion has jumped 50% since 2014.

Meanwhile, interest in less formal alliances, which focus on specific projects, is rising. EY’s survey says executives consider such collaborations an effective way to respond to the digital revolution sweeping through the general business environment. The report says alliances can be a relatively safe way for companies to handle a volatile market and position themselves for multiple possible business futures.