Australian CFOs are more optimistic about business performance and plan to pursue more of M&As in 2013 than last year, new data from the Bank of America Merrill Lynch reveals.
Forty-one percent of Australian CFOs surveyed for BAML’s 2013 CFO Outlook Asia report said they intended to participate in M&A activity this year, compared to only 22% in 2012.
Earlier this year, M&A activity had dried up to such an extent that Australian lawyers had taken to cold calling companies after reading about potential M&A deals in the media.
Compared to the other Asia Pacific companies, BAML found Australian firms the second-most likely to engage in M&As in 2013, after Hong Kong. Only 28% of the more than 600 CFOs surveyed for the report had M&A intentions for 2013.
Here’s what CFOs said when BAML asked if they planned to engage in M&A activities in 2013:
More than half (55%) of Australian CFOs said they would focus on domestic M&As, while 14% said they would look at opportunities in North America.
Of the regional CFOs planning to engage in M&As, half hoped M&As would help them meet growth targets, 14% said they planned to acquire technology, and 13% said M&As would enhance their production capabilities.
BAML found Australian CFOs more optimistic about 2013 than 2012: about two thirds (67%) expected higher revenues and 61% expected a year-on-year profit increase in 2013, compared to 58% who forecast higher revenues in 2012.
Researchers noted that Australian optimism came “despite a falling economic growth rate and a stronger currency putting pressure on sales”.
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