Rising economic and corporate confidence and the drive for innovation and growth are outweighing geopolitical and regulatory concerns as more than half of respondents (52%) indicate that they plan to acquire in the next 12 months.
The main destinations for investments are USA, Brazil, Canada, China, and UK.
Nearly two-thirds of executives (61%) expect the number of deals in their M&A pipeline to increase over the next 12 months – up from 36% in April 2017. The number of executives expecting to complete more deals in the next year has more than doubled (67% in April 2018 versus 33% in April 2017).
An overwhelming majority of executives (86%) expect the global M&A market to grow further over the coming 12 months – a significant increase from last year (39%). And, more than three-quarters of executives (80%) predict increased competition for M&A assets in the next year, with most (68%) of those respondents citing private equity (PE) as the biggest competitor.
“Rising confidence and the continued drive for digital is seeing deal pipelines and M&A appetite increasing, and we expect this to remain strong for the foreseeable future. The private equity deal activity increase we saw in 2017 looks to be accelerating. Interestingly, while we can anticipate intense competition, we may also see more collaboration as private equity investors club together with corporates to do deals,” said Steve Krouskos, EY Global Vice Chair – Transaction Advisory Services .
The majority of executives (73%) believe global economic growth is improving. Three-quarters (77%) of respondents also believe corporate earnings are set to improve, while just 2% predict a decline in valuations.