53% of SEA executives eyeing acquisitions in next 12 months

Appetite to acquire at two-year high.

An estimated 53% of SEA executives expect to pursue acquisitions in the next 12 months, with this being the highest appetite over the past two years.

According to a report from Ernst & Young, it’s a strong signal that perhaps companies are also resorting to M&A as a means of growth.

Likelihood of closing deals, quality of acquisition opportunities and number of acquisition opportunities are all showing a strong positive trend.

Despite this, the confidence level for closing deals remain less than 50% reflecting the persisting challenges in deal making.

Here's more from Ernst & Young:

A significant majority of the executives see the M&A market improving across the SEA markets. Over 55% see at least two deals in the pipeline with a very high expectation to see that pipeline improving over the next 12 months.

Overall the deal appetite is high with a strongest activity in the coming year to be largely focused on the mid market.

“With strong economic sentiment and ready access to capital focus on M&A across sectors and markets in the region is showing a good outlook.

There is increased levels of attention that is being devoted by corporates – local as well as multinational – competing with financial players to secure the right business.

However, less than 50% see likelihood of closing deals. This signals that selling appetite in the region is low and sellers are not motivated just by looking at the price on offer," said Luke Pais, M&A and PE Leader, ASEAN.