In a statistic trailing only the US, nearly 73 percent of Canadian executives have M&A plans for the next year, compared to only 24 percent in October 2014, according to Ernst & Young’s Canada Capital Confidence Barometer.
This is Canada’s highest rate in the survey’s history, which started in 2009. Seventy-four percent of US executives expressed interest in M&A this year. The survey looked at 1,600 executives from large companies around the world.
“Despite the high appetite to acquire, we have confidence this isn’t an overheating market,” said Doug Jenkinson, EY’s transaction advisory services partner. “Executives told us they’re being extremely prudent in evaluating opportunities – and 82 percent said they’re willing to walk away from deals that aren’t fully aligned with their corporate strategy. This is a sure sign of a strong, but thoughtful market.”
Many of these deals will supposedly stay in Canada – 66 percent of respondents identified the Canadian market as their primary focus. The report noted that this was likely thanks to unstable commodity markets, which have impacted the flow of capital. “After an extended period of a wait-and-see approach in M&A, we’ve seen very robust activity during the last few quarters. Our latest Capital Confidence Barometer suggests this strength will continue for some time,” said Jenkinson. “Executives are embracing M&A as a tool for generating long-term growth as part of a bigger strategy to make their companies more competitive in the next decade.”