New Delhi: The current turbulence in the global financial markets doesn’t seem to have deterred privately held businesses across the world from going the inorganic road to growth.
According to the International Business Report, produced by Grant Thornton International, privately held businesses see domestic and international M&A as a key strategic tool to drive growth.
The report says as many as 44% of 7,8000 such firms spread over 34 economies are planning to grow through acquisitions in the next three years and 23% of those businesses anticipate a cross border deal.
Pankaj Karna, M&A partner, Grant Thornton India says this reflects the current positive attitude amongst business owners in the emerging economies.
”Three factors are driving overseas acquisitions by Indian privately held companies. Firstly they want to be globally competitive and close to their customers, secondly they want to acquire technology and thirdly relative valuations look favourable,” says Karna.
He adds that fund-raising is easier now than it was 5 or 10 years ago and that privately held businesses in India are particularly positive now.
The survey reveals that business owners in the fast growing BRIC economies are now embracing M&A, with 59% of businesses in BRIC countries reporting an anticipated acquisition in the next three years.
Mainland China has the highest number of businesses expecting to grow through acquisition, with 67% of businesses responding positively. Sixty-four per cent of PHBs in Brazil report an anticipated acquisition, while in India and Russia the numbers were 46% and 40% respectively.
This supports the findings of the IBR business optimism survey which identified business owners from the emerging economies as the most optimistic in the world.
Karna added, ”Whilst PHBs may not be conducting headline grabbing deals that catch the public’s interest, they are increasingly becoming more confident and successful in transacting internationally. In particular, PHBs in the fast growing economies such as mainland China and India see international M&A as one means of progressing up the value chain through the acquisition of brands and distribution channels in North America and Europe.”