The economies across Canada and worldwide are stable or on the upswing, say executives, but most companies aren’t planning any merger and acquisition plans, according to Ernst &Young.
In EY’s latest semi-annual Canadian Capital Confidence Barometer, 98% of respondents in an executive survey said the economies are stable are improving. However, only 24% said they will pursue M&As in the next year. This is the lowest level in two year and down a full 17 percentage points from April.
“Despite quite a high level of confidence in the economy, Canadian executives are still showing caution around M&A opportunities,” said EY transaction advisory services partner Tony Ianni.
“The results of our survey tell us that while executives do expect the market to be generally busy, they're still not ready to pull the trigger themselves on those opportunities.”
Ianni said the main reason businesses aren’t pursuing M&As is that companies are trying to improve on their core business models rather than beginning new, potentially costly, initiatives.
The survey found that 60% of executives expect the M&A market in Canada to remain stable over the next year. This is up 15 percentage points from 45% in April.
Ianni said the positivity seen in this latest survey will translate over time into more M&A movement.
@EmmaHampelBIV
