Bangkok--24 Apr--Grant Thornton
The latest research from the Grant Thornton International Business Report (IBR) finds 27.9% of businesses globally are planning growth through acquisition in the next three years, either domestically or cross-border. However just 11% of Thai businesses are planning to grow through acquisition over the same period. This is also well below the ASEAN average of 23%. In the 44 economy survey, only businesses in Estonia (6%), Taiwan (9%) and Japan (10%) were lower.
Further, just 3% of Thai business leaders expect to sell their companies over the next three years. Only in Lithuania (2%) are business leaders less likely to sell over the next three years. The ASEAN and global averages are higher at 9% and 8% respectively.
Ian Pascoe, Managing Partner at Grant Thornton Thailand said: "M&A remains a key strategic tool to drive growth and build scale. With the growth in Thailand, ASEAN and Asia it is concerning that so few companies in Thailand are considering this as an option for driving strategic growth. Our neighbours certainly are."
Globally, M&A activity is holding relatively steady however cross-border activity looks set to increase showing its highest level since 2008, at the expense of domestic M&A. Of those businesses looking at M&A’s, 39% are planning an overseas M&A over the next three years, up from 33% this time 12 months ago. Many companies are now sitting on significant cash reserves which generate little or no return. This coupled with moribund growth at home may well be leading business owners to look offshore, particularly to emerging markets, for growth opportunities.
Ian Pascoe continued, “Whilst the overall outlook for M&A remains cautious due to the recent backdrop of the Eurozone crisis, the US fiscal cliff and political instability in the Middle East, what many of our M&A teams have been experiencing is the substantial interest and support for corporates of all sizes to look beyond their own borders for acquisition opportunities”.