Asia Pacific is business leaders’ top destination for expansion despite lower appetite for M&A, said EY recently when releasing its latest EY CRO Outlook Pulse survey.
The quarterly EY survey of 1,200 global CEO reveals that Asia Pacific CEOs continue to be on the offense when investing for the future, with a clear majority (84%) planning some kind of transaction in the next 12 months.
However, M&A deal intentions have dropped significantly, with only 23% of Asia Pacific CEOs planning M&A in the next 12 months (compared to 56% in July 2023), EY said.
The appetite to pursue M&A is far higher in the US (52%), reflecting the strong uptick in dealmaking involving US companies seen in 3Q23, the firm added.
Despite the downcast sentiment toward M&A, just over half of Asia Pacific CEOs (53%) plan to expand operations in the next 12 months outside of their headquartered location, survey results indicated.
With a strong preference for expansion within the wider region, Asia Pacific CEOs have identified China, Australia, Japan, India, and South Korea as their top five destinations when asked where they would look to outside of their headquartered market, EY pointed out.
Asia Pacific is also global business leaders’ top destination for expansion, said EY, adding that the top five expansion destination for global CEOs are also within the region.
The current geopolitical and macroeconomic uncertainty sees CEOs take a more nuanced approach to how and where they might invest. Asia-Pacific has emerged as the preferred investment destination for CEOs globally, said Yew-Poh Mak, EY Asia-Pacific Strategy and Transactions Leader.
“This underlines the attractiveness of Asia Pacific with its strong growth prospects, critical role in global supply chains, technological developments, and a young and skilled workforce. It also reflects the regional focus of Asia Pacific CEOs, who are looking to capitalise on opportunities and synergies in this diverse and dynamic region,” he noted.
