Cross-border M&A, supply chain and sustainability are top priorities for Asia Pacific business leaders, said EY recently when releasing its EY 2022 CEO Outlook Survey.
As the world aims to cautiously emerge from the pandemic, the more than 2000 global CEOs surveyed revealed that they sought to navigate critical short-term issues are now refocusing their attention on longer-term imperatives for their business, EY pointed out.
In Asia Pacific, 54% of CEO respondents, a 10-year high, indicate that they are actively planning to pursue acquisitions in the next 12 months.
Following a record-high of US$1.4 trillion worth of M&A in Asia Pacific in 2021, the appetite for dealmaking shows no signs of abating with 73% of Asia Pacific CEO respondents saying cross-sector M&A will reframe and reshape their business models as they look to sectors outside of their own.
These CEOs are on the lookout for targets abroad, with 83% suggesting they will pursue cross-border M&A, ahead of their North American (37%) and European (71%) counterparts.
On the supply chain front, 84% (versus 79% of global CEO respondents) say they are proactively reconfiguring their operations and supply chains.
The pandemic is not the sole cause of supply chain woes: labor, energy and raw material prices have been steadily rising and, as a result, more than 30% of Asia Pacific CEO respondents say the primary driver for reconfiguration is to reduce costs and minimise risks.
Sustainable business strategies are becoming critically important for Asia Pacific business leaders, even as they continue to focus on growth and return on investment (ROI).
Nearly three quarters of respondents (74%) cite environmental, social and governance (ESG) considerations as a more important driver of value over the next few years.
One-third say they have sustainability key performance indicators (KPIs) for long-term value creation, and 26% indicate that M&A is a critical avenue to increase ESG scores, which will attract investors.
“In this current environment, tech disruption and digital transformation have created a new breed of innovators, blurred industry boundaries and formed new patterns and value chains. Industries are beginning to converge, and companies no longer operate in well-defined sectors, forcing businesses to re-evaluate their competition and strategies,” said Yew-Poh Mak, EY Asia-Pacific Strategy and Transactions Leader.