Almost one third of PHBs in Singapore enthusiastic in growing through M&A

Almost one third of PHBs in Singapore enthusiastic in growing through M&A

Singapore, 25 April 2008 - According to the latest Grant Thornton International Business Report (IBR), a balance of 27% of privately held businesses (PHBs) in Singapore reported plans to grow through acquisition in the next three years, compared to a global average of 44%. Despite the current turbulence in world financial markets, PHBs are becoming increasingly more sophisticated, international and acquisitive in their outlook, as M&A activity in fast growing economies such as mainland China and India see international M&As as one means of progressing up the value chain through the acquisition of brands and distribution channels.

According to Aw Eng Hai, a partner of Foo Kon Tan Grant Thornton, the Singapore member firm of Grant Thornton International, “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”.

Eng Hai continues: “Cross-border M&A activity might have once been the preserve of the large multinational companies, but it is now an essential and powerful business tool wielded by a vast range of companies seeking growth. Global opportunities too have become visible and attainable and PHBs with their inherent entrepreneurial and dynamic character have been quick to seize those opportunities. There are also a greater proportion of businesses expecting to undertake public listing. In Singapore, 16% of PHBs expects their businesses to undergo a public listing in the next 3 years, compared to 22% globally”.

The IBR survey shows that M&A activity is increasingly driven by corporations in emerging markets. Coupled with Singapore’s unprecedented growth rate, its political and regulatory landscape is favourable for M&A activity. Singapore’s emergence as a strong global financial centre will present attractive market opportunities for funders, thereby offering opportunity to undertake strategic acquisitions.

The IBR report 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. 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.