Most major UK plcs expect increased M&A but ‘confidence gap’ exists between buyers and vendors
Over two thirds of FTSE 350 businesses expect an increase in UK M&A activity over the next six months, according to a new survey by PricewaterhouseCoopers, with a fifth predicting a major rise in their sector and just 10% foreseeing a decline in deals. Underlying the predicted increase in M&A is renewed corporate confidence, with 73% of respondents saying they would be confident to undertake a major acquisition in the next six months. More than half of the companies surveyed, however, would not be confident about making a major disposal, with over half citing concerns over valuation as the main reason.
The PricewaterhouseCoopers UK Deal Confidence survey of 100 senior executives - Chief Execs, FDs and strategy directors - is the first to track 'deal confidence' levels - ie. the willingness of companies to undertake M&A - in order to assess likely trends in transaction activity. More than three quarters of respondents were at FTSE 350 companies, with the remainder at private companies with turnover over £300m.
Overall 41% describe their M&A strategy as 'acquisitive', 13% are planning for both acquisitions and disposals, while 39% state their focus will be on organic growth only.