A slower economy is not stopping Canadian CEOs from using mergers and acquisitions (M&A) as a key growth strategy, as their desire to expand into foreign markets grows, according to a recent survey by PwC.
Canadian CEOs are more bullish on the future, compared with their G7 and United States counterparts, found the 15th Annual Global CEO Survey which compared the views of 130 CEOs in Canada to their counterparts around the world. One-quarter of Canadian CEOs surveyed are planning to engage in M&A, compared to the global average of just 12 per cent. Canadian CEOs also have a stronger appetite for joint ventures and/or strategic alliances than their developed world peers, said PwC.
"During 2011 we saw how Canadians stepped outside their comfort zone and onto the global stage. Canadian CEOs are not in a wait-and-see mode — they are planning for more expansion outside of this country in 2012. Our CEOs were active in 10 per cent of the total global M&A market last year, up from seven per cent at the 2007 market peak," said Kristian Knibutat, Canadian deals leader at PwC.
Some highlights from the Canadian participants in the survey include:
•Seventy-three per cent are confident in their ability to finance growth.
•Seventy-one per cent of CEOs with operations in western Europe expect growth in their operations in 2012, compared to just 36 per cent of their global peers expressing the same sentiment.
•Forty-five per cent wish they could spend more time developing operations outside their home markets.
Canadian CEOs are still concerned about the global economic environment, with only 13 per cent expressing optimism about the prospects for a global economic rebound, found the survey. The threats of continued equity market and foreign exchange rate volatility and protectionism, in particular, were top-of-mind.
A key finding is that a majority of Canadian CEOs (66 per cent) anticipate that their companies will change strategic course in 2012.
"We believe this is likely a reaction to concerns that CEOs have over a challenging global economy and an acceptance of slower domestic growth," said Knibutat.