Asian companies most keen to invest in Europe

The ongoing crisis in the eurozone is presenting more opportunities for M&A, but this time it is from East to West, a survey show.

A recent FTI Consulting survey of more than 800 top executives in Asia, the Middle East and North America found that two-thirds (64%) of the respondents expected at least one of the 17 eurozone members to abandon the euro, and just three in 10 (31%) believed the European Union (EU) will begin to recover from the crisis in 2012. This was evenly reflected across the main regions surveyed and it appears that companies are preparing for the worst by demanding changes in contracts with the eurozone to include exit scenarios as the euro debt crisis drags on.

Results from the survey show that Asian companies are more likely to find investment opportunities in the EU than those based in the Middle East or North America. Forty-five percent of companies in Asia reported that they were presently conducting or looking to do business in Europe in the next 12 months, compared with just 14% in the Middle East and 7% in North America. A large majority of companies are looking to invest in innovation and half are focused on organic growth (50% overall and 67% in Asia, with a massive 80% for China).

Three-quarters (73%) of respondents in Asia said they have been impacted by the ongoing crisis; these were evenly split between those that experienced a positive and a negative impact. This was markedly different from the other regions, where 25% of executives in North America said their businesses had unfavourable effects. In the Middle East, 38% said the crisis has had an unfavourable impact on their operations. Sixty percent of the Mainland Chinese respondents said they intend to continue to conduct business in countries such as France, Germany, Italy and the U.K. within the next year, while just 10% said that they would not.

According to FTI, it is apparent that while companies in the Middle East and North America continue to suffer from the crisis in Europe, Asian businesses are maintaining the right mentality to take advantage of the changing landscape by planning to make further strategic acquisitions in the EU in the next 12 months.