M&A appetite declines to a 9-year low

Only 2 in 10 CEOs plan to ink an M&A deal in the next 12 months.

Firms’ intention to ink mergers and acquisitions (M&A) deals has dipped to its lowest level since 2014.

According to EY, only 28% of CEOs plan to enter an M&A deal in the next 12 months.

EY attributed the decline in M&A appetite amongst firms to the current geopolitical and macroeconomic uncertainty.

The declining appetite for M&A also reflects the “confusion on AI targets and the real-world drop-off in AI-focused M&A following a surge earlier this year,” said EY.

Overall M&A interest in Asia-Pacific (25%) is also far lower compared to the United States (47%) and the Europe, Middle East, and Africa region (EMEA) (29%)
 
“The lower level of deal intentions could be attributed to the uncertain geopolitical and economic environment. Further, among the many priorities, corporates are following a more measured approach to capital allocation and portfolio optimization, as CEOs are tapping on M&A opportunities to build capability in technology and AI rather than meeting growth ambitions,” Sriram Changali, EY-Parthenon Asean Value Creation Leader,  said.