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February 27, 2012

Canadian CEOs more bullish on expansion using M&A than G7 and US counterparts: PwC global study

TORONTO-- A slower economy is not stopping Canadian CEOs from using mergers and acquisitions as a key growth strategy, as their desire to expand into foreign markets grows. This is according to the 15th Annual Global CEO Survey conducted by PwC, which compared the views of 130 chief executives in Canada to their counterparts around the world. The findings are featured in PwC's Capital Markets Flash newsletter www.pwc.com/ca/cmf.

Canadian CEOs are more bullish on the future, compared with their G7 and US counterparts. One quarter of Canadian CEOs surveyed are planning to engage in M&A, compared to the global average of just 12%. Canadian CEOs also have a stronger appetite for joint ventures and/or strategic alliances than their developed world peers.

"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% of the total global M&A market last year, up from 7% at the 2007 market peak," says Canadian Deals Leader Kristian Knibutat.

Some highlights from the Canadian participants in the survey include:

  • 73% are confident in their ability to finance growth
  • 71% of CEOs with operations in Western Europe expect growth in their operations in 2012, compared to just 36% of their global peers expressing the same sentiment.
  • 45% wish they could spend more time developing operations outside their home markets

Knibutat says there are a number of examples which point to a transformation in deal making in Canada. Last year was the first time in history that the value of Canadian acquisitions into the US outpaced the value of US-lead deals in Canada.

The survey also finds that Canadian CEOs are still concerned about the global macroeconomic environment, with only 13% expressing optimism about the prospects for a global economic rebound. 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 chief executives (66%) 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," says Knibutat.

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