One encouraging aspect of the survey is that companies are expected to use more debt and equity to finance deals as opposed to relying on cash. That suggests executives are more willing to take on risk.
Since the financial crisis that started in 2007-8 and the ensuing recession, many companies around the world pulled back on risky investments and sought to rebuild their finances. That involved paying down debts and rebuilding their cash positions. Potentially risky undertakings such as M&A fell out of vogue and deal volumes and values slid sharply.
"Companies have weathered a prolonged period of uncertainty during which time they strengthened their balance sheets," said McCrostie. "Having warehoused cash for a number of years and with ready access to credit, leading corporates are in a strong financial position to do deals they now have more confidence to pull the trigger."
The survey comes amid signs of a pick-up in the M&A market, which could be a boon to stock markets as well as the many advisers and facilitors involved in such deals.
The most notable recent deal was Vodafone's sale of its 45 percent stake in Verizon Wireless to Verizon, for $130 billion, which should be completed next year. And only last week, San Francisco-based pharmaceutical wholesaler McKesson announced an agreed takeover of Celesio in a deal that values the German company at $8.3 billion.
Ernst & Young found that the top 5 destinations for would-be deal-makers are China, India, Brazil, the U.S. and Canada. Sectors expected to see the highest level of deals are life sciences, oil & gas, automotive, consumer products, automotive and technology.
The survey was based on interviews with 1,600 senior executives from large companies around the world and across industry sectors.
- AP