Asian firms target Europe

24 January 2012

HONG KONG: Over 40% of large Asian brand owners are planning to buy companies in Europe during the coming year, as the financial crisis in the region offers opportunities to make purchases at favourable prices.

FTI Consulting, the advisory group, surveyed 800 executives in Asia, the Middle East and North America to gauge how different firms around the world are responding to the troubles facing the Eurozone.

It found that 45% of Asian enterprises are currently involved in or intend to make strategic acquisitions in Europe over the next 12 months, falling to 14% for Middle Eastern businesses and 7% of North American corporations.

By contrast, only 35% of Asian companies expect to do so in markets beyond the Eurozone, suggesting this area is perceived as providing the most "fertile ground" for takeovers, the study said.

Among the other priorities of Asian brand owners will be investing in innovation, as 67% of organisations based in the region anticipate increasing their expenditure covering this discipline.

Exactly 50% are pursuing organic growth rather than expanding via M&A activity, showing that strategies remain diverse.

When discussing the challenges facing the Eurozone, a 73% majority of Asian enterprises reported that their business had been influenced, a group evenly split between firms citing positive and negative impacts.

In comparison, 38% of Middle Eastern operators had experienced unfavourable consequences from this situation, while 16% had enjoyed some benefits. A 70% share of their North American counterparts had not seen any discernible impact.

Mark Malloch-Brown, FTI Consulting's chairman, Europe, the Middle East and Africa, said: "In any period of systemic dislocation, there will be winners and losers."

"Our research highlights that Asian businesses have the right business fundamentals and, more important, the right mentality to take advantage of the changing landscape."

Data sourced from FTI Consulting; additional content by Warc staff