92% of European CEOs prioritising deal-making as a source of growth in next 12 months, survey finds

Almost all European CEOs are eyeing deals such as mergers and acquisitions (M&A) as possible routes to growth in the next 12 months, a global survey has found.

The Global CEO Survey, conducted by publication CEOWORLD magazine in January 2024 and published on Monday (today), recorded the views of 126,500 CEOs from all over the world. In the study, practically all of the respondents (98 per cent globally) stated that they are anticipating an economic downturn in 2024, particularly due to geopolitical tensions and disruptions in the global supply chain.

Additionally, business leaders are also worried about uncertainties surrounding monetary policy direction and the rise in capital costs, with 30 per cent of global CEOs believing that these are the biggest risks to their future business growth. In this regard, the highest percentage was recorded in the United States at 32 per cent, closely followed by Europe (28 per cent) and Asia (27 per cent).

While there have been drops in concerns over restrictive regulations and trade and investment policies, 26 per cent of global CEOs still consider it a significant business risk.

As a result, CEOs are looking towards forming alliances with third parties as a way of achieving growth, with business leaders across Europe, Asia, and America actively seeking opportunities to gain a competitive advantage despite the negative outlook. These deals include M&As, divestments, joint ventures, or strategic alliances with third parties.

European and American CEOs were top in this ranking, with 92 per cent of both eyeing these deals, followed by 86 per cent in Asia.

Out of these deal-making activities, 65 per cent of European respondents stated that they are targeting M&As or divestments. 63 per cent of CEOs in America and 62 per cent in Asia had the same sentiment.

In recent years, there has been a reported increase in M&A activity locally, with around 15 per year being captured between 2008 and 2016, while around 15 to 25 are estimated to have been done every year since. This rise has been attributed to generational shifts, including succession planning and changes in mentality, as well as market dynamics that are encouraging businesses to explore M&A activity.

In a world characterised by uncertainty and volatility, the resilience of individual enterprises is constantly being tested, and thus many have looked towards collaboration and collective action.

The Global CEO Survey also found that in order for CEOs to guide their businesses to a stronger comeback and remain competitive in the market despite the aforementioned economic downturn, 22 per cent of global respondents plan to increase investment in sustainability as a core aspect of their strategy and offering. This was the case for 28 per cent of CEOs in Asia, 25 per cent of those in Europe, and 23 per cent in America.

Aside from that, 33 per cent of global CEOs are seeking to increase investment in talent, including workforce well-being and skills development, in order to tackle talent shortages.