DAVOS: Global CEOs Shying Away From Cross-Border Deals

[Stocks-to-Watch]

DAVOS, Switzerland–Investors hoping to make a quick buck from a spate of mergers and acquisitions in 2012 will be sorely disappointed.

Despite some attractive valuations, company bosses signaled they are less likely to make cross-border acquisitions in the next 12 months than they were a year ago, according to the findings of PricewaterhouseCoopers 15th annual global CEO survey.

Only 28% of CEOs say they plan to complete cross-border deals in 2012, a drop from 34% a year ago. Last year, only 26% of CEOs completed international transactions. PWC surveyed 1,258 CEOs worldwide.

The report, released here Tuesday on the eve of the World Economic Forum, showed that chief executives were confident in their own companies’ growth prospects, even though almost half (48%) believe the world economy will decline further in the next year. Still, the data suggest that bosses believe they have learned how to manage through difficult and volatile times.

“CEO confidence is decidedly down as they deal with the aftershocks to the recession,” says PricewaterhouseCoopers International Chairman Dennis Nally.

“CEOs are disappointed with the course of the global economy and the pace of recovery. The optimism that had been building cautiously since 2008 has begun to recede.”

Among the survey’s findings, 80% of CEOs were concerned about economic growth, 64% about the instability of capital markets, 66% about government responses to fiscal deficits and debt burdens, and 58% about exchange rate volatility and 56% about over regulation.

Among the surprises, the survey showed that CEOs in China and India were significantly less confident in their companies’ prospects. Only 51% of CEOs in China were confident, compared with 72% a year ago. That figure for India dropped to 55% from 88%.

This is due to concerns among executives in those countries about debt problems in Europe, says Nally. “The bottom line: CEOs are not feeling good about the health of the global economy,” he says.

– Jonathan Buck



Original Article Source by Barrons.com