08/04/2009 - 14:14

WA most aggressive in acquisitions

08/04/2009 - 14:14

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Western Australia has topped a survey of businesses intending to pursue acquisitions in the next three years as the global downturn lowers the price of competitors.

WA most aggressive in acquisitions

Western Australia has topped a survey of businesses intending to pursue acquisitions in the next three years as the global downturn lowers the price of competitors.

Research by business consultancy Grant Thornton International found 56 per cent of WA businesses planed to grow through acquisitions.

Queensland was a close second with 54 per cent, while nationally, 47 per cent of businesses were planning acquisitions this year with 82 per cent targeting domestic firms.

The number was significantly higher than the global average of 37 per cent.

"Due to the general slowdown in China and South-East Asia, Australian businesses are beginning to take advantage of the current bargains that are available," Grant Thornton Australia spokesman Tony Markwell said.

"This is an ideal time for those Australian businesses which have the capacity to purchase and capitalise on the weaker market position of their competitors.

"Domestic acquisition will put these businesses in a stronger position for when the market turns, which it eventually will."

Among the 250 Australian respondents to the global survey, the key reasons to grow were the need to build scale within the existing business (47 per cent), a desire to gain access to new geographic markets (39 per cent), and the need to access lower-cost operations (27 per cent).

An interest in acquiring new technologies or established brands was put at 24 per cent.

The survey also found a significant drop in the proportion of privately held businesses planning on selling up within the next three years.

Just 14 per cent were expecting to sell up in 2009 compared to 22 per cent in 2008.

However, Australia still had more than double the global average of firms hoping to exit (6 per cent), and is second only to New Zealand in terms of plans to sell (18 per cent).

"With the shutters coming down across the rest of the world, it seems likely that domestic firms will turn their attentions inwards when planning their next strategic investment," Mr Markwell said.

 

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