Local companies are looking at expanding their businesses in an attempt to compete globally, an international survey showed.
In a report, Grant Thornton International said that 50 percent of privately held businesses (PHBs) in the Philippines plan to grow through acquisition in the next three years.
The results, released by Grant Thornton’s local partner Punongbayan & Araullo (P&A) showed that local businessmen are confident on the prospects of the local business climate despite the current state of the world financial markets.
Of the PHBs that do plan to grow through acquisition, 63 percent expect this growth to be through cross-border acquisition.
“This is a very positive indication that Philippine businesses are now ready to compete in the global acquisitions of businesses and expand their operations offshore,” P&A’s Transaction Advisory Services head Francis Albalate said.
An example of a firm that is growing is IPVG Corp. IPVG earlier announced its plan to buy US business process outsourcing firm Influent Inc. for $14 million.
However, 25 percent of the firms said their growth will be through local acquisition. Beauty and personal care product manufacturer Splash Corp. announced plans to acquire two local brands within the year to strengthen its position in the health and wellness market while Zesto Corp.’s owner, Amb. Alfred Yao, announced its successful acquisition of Asian Spirit and South East Asian Airlines or Seair.
In the banking industry, several institutions are heeding the call of the Bangko Sentral ng Pilipinas (BSP) to consider mergers in order to establish more financially stable banks.
“We might see more bank mergers in two to three years as the Basel II standards are fully implemented in 2010,” Albalate noted.
However, only 22 percent of the firms polled said they will list in the public bourse in the next three years.
“Public listings, of course, have been adversely affected by the bearish stock market since the subprime market collapse,” Greg Navarro, P&A managing partner and CEO said.
“However, several IPO plans are still a go, albeit in a wait-and-see status”, he added.