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“The year of 2014 witnessed an M&A boom,” says Xu Hua, CEO of Grant Thornton China. “Both the number and the total volume of transaction broke a new record.” While the willingness of potential vendors grows, the percentage ofbusinesses planning to sell up is also on the rise. The proportion of businesses expecting a change in ownership in the next three years rose from 6% to 9% over the past year Confidence in the ability to fund transactions is vital for an active M&A market. While retained earnings (52%) remain a significant source of funding, the proportion of businesses planning to use bank debt to finance deals has risen to 51% from 22% in the last year. The percentage of businesses expecting to finance growth through private equity also increased from 8% to 24%. Meanwhile, despite of the recovery of IPO market, China has seen no increase in the businesses planning to finance deals through publiclisting (14%). “With the further reform of state-ownedventerprises and businesses’ increasing ‘going out’, China’s domestic and overseas M&A markets are both expected to be more active in 2015,” notes Hua. The China Banking Regulatory Commission issued the revised edition of Guidelines for Risk Management by Commercial Banks of Loans Extended for Mergers and Acquisitions, easing some M&A financing restrictions which had troubled businesses. This benefits the businesses which starve for financial support for M&A activities. North America has greatest appetite for acquisition From a global perspective, the IBR reveals that 33% of businesses are planning to grow through M&A overthe next three years, a steady rise from 31% in 2013. North American business leaders remain the most bullish (45%), ahead of Latin America (38%), Europe(32%) and Asia Pacific (22%). Meanwhile, 43% of business leaders seriously considered at least one acquisition opportunity over the past 12 months, up from 39% in the previous period. The proportion of businesses expecting a change in ownership in the next three years rose from 11% to 14% over the past year. Finland (38%) is the most bullish for sell, followed by Latvia (32%) and South Africa (29%). Mining is most bullish industry Regarding to different sectors, mining & quarrying industry is the most bullish industry with 60% of businesses planning acquisition in the next three years, ahead of financial service (53%), electricity, gas & water supply (53%), and agriculture, hunting, forestry and fishing (44%). Transport is the most cautious (26%) sector. (Reporting by CFO Innovation, Asia)]]>