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Key hndings

517 think the global economy is improving, up Irom 227 six months ago.
527 oI companies Iocused on growth, up Irom 417 in Cctober 2012.
497 view credit availability as improving.
727 expect global M&A volumes to improve; 297 expect to do a deal
in the next 12 months.
447 expect valuations to rise in the next 12 months.
8th issue
Outlook AprilOctober 2013
Crowing Iorward
Clobal Capital
Conhdence Barometer
An imperative tc act: seizin hrst-mcver advantae as ccnhdence returns
Expectations for global economic growth, corporate earnings and credit availability are
at some of their highest levels in two years. Normally, this positive sentiment would
LranslaLe inLo siqnilcanL capiLal invesLmenL and M&A acLiviLy.
However, our respondents are gravitating toward lower-risk value-creation and growth
strategies, including organic growth, smaller bolt-on acquisitions, optimizing capital
sLrucLure, sLraLeqic divesLmenLs and more riqorous cosL conLrol and operaLional ellciency.
1he currenL siLuaLion can besL be described as a conldence paradox a disconnecL
beLween conldence and M&A acLiviLy. Prelnancial crisis, economic senLimenL and M&A
activity moved in harmony. However, in the new normal economy, these indicators
are decoupled. Macroeconomic risks, such as Lhe Lurozone crisis, US sequesLraLion and
slowing emerging markets growth, have given companies pause. Consequently, some
of the worlds richest and most mature economies, which would be expected to lead a
recovery, lack conldence wiLhin Lheir borders, lowerinq appeLiLe lor capiLal invesLmenL
worldwide. But companies must not allow risk aversion to become the risk itself.
We may be aL an inlecLion poinL: valuaLion levels and senLimenL suqqesL Lhere is a
window ol opporLuniLy Lo seize lrsLmover advanLaqe in a markeL qaininq momenLum.
HisLory shows LhaL lrsL movers in any economic cycle can creaLe dillerenLial value and
position themselves for sustained market leadership. Now is the time to invest and
grow forward.
Pip McCrostie, Clobal Vice Chair, Transaction Advisory 5ervices
Cur eighth Clobal Capital Conhdence Barometer shows a
clear rebound in corporate conhdence. AIter years oI
conservative decisionmaking, executives are steadily
trending toward an investing agenda. But are companies
being bold enough?
About this survey
1he Clobal CapiLal Conldence BaromeLer
is a regular survey of senior executives
from large companies around the world,
conducted by the Economist Intelligence
UniL (LlU). Our panel comprises selecL
LrnsL & Younq clienLs and conLacLs and
reqular LlU conLribuLors. 1his snapshoL ol
our lndinqs qauqes corporaLe conldence
in Lhe economic ouLlook, and iL idenLiles
boardroom trends and practices in the way
companies manaqe Lheir CapiLal Aqenda.
PrchIe cf respcndents
Panel ol almosL 1,600 execuLives
surveyed in February and March 2013
Companies lrom 50 counLries
Respondents from more than
20 secLors
79^ CLO, CFO and oLher Clevel
respondents
912 companies would qualily lor Lhe
ForLune 1000 based on revenue
The CapitaI Aenda
Based around four dimensions, it helps
companies consider their issues and
challenges, understand their options and
make more informed capital decisions.
1. Preserving capital: reshaping the
operational and capital base
2. Optimizing capital: driving cash
and working capital and managing
the portfolio of assets
3. Raising capital: assessing future
capital requirements and funding
sources
4. Investing capital: strengthening
investment appraisal and transaction
execution
51%
cf respcndents beIieve the IcbaI eccncmy is
imprcvin, ccmpared with 22X in Dctcber 2012
51%
cf respcndents are pcsitive abcut
ccrpcrate earnins, ccmpared with 30X
in October 2012
What is ycur perspective cn the state cf the IcbaI
eccncmy tcday?
31%
47%
22%
Oct-12
13%
36%
51%
Apr-13
20%
28%
52%
Apr-12
Improving Stable Declining
27%
44%
63%
23%
38%
52%
30%
44%
51%
26%
30%
49%
15%
5%
32%
Economic
growth
Employment
growth
Corporate
earnings
Credit
availability
Short-term
market
stability
Apr-12 Oct-12 Apr-13
% positive view
PIease indicate ycur IeveI cf ccnhdence in the fcIIcwin at
the global level
40%
21%
17%
5%
17%
Spain
France
Italy
Netherlands
UK
Ccuntries with the mcst neative view cf their IccaI
economy relative to the global economy*
` PercenLaqepoinL spread beLween local and qlobal economic senLimenL
Ccuntries with the mcst pcsitive view cn the IcbaI eccncmy
65%
64%
58%
54%
63%
53%
50%
42%
35%
44%
Japan
France
Germany
UK
China
Australia
Brazil
US
India
South Korea
2
Economic outlook
Ccnhdence spans Ieadin eccncmic indicatcrs
Our respondenLs' increased conldence spans several leadinq
economic indicaLors. AL 637, posiLive senLimenL Loward qlobal
economic qrowLh is aL iLs hiqhesL level in Lwo years. More Lhan
half of the respondents are positive on corporate earnings and
employmenL qrowLh. Conldence abouL crediL availabiliLy has
also increased siqnilcanLly over Lhe lasL six monLhs, and
short-term market stability has more than doubled.
These increasingly positive views, coupled with favorable
sentiment about the regulatory environment for business
growth, would normally signal an increase in both capital
invesLmenL and M&A. However, conldence is noL LranslaLinq
into action.
Rebcund in IcbaI eccncmic ccnhdence
Overall economic conldence has improved siqnilcanLly lrom
OcLober 2012. ln LoLal, 877 view Lhe economy as eiLher sLable
or improvinq up lrom boLh six monLhs aqo (697)
and April 2012 (807).
While qlobal economic senLimenL has improved siqnilcanLly,
some ol Lhe world's mosL maLure economies lack conldence
wiLhin Lheir borders, which has likely had an adverse inluence
on capiLal invesLmenL and M&A.
CIcbaI CapitaI Ccnhdence Barcmeter
Oct-12 Apr-13 Apr-12
13%
59%
28%
10%
48%
42%
12%
47%
41%
Q Create jobs/hire talent
Q Keep current workforce size
Q Reduce workforce numbers
With reard tc empIcyment, which cf the fcIIcwin dces
ycur cranizaticn expect tc dc in the next 12 mcnths?
Viewpoint
The rcwth diIemma
When does risk aversion itselI become a risk?
Cver several Barometers, we have observed a disconnect
between macroeconomic conditions and corporate action
improving conhdence and strong deal Iundamentals have
not led to a rebound in M&A.
This corporate caution is understandable. The global
hnancial crisis has been drawn out, with moments that
suggested turnaround that never materialized. Amid this
persistent crisis environment, the current generation oI
corporate leaders has largely pursued growth through
organic measures or optimization eIIorts. They have largely
been rewarded by boards Ior these conservative instincts.
However, we may be nearing the point where this sustained
caution itselI becomes risky. Crganizations in search oI
growth may need to take an inIormed risk to achieve
their strategic ob|ectives and to outpace competitors.
Firstmover advantage is a constant, even in today's markets.
Leading companies are laying the groundwork Ior taking
action when the time is right. That means honing their
Capital Agenda: hnetuning the capital structure, dehning
core businesses, executing divestments when necessary, and
putting in place proper risk management and governance.
Most important, it means answering the questions, "Where
do you want to grow?" and "What will it take?"
3%
16%
11%
5%
65%
More than 5%
3%5%
1%3%
Zero growth
Negative growth
By hcw much dc ycu think cr expect the IcbaI eccncmy
tc rcw in the next 12 mcnths?
39%
38%
23%
Stagnation in
the Eurozone
Slowing growth
in emerging
markets
US debt ceiling
challenges
What dc ycu beIieve tc be the reatest eccncmic risk tc
ycur business cver the next ~12 mcnths?
65%
cf respcndents expect the IcbaI eccncmy
tc rcw by 1X~3X
42%
cf respcndents expect tc create jcbs cr hire
taIent, ccmpared with 2X in Dctcber 2012
3
Lcw sinIe-diit eccncmic rcwth anticipated
ln LoLal, 8^7 ol respondenLs expecL Lo see some qrowLh in Lhe
global economy, but most recognize it is unlikely to reach peaks
lasL seen in 200607. 1he economic uncerLainLy LhaL lollowed
that period has been so long and pervasive that typical cyclical
behaviors have changed.
Global economic risks persist
Global market risks are well known by corporate boards.
Eurozone issues and slowing growth in emerging markets pose
material challenges to their businesses. In response, many
companies have adjusted their strategies to compensate for
these risks, while others view them as a source of opportunity.
Jcb creaticn sinaIs pIanned rcwth
Forty-two percent of respondents expect to hire talent or
creaLe |obs a sLronq improvemenL lrom 287 in OcLober 2012.
Even more encouraging, plans for workforce reduction are at
107, Lhe lowesL Lhey have been in Lwo years.
CIcbaI CapitaI Ccnhdence Barcmeter
Oct-12 Apr-13 Apr-12
Q Improving
Q Stable
Q Declining
30%
44%
26%
14%
37%
49%
25%
45%
30%
PIease indicate ycur IeveI cf ccnhdence in credit
availability at the global level
51%
50%
46%
33%
31%
32%
12%
13%
16%
4%
6%
6%
Less than 25%
25%49.9%
50%74.9%
75%100%
Apr-12 Oct-12 Apr-13
What is ycur ccmpany's current debt-tc-capitaI ratic?
Oct-12 Apr-13 Apr-12
33%
49%
18%
33%
43%
24%
34%
45%
21%
Q Increase
Q Remain constant
Q Decrease
Hcw dc ycu expect ycur ccmpany's debt-tc-capitaI
ratic tc chane cver the next 12 mcnths?
Tcp hve ccuntries with the hihest pcsitive view cn
IcbaI credit avaiIabiIity
1. China
2. U5
3. Australia
4. Canada
5. Japan
24%
cf respcndents pIan tc increase their
debt-tc-capitaI ratic ~ up frcm
1X six mcnths ac
49%
cf respcndents view credit avaiIabiIity as
imprcvin, ccmpared with 2X in Dctcber 2012
4
Access to capital
Credit increasinIy avaiIabIe
In addition to having an improved outlook on the global
economy, companies are more conldenL Lhan ever abouL Lheir
ability to access the credit markets.
When asked about credit availability, almost half of respondents
see improvemenL, Lhe hiqhesL level in Lwo years. Only 1^7
reporL a decline aqain, Lhe lowesL level in Lwo years.
CIcbaI CapitaI Ccnhdence Barcmeter
Appetite fcr Ieverae rcws
We may be near an inlecLion poinL, wiLh companies' larqescale
changes to capital structure now nearing completion. Debt-to-
capital ratios remain fairly constant today, but the appetite for
leverage is expected to accelerate over the next year. However,
the question remains why organizations are not already taking
greater advantage of available credit.
25%
20%
22%
24%
21%
21%
21%
41%
31%
18%
13%
16%
12%
5%
10%
Extend maturity
(short-term
debt ratio)
Reduce
interest cost
Optimizing the
capital structure
(non-stressed
situation)
Retire
maturing debt
Remove
restrictive
covenants
Apr-12 Oct-12 Apr-13
What wiII be the primary purpcse cf ycur rehnancin?
29%
cf ccmpanies expect tc rehnance Icans cr
debt cbIiaticns
Viewpoint
Credit avaiIabiIity as Ieadin indicatcr
Cur survey shows a higher number oI companies expecting
an increase in their debttocapital ratio, Irom 187 in
Cctober 2012 to 247 in this Barometer. Coupled with a
large increase in those citing greater overall availability oI
credit (Irom 27 to 497), this signals that respondents'
appetite Ior leverage is poised to rise.
Throughout the economic crisis, companies in preservation
mode came to view the use oI credit as negative. But the
reputation oI credit, like the economy at large, is slowly being
rehabilitated. AIter several Barometers in which more than halI
oI respondents had low debttocapital ratios, in this issue
that metric Ialls to 47.
At a time oI ample credit availability and historically low
pricing, leading companies are coming to view credit as a
tool to Iuel their growth agenda.
Oct-12 Apr-13 Apr-12
20%
38%
42%
16%
30%
54%
18%
39%
43%
Q Cash
Q Debt
Q Equity
What is the IikeIy primary scurce cf ycur ccmpany's deaI
hnancin in the next 12 mcnths?
5
Dces ycur ccmpany pIan tc rehnance Icans cr cther debt
cbIiaticns in the next 12 mcnths?
For Lhe nexL 12 monLhs, Lhose companies LhaL plan Lo relnance
debL (297) say Lhey will locus on relnemenLs, includinq reducinq
interest rates, extending maturities and removing covenants.
Cash dcminates near-term deaI hnancin
1he predominanL use ol cash Lo lnance LransacLions is
indicative of companies ongoing cautionary mindset.
More Lhan hall ol respondenLs poinL Lo cash as Lheir primary
source ol deal lnancinq over Lhe nexL 12 monLhs. Less Lhan
oneLhird say Lhey plan Lo use debL (307) as Lheir primary
source, despite reporting abundant credit availability.
Companies reluctance to leverage their own equity may be a
symptom of volatility in the capital markets.
CIcbaI CapitaI Ccnhdence Barcmeter
Oct-12 Apr-13
25%
3%
31%
41%
15%
2%
31%
52%
Q Growth
Q Cost reduction and
operational eIhciency
Q Maintaining stability
Q Survival
What is the primary fccus cf ycur ccmpany's cranic
rcwth cver the next 12 mcnths?
30%
19%
More rigorous
focus on core products/
existing markets
New sales channels
Lcwer risk
14%
12%
9%
16%
Exploiting technology
to develop new
markets/products
Changing mix of existing
products and services
Increasing R&D/product
introductions
Investing in new
geographies/markets
Higher risk
Apr-11 Oct-11 Apr-12 Oct-12 Apr-13
51%
49%
52%
41%
52%
% focused on growth
Which statement best describes ycur cranizaticn's fccus
cver the next 12 mcnths?
!f ycur ccmpany has excess cash tc depIcy, which cf
the fcIIcwin wiII be ycur ccmpany's fccus cver the
next 12 mcnths?
Apr-12 Oct-12 Apr-13
45%
36%
50%
14%
13%
16%
Organic growth
(e.g., investing in
products, capex,
talent retention, R&D)
Inorganic growth
(e.g., acquisitions,
alliances, JVs)
!nvest in rcwth
11%
12%
11%
6%
8%
5%
24%
31%
18%
Pay down debt
Pay dividends
Buy back stock
Return tc stakehcIders

Crowth
Appetite fcr rcwth rebcunds
As conldence in Lhe qlobal economy reLurns and crediL
availability improves, companies are reporting an increased
appetite for growth and a steady move toward investment.
When asked abouL Lheir companies' locus over Lhe nexL 12
monLhs, more Lhan hall ol respondenLs (527) ciLed qrowLh
more than all other responses combined, and a major rebound
lrom OcLober 2012. Lven amid Lhis qrowinq opLimism, nearly
oneLhird ol companies (317) remain locused on cosL reducLion
and operaLional ellciencies. Companies locused on eiLher
sLabiliLy or survival have decreased siqnilcanLly.
PIans fcr excess cash shift tcward
rcwth strateies
Companies with excess cash are deploying it toward growth
and away lrom reLurninq iL Lo sLakeholders. ln LoLal, 597 ol
respondents are pursuing either organic or inorganic growth
with their excess cash; organic growth continues to be the
ma|or prelerence (^57). Only ^17 in LoLal say Lhey are
locused on reLurninq cash Lhrouqh payinq down debL,
payinq dividends or buyinq back sLock a drop ol 10
percenLaqe poinLs since OcLober 2012.
Dranic rcwth driven by baIanced risk pcrtfcIic
Companies are larqely locused on lowerrisk qrowLh sLraLeqies
much more cautious approaches than one would expect, given
increased conldence and crediL availabiliLy. 1his has become
Lhe "new normal" in Lhe posLlnancial crisis world: qrowLh
activities perceived as higher-risk are more cautiously pursued.
Companies will want more and longer-lasting evidence of an
upturn before making major investments.
CIcbaI CapitaI Ccnhdence Barcmeter
Which best describes ycur cranizaticn's fccus cver
the next 12 mcnths?
Hcw dc ycu think the bcardrccm aenda at ycur ccmpany
has chaned frcm a year ac?
Greater focus today
Apr-13
Stayed the same
Less focus today
65% 25% 10%
63% 27% 10%
9% 30% 61%
12% 33% 55%
12% 38% 50%
12% 39% 49%
16% 39% 45%
19% 41% 40%
d n a y c n e i c h f E
cost control
Risk
management
Capital
allocation
Regulatory
issues
Investor
relations
Growth
innovation R&D
Growth
new geographic
markets
17% 36% 47%
People
(attracting/
retaining talent)
Corporate
governance*
* Only asked in April 2013
Viewpoint
Bcardrccms baIancin cvernance and rcwth
Boardrooms are currently Iocused on the Iundamentals:
eIhciency, cost control, risk management, capital allocation,
regulatory issues, investor relations and corporate
governance. All oI these agenda items, which were cited by
halI or more oI our respondents, point toward companies
building greater stakeholder accountability.
Piskier growth measures, including research and
development, are lower on the agenda. However, the
hndings in this Barometer point to a window oI opportunity
Ior accelerated growth. Economic conhdence, credit
conditions and valuations along with a recent rise in
shareholder activism all signal an imperative to act.
Prudent discipline and governance are necessities. But now
may be the time Ior boards to achieve hrst mover status. Apr-13
Apr-13
40%
Oct-12
38%
Apr-12
32%
9%
Oct-12
10%
Apr-12
13%
Apr-13
27%
Oct-12
30%
Apr-12
31%
Apr-13
24%
Oct-12
22%
Apr-12
24%
P
r
e
s
e
r
v
i
n
g
O
p
t
im
i
z
i
n
g
R
a
i
s
i
n
g
I
n
v
e
s
t
i
n
g
The
Capital
Agenda
7
!nvestin dcminates the CapitaI Aenda
Companies expecL Lheir CapiLal Aqenda prioriLies Lo conLinue
Lo move Loward invesLinq over Lhe nexL 12 monLhs. 1heir locus
on invesLinq has moved sLeadily upward over Lhe lasL year (now
aL ^07), while plans Lo preserve, opLimize and raise capiLal
have held steady or declined slightly. While companies are
repositioning toward an investment mindset, they continue to
pursue organic growth and portfolio-optimization strategies.
CIcbaI CapitaI Ccnhdence Barcmeter
3%
69%
23%
5%
Return to
historic highs
Improve
Remain the same
Decline
What is ycur expectaticn fcr IcbaI M&A/deaI vcIumes
in the next 12 mcnths?
Apr-11 Oct-11 Apr-12 Oct-12 Apr-13
38%
41%
31%
25%
29%
Do you expect your company to pursue acquisitions in the
next 12 mcnths?
39%
30%
35%
50%
37%
40%
32%
29%
34%
Likelihood of
closing acquisitions
Quality of
acquisition
opportunities
Number of
acquisition
opportunities
Apr-12 Oct-12 Apr-13
LeveI cf ccnhdence at the IcbaI IeveI
7 respondents positive
What is the expected deaI size?
Oct-12 Apr-13
46%
38%
9%
7%
53%
35%
6%
6%
Over US$1b
US$501m~US$1b
US$51m~US$500m
US$50m or less
Sectcrs with hihest expected acquisiticn activity
1. Technology
2. Automotive
3. LiIe sciences
4. Consumer products
5. Cil and gas
53%
expect tc dc deaIs between US$51 miIIicn and
US$500 miIIicn in the next 12 mcnths, up
frcm 4X frcm Dctcber 2012
8
Mergers and acquisitions outlook
Bias tcward smaIIer deaIs as
conservatism persists
Consistent with sentiment over the past six months, deals
are likely to remain smaller in size despite record amounts of
available cash and improvinq crediL condiLions. ln LoLal, 887
of respondents planning acquisitions expect deals to be under
USS500 million. 1he pursuiL ol smaller LransacLions aliqns wiLh
companies overall strategy toward organic growth and lower-
risk sentiment.
SecLors likely Lo see Lhe mosL acLiviLy are Lhose providinq
qrowLh opporLuniLies in emerqinq markeLs and NorLh America.
1he improvemenL in acquisiLion plans (297) is larqely driven
by an increasing number, and a higher quality, of acquisition
opportunities. Thirty-nine percent of companies say there are
qualiLy acquisiLion opporLuniLies available, compared wiLh 307
six monLhs aqo; 507 leel more conldenL abouL Lhe number ol
opporLuniLies available, versus only 377 six monLhs aqo.
Twenty-nine percent of respondents expect their company will
pursue one or more acquisiLions in Lhe nexL 12 monLhs.
CIcbaI deaI vcIumes and appetite expected
to improve
1here is a sLronq consensus qlobal M&A volumes will increase
as conldence in Lhe overall economy climbs. ln LoLal, 727 ol
companies expect global deal volumes to improve over the
nexL 12 monLhs.
CIcbaI CapitaI Ccnhdence Barcmeter
What dc ycu expect the price/vaIuaticn cf M&A assets
tc dc cver the next 12 mcnths?
Oct-12 Apr-13 Apr-12
27%
42%
31%
7%
49%
44%
18%
41%
41%
Q Increase
Q Remain at current levels
Q Decrease
Dc ycu beIieve the vaIuaticn ap tcday between
buyers and seIIers is .
64%
68%
82%
27%
25%
13%
9%
7%
5%
Apr-12 Oct-12 Apr-13
2130% Over 30% 20% or less
Viewpoint
A pcssibIe inBecticn pcint in asset vaIuaticns
A contributing cause to the ongoing slowdown in deal
making is a perceived gap in asset valuations between
buyers and sellers. Companies pursuing divestments are
seeking high valuations Ior their assets, while potential buyers
are primed Ior discounts and reluctant to pay a premium.
However, we may now be nearing equilibrium between what
buyers will pay and what sellers will accept. This equilibrium
is vital, signaling the deal markets are at an inhection point
and ready to rebound. The pendulum is primed to swing the
other way toward growing prices by buyers and more
prohtable exits Ior sellers. This also suggests a comeback in
market Iundamentals, corporate health and a stable
Ioundation Ior dealmaking.
With 447 oI respondents expecting M&A assets to increase
in value over the next 12 months (and only 77 anticipating
a decrease), companies should consider taking advantage oI
this inhection point now.
44%
cf respcndents expect vaIuaticns tc increase
cver the next 12 mcnths, ccmpared with 31X
in October 2012
9
Valuations increasing
Expectations for increased valuations are now at their highest
level in Lhe hisLory ol our BaromeLer: ^^7 ol companies
expecL prices/valuaLions Lo rise in Lhe nexL year, up lrom 317
in OcLober 2012. JusL 77 ol companies expecL valuaLions Lo
decline, compared wiLh 277 six monLhs aqo, suqqesLinq Lhe
market has stabilized.
MosL respondenLs (827) say Lhe valuaLion qap is 207 or less,
compared wiLh 687 in OcLober 2012. However, while valuaLion
gaps are narrowing, this trend is not expected to continue over
Lhe nexL year, as 797 ol respondenLs expecL Lhe qap Lo widen
or stay the same.
CIcbaI CapitaI Ccnhdence Barcmeter
Which statement best describes ycur apprcach tc
M&A in thcse emerin markets which are experiencin
sIcwin rcwth?
31%
45%
14%
5%
5%
We remain optimistic and have
not changed our approach
We remain optimistic
but will apply further rigor
We are less optimistic and are
reconsidering our strategies
We are less optimistic and
have turned our attention
more toward developed markets
We have discontinued our emerging
markets strategies for now
Tcp investment destinaticns
Oct12
1. China
2. U5
3. India
4. Brazil
5. Cermany
Apr13
1. China
2. India
3. Brazil
4. U5
5. Canada
Top inbound investors
1. South Korea
2. Mexico
3. Canada
Top inbound investors
1. US
2. Australia
3. UK
Top inbound investors
1. US
2. South Korea
3. Australia
Top inbound investors
1. US
2. South Korea
3. UK
Top inbound investors
1. US
2. Spain
3. South Korea
4. US
5. Canada
1. China
2. India
3. Brazil
10 CIcbaI CapitaI Ccnhdence Barcmeter
DeaIs tc span deveIcped and emerin markets
Investment destinations continue to evolve as companies
challenge their growth strategies and underlying risk tolerance.
1he Lop lve counLries include boLh emerqinq and developed
markeLs: China, lndia, Brazil, Lhe UniLed SLaLes and Canada.
1his is a shilL lrom six monLhs aqo, when Lhe US ranked second
behind China, and Cermany rounded ouL Lhe Lop lve insLead ol
this years new entrant, Canada.
Companies remain optimistic about deals in emerging markets
but are exercising more caution. In light of slowing growth,
almosL 707 ol respondenLs have chanqed Lheir approach Lo
invesLinq in Lhese markeLs, ol Lhose, ^57 say Lhey will apply
further rigor.
lnbound invesLors inLo Lop lve invesLmenL desLinaLions
14%
17%
15%
6~12 months 1~2 years In progress/planning
When dc ycu expect tc initiate ycur next divestment?
* 5ource: EY Global Corporate Divestment Study 2013
Tcp reascns ccmpanies wiII pursue divestments
1. Focus on core assets
2. Enhance shareholder value
3. Paise capital
What fcrm dc ycu expect ycur divestments tc take?
38%
29%
17%
16%
Sale of
business unit
Spinoff/IPO of
business unit
Sale of
entire business
Contribution of
business unit
to joint venture
Life sciences*
Technology
Automotive
Power and utilities
Oil and gas
Mining and metals
Financial services
Consumer products
Diversihed industrial products
*Health care/provider care, pharma, biotech
Prcpcrticns cf seIect industries represented
4%
3%
2%
69%
22%
Family-owned
Government/
state-owned enterprise
Publicly listed
Privately owned
Private equity
portfolio company
What best describes ycur ccmpany cwnership?
26%
31%
26%
17%
$1b to $4.9b
$5b or more
$500m to $999.9m
Less than $500m
What are ycur ccmpany's annuaI IcbaI revenues in US$?
50%
29%
21%
C-level executive
Head of BU/dept.
SVP/VP/director
What is ycur pcsiticn in the cranizaticn?
5urvey
demographics
11 CIcbaI CapitaI Ccnhdence Barcmeter
Divestin fcr vaIue
Divestments are now an established tool for creating
shareholder value. ln LoLal, 297 ol respondenLs
*
either
have a divestment in progress or are planning one in
Lhe nexL 12 monLhs, and nearly hall expecL Lo divesL in
Lhe nexL Lwo years. A sLeady sLream ol divesLmenLs will
provide capital to fuel growth in the future.
ln LoLal, 837 ol Lhe companies planninq divesLmenLs expecL
that those divestments will involve the carve-out of one or more
business uniLs. 1hese LransacLions wheLher sLrucLured as an
ouLriqhL sale, spinoll, lPO or conLribuLion Lo a |oinL venLure
are highly complex and will require companies to employ formal
and rigorous processes around divestment.
Ernst & Young
Assurance | Tax | Transactions | Advisory
2013 EYGM Limited.
All Rights Reserved.
EYG no. DE0399
BSC no. 1304-1059591NY
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Contacts
II you would like to discuss the comprehensive survey results or
those specihc to your sector or geography, please contact your
Ernst & Young advisor or any oI the contacts below.
Name Telephone Email
Global
Pip McCrostie
Global Vice Chair
1ransacLion Advisory Services
+44 20 790 0500 pip.mccrostie@uk.ey.com
Steven Krouskos
Clobal MarkeLs Leader
1ransacLion Advisory Services
+1 212 773 3975 steve.krouskos@ey.com
Americas
Richard M. Jeanneret
Americas Leader
1ransacLion Advisory Services
+1 212 773 2922 richard.jeanneretey.ccm
Eurcpe, MiddIe East,
!ndia and Africa (EME!A)
Joachim Spill
LMLlA Leader
1ransacLion Advisory Services
+49 6196 996 25366 jcachim.spiIIde.ey.ccm
Asia-Pacihc and Japan
John Hope
AsiaPacilc Leader
1ransacLion Advisory Services
+52 24 9997 jchn.hcpehk.ey.ccm
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Japan Leader
1ransacLion Advisory Services
+1 3 452 400 kenneth.smithjp.ey.ccm
AckncwIedements
Our special Lhanks qo Lo Lhe Clobal CapiLal Conldence BaromeLer panel lor iLs
conLribuLion Lo Lhis survey. 1he panel comprises LconomisL lnLelliqence UniL (LlU)
senior execuLives and selecL LrnsL & Younq clienLs and conLacLs who parLicipaLe in
Lhe CapiLal Conldence BaromeLer on a semiannual basis. 1he surveys are conducLed
on an independenL basis by Lhe LlU.

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