According to the latest findings of the Grant Thornton International Business Report (IBR) 2008, mainland China has the highest number of privately held businesses expecting to grow through acquisition (67%) or IPO (60%) in the next three years, far above the global average. The results indicate that despite the current turbulence in the world financial markets, privately held businesses in mainland China are growing rapidly and seeking fund externally.

Desmond Yuen, Managing Partner of China Practice at Grant Thornton said, "Businesses in mainland China are becoming increasingly sophisticated, international and acquisitive in their outlook. They are focused on building value rather than looking to realise it at this stage and are excited about following their own growth strategies through domestic acquisition and IPO. It is no doubt that Chinese M&A activity is being fuelled by finance available from the equity markets."

On the other hand, 29% of Hong Kong privately held businesses are planning to grow through acquisition in the next three years. 69% of those businesses anticipate a cross-border deal. This result places Hong Kong the first among all the 34 economies surveyed globally. Furthermore, 43% of those Hong Kong businesses are expecting to grow through domestic acquisition.

Alison Wong, Partner at Grant Thornton said, "Whilst privately held businesses may not be conducting headline grabbing deals that catch the public's interest, they are increasingly becoming more confident and successful in transacting internationally. To further expand their market share, Hong Kong businesses expand their businesses through both domestic and cross-border acquisition in order to demonstrate their international capability in the market. Obviously they see international M&A as a key strategic tool to drive growth and further success in their business."

The survey also reveals that business owners in the fast growing BRIC (Brazil, Russia, India and mainland China) economies are now enthusiastically embracing M&A, and indeed are often keener to make acquisitions than businesses from more mature markets. Overall, 59% of businesses surveyed in the BRIC economies said they anticipated an acquisition in the next three years. 47% of surveyed BRIC businesses expected to undergo public listing in the next three years.

"Compare to respondents in the more mature markets such as the US and the UK, a greater proportion of businesses in the BRIC economies are expecting to undertake a public listing in the near future. The findings support the IBR business optimism survey we have conducted previously, which identified business owners from the emerging economies as the most optimistic in the world," Desmond Yuen concluded.