Confidence amongst UK CEOs grows with majority looking to M&A now
Business confidence amongst UK CEOs is growing, despite ongoing geopolitical and macroeconomic challenges. According to a new EY-Parthenon survey of company leaders, more than three-in-five are planning M&A moves over the coming 12 months.
Silvia Rindone, UK&I managing partner for strategy and transactions, commented, “With M&A activity set to rebound in 2025, driven by strategic imperatives, digital innovation, and a more favourable regulatory climate, business leaders must prioritise diligent, data-driven investment decisions to capitalise on emerging opportunities.”
The survey evaluates optimism levels and provides insights on capital allocation, investment and transformation strategies – and the willingness to spend on new acquisitions is a key indicator of that. Suggesting things were looking up in that regard, a 99% majority said they expect to actively pursue transaction initiatives over the next 12 months – and 62% of those would be looking at M&A, a dramatic jump from 40% in September 2024, and back on-par with global CEO sentiment.
At the same time, CEOs seem more confident in UK businesses, when it comes to finding new partners. The UK remains the top destination for capital investment, with 52% of UK CEOs planning to invest domestically over the next year, followed by 20% investing in the United States and 18% in France.
Overall, the survey found that 82% of UK CEOs felt very or somewhat optimistic about the business landscape over the next 12 months, an increase from 67% in September 2024. In particular, as is often the case, CEOs are most confident in their own prospects – with 78% feeling optimistic about revenue growth, 80% about profitability, and 77% about maintaining a competitive position in the next 12 months.
However, that is not to say there are no risks on the horizon. A 71% chunk of respondents said that rapid technological advancements, evolving sustainability agendas and geopolitical tensions will see a shift in compliance being a key strategic factor, separating industry leaders from laggards.
In line with this, UK CEOs acknowledge that their transformation approach needs improvement in certain areas. A 19% portion said they need to increase the speed of transformation, while a similar 18% said they need to improve transformation outcomes through greater collaboration across functions and the c-suite. And 24% said cost and return on investment (ROI) is influencing its organisation’s approach to digital transformation initiatives.
Rindone concluded, “Our latest CEO Outlook reflects a resilient and forward-thinking mindset among UK CEOs. However, with nearly a quarter citing cost and ROI as key factors in shaping their digital transformation strategies, it’s clear that businesses are seeking a balance between innovation and sustainable growth. The coming year will be crucial for organisations to refine their transformation approach and unlock long-term value."
