James Fillingham is transactions services partner at PwC, says Yes
In 2014, the Scottish referendum did give buyers and sellers pause for thought, but that was only part of the story. While M&A was down in the UK, we saw a massive, offsetting increase in IPO activity. We also saw much refinancing with plentiful, cheap debt. Together these meant that potential sellers could achieve liquidity in the absence of a “classical” M&A framework, and the City was busier than ever despite lower headline volumes. The General Election could well slow down “pure play” UK deals in 2015, especially those with a public sector angle. I also expect it to lead to the deferral of some IPO activity. The UK is a European and global capital hub, however. If the domestic market is quiet, that capital will still be looking for a home in 2015, but it might have to look beyond our shores. The scenario I worry about is two elections in 2015 – that really would dent confidence and activity.
Mark Gregory is chief economist at EY, says No
General elections tend to have a limited impact on markets and the economy over a sustained period. While this year’s vote has added uncertainty and may have an impact on some investment activity, M&A is likely to be more influenced by other factors. The low oil price is providing a boost to UK firms and consumers, with the EY ITEM Club upping its 2015 GDP forecast to 2.9 per cent, helping to buoy corporate confidence. The Eurozone is starting to recover and QE will provide much-needed liquidity. These improving prospects present an opportunity for businesses to address their strategies, whether through increased acquisitions or divestments. We also have historically low interest rates and high stock markets, which tend to lead to more transactional activity. The tide appears to be shifting – at the end of last year, M&A value and momentum were moving forward and our sense from the conversations we are having with clients is that corporates are moving into transaction mode.