Global M&A activity tumbles 25 per cent as UK loses its appeal with EU referendum looming

 
William Turvill
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UK-targeted M&A deals value has reached $45.9bn in the first quarter of 2016 (Source: Getty)

The UK appears to be losing its mergers and acquisitions (M&A) appeal in 2016.

UK-targeted M&A activity has fallen 39 per cent year on year in the first quarter to $45.9bn (£32.6bn), according to a global report from Dealogic.

The fall in UK-targeted M&A has been linked to the looming EU referendum and a weakened pound.

Read more: EU referendum contributing to "major pause" in UK M&A

Dealogic's first quarter report, made up of preliminary figures, found global M&A has fallen 25 per cent on the same period in 2015 to $701.5bn.

This followed three successive quarters in which total deals value exceeded $1 trillion in a record-breaking year for global M&A.

So far in 2016, technology has been the top sector for deals, with $100.3bn worth announced.

This is up 10 per cent year on year and marks the sector's best first-quarter performance since 2000.

Read more: Here's why 2015 has been such a bumper year for M&A

Healthcare M&A, meanwhile, was down 56 per cent year on year to $58.7bn.

The report also highlighted that China's outbound M&A volume for the quarter - $104.3bn – is already approaching the record annual volume recorded last year of $106.4bn. China-targeted M&A, meanwhile, fell by seven per cent to $97.3bn.

The United States remained the top-targeted nation, with $248.7bn of deals announced. But this was down 40 per cent on the first quarter of 2015.

Deloitte also reported a "major pause" in UK M&A activity this week.

Iain Macmillan, head of global M&A at the firm, said: “Interest from overseas buyers in UK businesses remains. However, market volatility, the weakening of the pound and the upcoming European referendum are causing a major pause in domestic and outbound dealmaking.”

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