Majority of UK dealmakers say Brexit would be bad for business and study finds EU referendum uncertainty is already taking its toll on M&A

William Turvill
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UK early-stage M&A activity grew by three per cent year on year in the first quarter of 2016 (Source: Getty)

The majority of UK dealmakers believe a so-called Brexit would have a negative impact of mergers and acquisitions (M&A) activity at home and in Europe.

A new survey also suggested uncertainty around the referendum is having a negative impact on early-stage M&A activity in the UK, with growth slowing in the first quarter.

Read more: Dealmakers shrug their shoulders at Brexit in global M&A survey

The Intralinks Deal Flow Predictor, published today, surveyed 1,500 global dealmakers, including 135 in the UK. Some 77 per cent of UK respondents said they thought a Brexit would be bad news for deal activity in the UK and/or Europe.

“In the UK, dealmakers appear more reticent about starting deals, which is a likely result of the pending EU referendum. Over the next quarter, we expect UK early-stage M&A activity to simmer rather than boil until we know the result on 23 June,” said Philip Whitchelo, Intralinks’ vice president of strategy and product marketing.

The study tracked the number of early-stage deals that are in preparation or have reached due diligence stage. On average, the deals are expected to be six months away from announcement.

Read more: Br-entrance or Brexit - UK targeted deals from EU sky high in 2015

The report found year-on-year growth in UK early-stage M&A activity shrunk from 14 per cent in the last quarter of 2015 to three per cent in the first three months of 2016.

The rest of the Europe, Middle East and Africa (EMEA) region was found to be a “safe haven” for deals, with growth of 7.5 per cent found.

The report found strong performances in Benelux, the Nordics, France, Italy and Spain. Meanwhile, the industrials, materials and consumer sectors were found to be the strongest performing.

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