Brexit and Donald Trump expected to hit already falling M&A activity levels

William Turvill
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Dealmakers may be concerned about uncertainty around Brexit and the prospect of Donald Trump as US president (Source: Getty)

Deal values fell significantly in the UK and, to a lesser extent, globally in the first half of 2016.

And mergers and acquisitions (M&A) activity is expected to fall further in the next six months, with Brexit and the prospect of Donald Trump causing uncertainty.

Read more: What Brexit means for UK M&A: Experts expect further drop in activity

According to Dealogic, total UK deal value fell 63 per cent from $194.8bn (£146.6bn) in the first half of 2015 to $72.9bn.

Mergermarket’s statistics for January to June 2016 show the UK was not the only area to see a slowdown in activity. Global M&A deal values fell by 32.7 per cent, from $1.81 trillion in the first half of 2015 to $1.22 trillion.

Andrew Wingfield, a corporate partner at King and Wood Mallesons, said: “With uncertainty over Europe, a higher risk of a break-up of the UK than before the Leave vote and fears of a Donald Trump presidency in the US, these factors are likely to hit M&A activity levels.

Read more: US boutique investment bank shares suffer as Brexit dampens M&A prospects

“M&A is all about confidence, and heightened levels of uncertainty in the UK will dampen boardroom confidence. As a result, it is likely we see many press the pause button on planned acquisitions and disposals.”

Experts at PwC, EY and Mergermarket have also told City A.M. they expect Brexit to lead to a further slowdown in activity.

Brexit Britain: What you need to know

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