UK's Brexit vote expected to have global impact with fall in M&A deals

 
William Turvill
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British Expats And Germans Discuss Brexit
Eight in 10 UK dealmakers do not expect to be relocated as a result of the Brexit vote (Source: Getty)

The UK’s Brexit vote is expected to hit global mergers and acquisitions (M&A) activity, a new study has found.

Seven in 10 global dealmakers believe that while it remains uncertain when and how the UK will leave the EU, the number of global transactions will fall overall.

And 67 per cent believe that Britain leaving the EU will have a negative effect on global deal volumes for the remainder of this year.

Read more: The impact of Brexit on SME dealmaking? Not a lot it seems

The findings were based on an Intralinks survey of 1,001 global dealmakers conducted in early July.

“M&A levels are very sensitive to any uncertainty in the market. Unprecedented political upheaval in the UK is a cause for concern for dealmakers at the moment,” said Philip Whitchelo, vice president of strategy and product marketing at Intralinks.

Some 82 per cent of British dealmakers surveyed expect the vote to have a negative economic impact on the UK.

And 66 per cent of those surveyed across the world expect there to be a decrease in demand for UK assets over the next six months.

Read more: Private equity boss predicts autumn M&A activity boost for City of London

The survey was conducted before Japan’s SoftBank agreed a £24.3bn takeover deal for Cambridge-based chip maker Arm.

This deal prompted experts to suggest UK companies could become attractive takeover targets in the aftermath of the Brexit vote.

Elsewhere, the survey found that 82 per cent of UK-based participants do not expect to be relocated as a result of the vote.

Whitchelo said: “It’s interesting to see the survey dispel rumours suggesting UK dealmakers are likely to be relocated to other financial centres in the EU, like Frankfurt or Paris. If we see more political stability as time goes on, the impact to dealmakers may not be as cataclysmic as originally anticipated.”

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