M&A bounces back in UK and Europe after "lacklustre" lead-up to Brexit vote

William Turvill
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EU Referendum - Signage And Symbols
The UK voted to leave the European Union on 23 June (Source: Getty)

More deals are on their way to the UK and Europe, after a new study found a sharp rise in early-stage M&A discussions in the quarter after the EU referendum.

Despite continued uncertainty around Brexit and when Article 50 might be triggered, early-stage activity across Europe, the Middle East and Africa (EMEA) was up 13 per cent year-on-year in the third quarter of 2016.

In the UK, helped by a declining pound making British companies cheaper internationally, early-stage M&A was up eight per cent, according to Intralinks’ Deal Flow Predictor.

In the second quarter, leading up to the EU referendum, it had decreased one per cent.

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Globally, the report predicted a three per cent increase in announced deals this year compared with 2015.

"Despite the uncertainty created by the UK’s so-called ‘Brexit’ vote in a June referendum to leave the EU, [EMEA] is easily the best-performing region this year to date for early-stage M&A activity, driven by continued strong levels of asset disposals in Italy, France, Spain and Germany”, said Philip Whitchelo, vice president of strategy and product marketing at Intralinks.

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“Even the UK, where forecasts of a sharp economic slowdown in the aftermath of the Brexit vote failed to materialise in the third quarter, is showing increased levels of early-stage M&A activity (up eight percent year-over-year in the third quarter) after a lacklustre second quarter.”

Commenting on the current M&A climate, Charles Currier, head of corporate at law firm CMS, said: “There’s evidence that the Brexit vote has encouraged senior executives in European corporates and private equity houses to identify undervalued targets in the UK and to regard them as the main buy-side driver of M&A activity over the next few months.”

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