UK expected to retain strong M&A relationship with the rest of Europe despite Brexit uncertainty

William Turvill
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MPs Debate The Brexit Bill In The House Of Commons
The UK voted to leave the European Union on 23 June 2016 (Source: Getty)

The deals corridor between the UK and the rest of Europe will remain open, despite uncertainty around Brexit negotiations, a report has predicted.

Accountancy firm Deloitte found that the total value of mergers and acquisitions (M&A) between Britain and the rest of the continent more than trebled year-on-year in the first quarter.

While the number of deals dropped, from 212 in the first three months of 2016 to 188 this year, their value increased, from $4.2bn (£3.3bn) to $13.2bn (£10.5bn).

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“In the coming months, we have major elections coming up in France and Germany, in addition to the ongoing Brexit negotiations,” said Iain Macmillan, head of global M&A at Deloitte.

“However, dealmakers are getting used to uncertainty as a feature of the M&A landscape. The data shows they are prepared to make bold moves through M&A, rather than wait and watch how the negotiations play out. This shift in attitude is reflected in our latest chief financial officer (CFO) survey, where only one in 10 CFOs now feel M&A will be slowed down by Brexit.”

The UK finance chief survey, published earlier this month, found that 11 per cent expected M&A activity to decrease over the next three years as a result of the Brexit vote. This was down from 40 per cent immediately after the EU referendum.

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Macmillan added: “The UK economy has proven to be resilient and a recent study shows that London remains the capital for fast-growing European companies.

“Meanwhile, the fall in sterling makes some of these UK-based businesses attractive targets for acquisition.

“All this bodes well for a strong M&A market and we expect the corridor between the rest of Europe and the UK to remain busy this year.”

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