Monday 10 October 2016 1:00 am

Megadeath to megadeals as EY sees recovery in UK M&A activity in the third quarter despite Brexit uncertainty

THE value of UK M&A in the third quarter increased from the previous quarter despite Brexit uncertainty, according to EY which predicts the end of the so-called megadeal.

Data released today by EY shows that the overall value for UK M&A reached $78.3bn, up from $25.7bn in the previous quarter, driven largely by international deals. However, the volume of activity saw a slight drop to 705 deals from 719 in the previous quarter.

Michel Driessen, EY’s transaction advisory services markets leader for UK & Ireland, said: “Despite a bumpy start to the summer, UK M&A activity seems to have taken Brexit related uncertainty in its stride so far. Businesses are getting accustomed to a period of sustained low growth, low interest rates and cheap debt.”

He added that for M&A this spelt the end of the megadeal: “For M&A activity this means a move away from the string of large, so-called mega deals, of the past two years to a more balanced approach that sustains healthy levels of activity.”

According to EY analysis, the last quarter saw 189 inbound transactions worth $53.5bn, and 139 outbound deals worth $18.4bn. This compares favourably during the second quarter, during which saw inbound M&A activity raising $13.4bn and outbound deals worth $3.8bn.

The picture is slightly different in the domestic M&A market with 377 deals generating $6.4bn in the past three months, compared with 396 deals worth $8.3bn in the second quarter.