Brexit scare stories fail to spook UK M&A

Intralinks Deal Flow Predictor reveals that UK mergers and acquisitions remain strong despite speculation that Britain could vote to leave the European Union

by the commentator on 25 January 2016 12:21

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Europe, Middle East and Africa (EMEA) is the strongest performing region for global early-stage mergers and acquisitions (M&A), according to new data released by Intralinks. The new Deal Flow Predictor (DFP) report revealed that the UK is outperforming the region, shrugging off concerns over the results of the anticipated EU membership referendum, and a potential “Brexit”.

According to the latest Intralinks DFP, global early-stage M&A activity increased by 8.1 percent year-on-year, with Europe, the Middle East & Africa (EMEA) increasing by 11 percent. Dealmakers targeting the UK remain strong as shown by the 14.9 percent growth in early-stage M&A activity.

“Despite potential concerns over a “Brexit” decision in the anticipated UK EU membership referendum, European dealmakers still appear willing to start deals, which should translate into a higher level of M&A announcements in the first half of this year, compared to the same period last year,” said Philip Whitchelo, Intralinks’ vice president of strategy and product marketing.

“Concerns over a slowing global economy and market volatility mean that the rate of growth in M&A in 2016 looks likely to be lower than in 2015, but it does not indicate that the M&A boom we have witnessed over the past two years is coming to an end in the next six months.”

Dr Liam Fox MP, a former Cabinet Member said “This report shows how wrong the Remain campaign are in their so-called ‘project fear’, which implies that British economy would fail outside the European Union.  It is clear that the financial, regulatory and legal frameworks for business in the UK is what attracts business to the UK not our membership of the EU”.

The Intralinks DFP forecasts the volume of future M&A deal announcements by tracking the number of early-stage M&A deals that are in preparation or have reached the due diligence stage. On average, these deals are six months away from their public announcement. The Intralinks DFP has been independently verified as an accurate predictor of future changes in the global number of announced M&A transactions.

"2015 was a record year for M&A, and today’s release of the Intralinks DFP indicates that the first half of 2016 should show increased levels of M&A announcements compared to the first half of 2015.

This is despite concerns over global economic growth and the volatility of financial markets”, said Whitchelo. “EMEA is also once again proving to be a safe haven for M&A, with the UK outperforming both Germany and France. Dealmakers targeting the UK appear to be shrugging off concerns over a potentially destabilising Brexit decision in the anticipated UK EU membership referendum.”

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