No-deal Brexit Fears Dent UK M&A Activity

Published date: .

Mergers and acquisitions (M&A) activity targeting the UK has fallen almost 40 per cent on the same period last year, with investors slowing down decision making amid ongoing political turmoil.

Corporate M&A also tumbled to £15.1bn in the second quarter of 2019, its lowest value since the EU referendum according to data from Mergermarket.

Read more: Analysis: Could HKEX’s shock £32bn grab for London Stock Exchange actually succeed?

Sterling’s weakness has also dampened investment abroad, with just £8.4bn spent by UK companies abroad during the second quarter – also the lowest figure since the referendum.

Mergermarket warned that retail was likely to be among the sectors hit hardest by a no-deal Brexit, and had already begun to falter. There have been a total of 86 deals in the UK consumer sector so far this year, the lowest figures since 2010.

“The uncertainty surrounding a no deal scenario has caused a considerable slowdown in dealmaking by UK-based firms,” said Mergermarket research editor Jonathan Kolanowski.

“Many businesses continue to withhold investment given the lack of clarity over the future trading arrangements and the probable downturn the economy will suffer,” he said.

Read more: Cobham shareholder comes out against £4bn takeover deal by US private equity firm

Despite subdued activity across other sectors, a small amount of larger deals helped push inbound M&A to £22.2bn for July and August this year, already above the totals for the first two quarters.

These included Hong Kong tycoon Li Ka-shing’s purchase of pub group Greene King and Just Eat’s £9bn merger with

Main image credit: Getty