30 year-low for UK domestic M&A deals after Brexit vote

November 30, 2016

Domestic deals since the June 23 referendum where the country voted to leave the European union have totalled US$1 billion (about $1.31 billion), a drop of 62% from the previous comparable period.
Moreover, despite a weak pound which was expected to encourage deal-making from outside the country, foreign buyers spent considerably less on UK companies since the vote. According to Reuters, foreign purchases of British firms have slumped 69%.

Most notable among the inbound deals since the June 23 vote is Japanese diversified tech conglomerate Softbank’s £24.3 billion purchase of chip architecture giant ARM holdings in July. Bankers in the UK were hoping the ARM acquisition signalled greater interest from foreign buyers in British firms due to the weaker pound, Reuters said.

On the opposite end, British firms have poured more to acquire foreign firms since the referendum, increasing spend by 59% to US$88.5 billion, the data reveal. This is the highest outbound M&A spending since 2007 on a comparable basis, said Reuters. However, the news organisation noted that the outbound spending figure is distorted by British American Tobacco’s US$57.8 billion (about $75.65 billion) offer for Reynolds American.
Source: Australasian Lawyer

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