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Corporate deal-making slows down in wake of Brexit

By Holly Williams

Published 12/08/2016

Warning: Intralinks’ Philip Whitchelo
Warning: Intralinks’ Philip Whitchelo

Brexit uncertainty has hit corporate deal-making in the UK, as figures show a sharp fall in merger and acquisition activity since the vote to leave the European Union.

The latest Intralinks Deal Flow Predictor report shows early stage M&A activity fell by 1.4% in the three months to June 30 and as much as 7.4% in the month since the Brexit decision.

This compares with a 15.7% surge in activity across the Europe, Middle East and Africa region in the second quarter and a 19.8% jump, excluding the UK, in the month after the referendum.

Intralinks monitors transactions in the preparation stage or those that have reached due diligence - which are generally around six months off from being announced.

Philip Whitchelo, vice president of strategy and product marketing at Intralinks, said UK firms "may have too much risk attached for some acquirers, despite their relative attractiveness after the sharp drop in the value of the pound".

But despite the findings, there have already been a number of deals since the EU referendum, and not all have been put down to Brexit bargain-hunting.

SoftBank's £24bn mega-takeover for Apple chip maker ARM Holdings last month showed "Britain is open for business", according to Theresa May.

The Prime Minister was quick to declare that the swoop by the Japanese firm for one of the UK's biggest technology companies proved the country remained as attractive as ever to overseas investors.

And it came despite a rise in ARM's shares after the Brexit vote, thanks to its revenue stream outside the UK.

Other deals include South African retailer Steinhoff International's takeover of Poundland, which was announced after the referendum, although discussions were under way long before the vote.

Cinema chain Odeon & UCI was also snapped up by US firm AMC Entertainment for £921m in the same week.

Belfast Telegraph

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