Article 50, schmarticle 50: UK deal activity is booming, with a flurry of deals so far in 2017
The imminent triggering of Article 50 appears to be having no negative effect on UK mergers and acquisitions (M&A), with several major deals announced in recent weeks.
New figures show British deal activity has been booming since the Brexit vote, and this year especially.
This week’s Bovis bidding war, currently being fought by Galliford Try and Redrow, and a £5bn Wood Group-Amec Foster Wheeler tie-up join a long line of big British deals in 2017.
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Deal levels fell significantly in the lead-up to last year’s EU referendum, and dragged down levels for 2016 as a whole. But Thomson Reuters figures released today suggest the Brexit vote has not had a major negative impact on dealmaking.
Between 24 June, the day after Britons voted for Brexit, and 13 March, Thomson Reuters tracked $353.2bn (£290bn) worth of deals. While this is down 17 per cent on the equivalent period in 2015/16, it is the second highest level for this portion of time in nine years.
Further, UK involvement in M&A in 2017 is up 38 per cent on the same period last year to $68bn.
Read more: This isn’t an M&A bubble: It’s the start of an unprecedented boom
“The UK has many strong global companies who will continue to undertake strategic acquisitions to build value for shareholders,” Ed Byers, head of UK at JP Morgan, told Morning Wire
“We would absolutely expect that to continue – be it Wood Group this week, Reckitt Benckiser two weeks ago, or Microfocus and Melrose last year. On top of this, the risks around the domestic effects of Brexit may also cause UK companies to look to optimise their businesses in the UK.”
He added: “Overall, whether we witness a ‘hard’ or a ‘soft’ Brexit, UK companies will likely continue to be dynamic and look to expand and grow, both organically and through M&A.”