“You just have to get on with things”: UK dealmaking is off to its best start to a year since 2008
UK dealmakers have had a flying beginning to the year, with 2017 marking the best annual start for British mergers and acquisitions (M&A) activity since 2008.
After Reckitt Benckiser’s offer for Mead Johnson Nutrition, the total value of deals involving UK parties so far this year has reached $34.9bn (£27.8bn), according to Thomson Reuters.
Read more: After subdued 2016, these bankers are calling a 2017 bounceback for UK M&A
Thanks to deals such as Tesco’s £3.7bn merger deal with Booker Group and Shell’s North Sea sales, the total value of deals involving UK firms is up by more than 260 per cent from $13.3bn in the same period in 2016.
It is also the highest figure for 2 February since 2008, when $42.5bn of deals had been announced.
After a somewhat subdued 2016, when uncertainty around Brexit hit deals, M&A advisers are hoping for more active 2017.
Dwayne Lysaght, head of UK M&A at JP Morgan who is advising Booker on its merger with Tesco, told Morning Wire: “While companies and markets don’t like uncertainty there does come a point when you just have to get on with things, and despite the turmoil around Brexit, the UK M&A market remains one of the most open, structured and transparent in the world.
Read more: These are the bankers and advisers working on the £3.7bn Tesco-Booker deal
I think Brexit will mean that UK companies have to become more dynamic internationally and they’ll look for opportunities for expansion around the world.
The fall in sterling has made it more attractive to buy British companies so I think we could continue to see foreign companies interested in buying or partnering with UK domestic companies, and particularly those with a global footprint and world-class capabilities.