The UK Government’s intention to trigger the Article 50 process of leaving the European Union (EU) by the end of March has seen a 2 per cent decline in early-stage M&A activity in the UK in Q4 2016, compared to the same period one year prior.
This means announced M&A deals in the UK could decline in Q2 2017.
That’s according to the latest Intralinks Deal Flow Predictor, an accurate forecast of future mergers and acquisitions (M&A) announcements.
“Uncertainty around the government’s exit strategy with the EU is likely to have a chilling impact on inward investment and M&A activity over the two-year negotiation period. This is being reflected in declining early-stage M&A activity, already unable to maintain the momentum that saw a seven per cent post-Brexit-vote jump in Q3 2016,” says Philip Whitchelo (pictured), VP Product Strategy and Marketing, Intralinks.
According to the latest Intralinks Deal Flow Predictor, early-stage M&A activity in Europe, the Middle East and Africa (EMEA) increased by 9 per cent, with the strongest performing countries France (up 28 per cent), Spain (up 24 per cent), Germany (up 17 per cent) and Italy (up 15 per cent). Europe’s largest M&A market, the UK, was a notable exception, declining by 2 per cent. The top three EMEA sectors for YoY growth in Q2 2017 M&A announcements will be Consumer & Retail, TMT (Technology, Media and Telecoms) and Energy & Power.
Year-over-year (YoY) growth in early-stage M&A activity in Q4 2016, which is an indicator of M&A announcements in Q2 2017, grew by seven per cent globally – showing early indications that 1H 2017 is set to be a new record annual first half for M&A announcements. The increase in activity was driven by increased numbers of early-stage transactions in three out of the four global regions: Asia Pacific (APAC, up 44 per cent), Latin America (LATAM, up 11 per cent) and EMEA (up 9 per cent). In North America (NA) early-stage M&A activity declined by 5 per cent.
