Seventy per cent of global dealmakers believe that while Britain remains uncertain about when and how it intends to leave the EU, the number of global deals will fall overall, according to a new survey carried out by Intralinks.
The poll of over 1,000 global dealmakers involved in mergers and acquisitions, conducted after the recent EU referendum, also reveals that a 67 per cent believe Britain leaving the EU will have a negative impact on global deal volumes for the remainder of 2016. Furthermore, and contrary to some reports, 82 per cent of UK dealmakers think it’s unlikely they’ll be relocated because of the Brexit decision.
Regionally, 61 per cent of Asia-Pacific (APAC) dealmakers and 54 per cent of North American (NA) dealmakers believe the Brexit decision will have a positive economic impact, or no impact, on their region. Conversely, 73 per cent of dealmakers in Europe, the Middle East & Africa (EMEA) – and 82 per cent of UK dealmakers – believe it will have a negative economic impact on their region.
“A majority of American and Asian dealmakers appear confident that the turbulence in Europe will not negatively impact their respective economies, and it’s very much ‘business as usual’,” says Philip Whitchelo, Vice President of Strategy & Product Marketing at Intralinks. “For example, the APAC region attracts significant inbound investment from foreign investors seeking higher growth opportunities in emerging markets. This means Brexit could easily turn out to be a positive for the region, as acquirers re-direct their attentions from Europe to Asia.”
According to the Intralinks survey, the demand for UK and European assets is at risk post-Brexit. Some 66 per cent of global dealmakers think there will be a decrease in demand for UK assets in the next six months, with the notable exception of Germany where a higher 77 per cent believe there will be a decrease in demand for UK assets in the next six months. Interestingly, 48 per cent of UK dealmakers and 46 per cent of U.S. dealmakers think there will be a decrease in demand for European assets over the same period as well. Overall, 55 per cent of global dealmakers believe deal values in Europe are more likely to decline as a result of Brexit.
Meanwhile, global dealmakers have also made a number of predictions: 61 per cent think it’s likely other countries will leave the EU over the next year, however 38 per cent do not anticipate a global recession because of the Brexit decision.
“M&A levels are very sensitive to any uncertainty in the market. Unprecedented political upheaval in the UK is a cause for concern for dealmakers at the moment,” Whitchelo says. “However it’s interesting to see the survey dispel rumours suggesting UK dealmakers are likely to be relocated to other financial centres in the EU, like Frankfurt or Paris. If we see more political stability as time goes on, the impact to dealmakers may not be as cataclysmic as originally anticipated.”
