UK Companies Bracing For Hot M&A Activity In 2017
Various reports in the UK media are predicting bumper M&A activity for British businesses in 2017.
First up is The Telegraph, who claim M&A activity is going to be “rampant”. That gained the immediate attention of all red blooded rabbits in the UK. The basis of the Telegraph claim is an Ernst & Young report that 51% of firms intend pursuing M&A activity in the next year (up from 48% in Oct 2016). They quote EY as saying that “23pc of global companies said that clarity over the Brexit negotiations timetable since then has increased their chances of investing in the UK.” They quote EY:
“The UK will need to work hard to maintain its position as the Brexit negotiations unfold.”
As British companies move to maximise growth opportunities ahead of the country’s divorce from the EU, there has been an 11pc fall in the number of businesses expecting growth to come from organic sources.
The Scotsman covers the story on the same day adding that “Scottish business output fell to a four-year low of 95.6 in April, down from 95.9 in March”. I guess Brent Crude dropping from $56 at the start of the month to circa $51 at the end of April didn’t help. But, not to worry. Out-law claims that M&A in the oil and natural gas sector has started 2017 off at a “blistering speed”. They quote PwC:
“M&A activity started at a blistering pace, with $49 billion of announced deals in January alone – 40% higher than the total for any of the previous first quarters since 2010, “
And it’s not just ONG. The insurance industry is seeing a “thriving market”, and it’s hot in everywhere from Fintech to Music. Even consulting is seeing volumes reach a nine year high.
On the other side of the pond, there is heavy hiring of M&A bankers in the US and America is preparing for a bumper season. According to the previously mentioned EY report, the US is expected to be second to only the UK for M&A activity in 2017. Apparently, the top five investment destinations in 2017 are the UK, US, France, Germany and Brazil. In that order.
The Guardian says that Brexit was a huge mistake, dammit. All the jobs are going to leave the UK, businesses are going to relocate to Europe, the economy is going to crash, the sky is going to fall on our heads and Kim Kardashian is going to take up UK residence. So go back and re-run that bloody Referendum!