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Brexit fails to dampen appetite for UK acquisitions, says survey

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Around one in three major corporations and investors expect to make more acquisitions in the UK after the Brexit vote, a new survey by BCMS said today.

In one of the first industry surveys since the UK voted to quit the European Union, serial acquirers said the referendum result would have no major impact on their appetite for buying UK businesses.

While 20% of serial buyers of companies said the vote would “significantly” affect future acquisitions, along with a further 34% who planned to make “slight” changes, 46% said Brexit would make “no difference at all” to their strategy.

Asked if they expected to be more or less acquisitive in the next two years, 46% expected current volumes to remain the same, with 28% hoping to become more acquisitive, versus only 26% predicting a slowdown in deal-making.

BCMS Chief Executive Steve Dally said: “With so much uncertainty in the marketplace, it is encouraging to hear that most acquirers expect to carry on doing deals and investing, albeit in a more cautious business environment.

“Many of the companies we spoke to depend heavily on acquisitions to sustain growth, and with the vast majority of smaller UK businesses not trading with the EU, we don’t foresee M&A levels dropping dramatically in the foreseeable future.

“Of our UK clients sold to overseas buyers in the last 12 months, not one was acquired for single market access reasons. And of the UK businesses we’ve sold so far this year, each had an average of three separate bidders.

“So despite the gloomy headlines, overseas acquirers are clearly still interested in buying good quality businesses in the UK. Indeed, the current weaker pound and talks of lower corporation tax makes acquiring asset-based UK businesses even more attractive for overseas acquirers.”

The survey asked 50 acquirers included listed corporations, private equity funds, and private investors based in the UK or with existing UK subsidiaries.

The poll was conducted in the week to July 7 2016.

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Posted Jul 2016
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