Yorkshire sees rise in mergers and acquisitions amid Brexit uncertainty

Mergers and acquisitions (M&A) involving UK companies in the second quarter of 2018 significantly dropped largely due to the uncertainty surrounding Brexit, according to the latest Office of National Statistics (ONS) quarterly bulletin.

During the second quarter, the value of inward M&A was reported at £6.5bn, £15.8bn lower than in the previous quarter.

In addition, the values of outward M&A deal fell to £1.9bn in Q2, down from £2.5bn in Q1, which is the lowest level since the third quarter of 2013.

The value of domestic M&A was £4bn Q2, £2bn lower than the previous quarter and the first quarterly decline since Q4 2016.

For Yorkshire and the Humber, however, M&A deals bucked the national trend by rising by 3% in the first half of the year.

Steve Hubbard, corporate finance partner at RSM in Leeds, said: “There seems little doubt that the uncertainty around Brexit is prompting some international acquirers to pause for thought.

“We’ve seen a number of buyers decline opportunities that, in all other respects, are strategically sensible acquisitions. This is undoubtedly due to uncertainty as to the shape of the UK’s future trading relationship with the EU and beyond.”

He added: “By comparison, the Yorkshire and Humber deals market seems to be bucking the trend as activity has risen by 3% in the first half of the year, which is great to see.

“It seems the reticence around uncertainty could be being counterbalanced by the weakness of sterling which creates a perception of relative value. That may well mean international demand for some UK assets remains positive, but this may be scant reward for UK consumers faced with weakened purchasing power.”

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