London Remains Highly Sought-After Location for Deals After Brexit
Post-Brexit Boom: UK Remains a Global Hub for Dealmaking
London's financial prowess shines through as the UK witnesses the second-highest level of dealmaking between 2018 and 2024, defying claims of its reduced status post-Brexit. Taylor Wessing and Bayes Business School's recent report reveals an impressive $1.14 trillion worth of mergers and acquisitions in the UK over the six-year period, trailing only the US's near $1.2 trillion total.
The UK's attractiveness as a global market for cross-border deals is evident - London ranks as the second most sought-after destination. The report also reveals that an optimistic three-quarters of dealmakers surveyed are positive about the future of Mergers and Acquisitions (M&A) in the UK.
Emma Danks, Taylor Wessing's head of UK corporate, warns that this optimism among dealmakers might not be enough. "The market's resilience in response to the latest US tariffs highlights how dealmakers are adapting – even as geopolitical shifts and supply chain disruption reshape the playing field," she says. Danks emphasizes that turning confidence into returns requires strategic planning, alignment, and deal-specific integration. She goes on to caution that without a clear strategy, deals can be put at risk.
Two emerging sectors with significant dealmaking potential in the next five years, as suggested by the report, are technology and energy. The report, titled 'Dealonomics', predicts that AI will play a crucial role in enhancing checks on companies and balance sheets, with more senior decision-makers taking a bold approach to technological advancements.
Interestingly, US dealmaking had a sluggish start to the year in 2022 due to trade policy uncertainty, according to LSEG data. However, dealmakers remain highly optimistic about agreements being struck in the US over the next 12 months.
Professor Scott Moeller, a specialist in M&A finances at Bayes, suggests that the recent decline in dealmaking may have served to "build up dry powder" for future buyers. "When the dam breaks and the deal flow begins to pick up again, we can expect to see a significant acceleration as companies look to put these overflowing war chests to good use," he says.
The Shape of Dealmaking to Come
The following sectors are expected to dominate dealmaking and investment activity worldwide over the next five years:
- Healthcare & Medical Services: Portfolio optimization, AI/tech integration, vertical integration, and PE pressure to liquidate investments.
- Technology & Data Infrastructure: Data center construction, AI strategy and regulation, cloud computing demand.
- Financial Markets: Stock splits, market volatility, macroeconomic factors influencing M&A and private equity activity.
These trends may provide valuable insights for decision-makers navigating the rapidly evolving landscape of M&A and investment in the UK and global markets.
- The UK's economy, bolstered by technology and finance, is anticipated to remain a global hub for significant mergers and acquisitions (M&A) over the next five years, as revealed in the 'Dealonomics' report.
- Emma Danks, head of UK corporate at Taylor Wessing, notes that while optimism among dealmakers is high, strategic planning, alignment, and deal-specific integration are crucial to turning this optimism into tangible returns.
- The report predicts that the technology sector, particularly AI, will play a pivotal role in M&A, with senior decision-makers taking proactive approaches to technological advancements.
- As per LSEG data, US dealmaking started sluggishly in 2022, possibly due to trade policy uncertainty, although dealmakers remain optimistic about agreements in the US in the coming 12 months.
- Scott Moeller, a specialist in M&A finances at Bayes, posits that the recent decline in dealmaking may have been an opportunity for future buyers to "build up dry powder," preparing for a significant acceleration in deal flow when the market recovers.
