After over three years since the EU referendum, where the UK voted to leave the EU, Boris Johnson signed the Withdrawal Agreement last Friday after the bill was passed to Royal Assent, therefore the UK will officially leave at 11pm (12am in Brussels) on 31st January.
So, what will officially leaving the EU mean for your business and investment into it?
Research by IW Capital, in which it asked 2,000 investors about life post-Brexit and the opportunities that will arise after the 31st January, has indicated that there will be an uptick in mergers and acquisitions. The research suggests that investors are positive about the UK’s prospects out of the EU, with 46% believing that if handled correctly, Brexit could be the best thing to happen to the UK economy. It also showed that 36% of those questioned believed that the UK will be a wealthier country, boosting their investment profile post-Brexit.
It transpires that for 30% of those asked, it was in fact the handling of negotiations that affected investors’ decisions and not Brexit itself, so now that a date has been set and there is more certainty around Brexit, more investors will look to use their capital.
The proposed acquisition of Collins Aerospace’s Military GPS business for $1.9bn, as well as Raytheon’s Airborne Tactical Radios business for $275m by BAE Systems last week has reflected confidence returning to the market. As the largest acquisitions made by the group in over a decade, this has kindled hope for UK M&A, particularly now that there is certainty over the Brexit deadline..
Eamon Brabazon, co-head of EMEA M&A at Bank of America, said: “The UK is definitely seeing M&A catch-up on last year as Brexit-related issues subside. We have seen this in the very strong start to UK M&A in 2020. While another Brexit deadline may come at the end of 2020, it’s not the same risk profile as what we experienced last year.”
The deal also marks a strengthening of UK-US relations, with expectation that further deals will be done between the two countries.
In fact, investor confidence appears to have revived from potential investors worldwide. For example, RDM’s Aurrigo unit, which makes self-driving shuttles for use in shopping centres and for baggage in airports, has seen investors return from the Middle East, North America and Australia.
Overall, M&A over the next year as the UK and EU enter a transition period, looks to be positive, as the certainty over the Brexit deadline has inspired investor confidence.
Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkIntl.com
Europe: Michael Lawrie at +44 (0) 161 359 4400 / Enquiries@BenchmarkIntl.com
Africa: Anthony McCardle at +2721 300 2055 / McCardle@BenchmarkIntl.com
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Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximising solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $6B across various industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 12 offices across the world, have assisted hundreds of owners with achieving their personal objectives and ensuring the continued growth of their businesses.