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It’s hard work being a dealmaker in times of uncertainty. Geopolitical tensions around Brexit, US political machinations and heightened election focus in Europe has seen merger and acquisition activity slow down as business take stock of what’s going on around them.
Baker McKenzie partner and head of Asia Pacific Mergers & Acquisitions Group David Fleming says volatile times lead businesses to hesitate and question valuations – although he does expect a bounce in activity in the short term.
“It hasn’t had a lasting impact [on M&A],” he says. “It has created two things which affect M&A activity and that is uncertainty and [a lack of] confidence. “
"I don’t think we’ve seen any longer-term geopolitical implications.” - David Fleming
Fleming says there were a lot of loud news headlines but nothing concrete that would affect activity in the longer term.
“I don’t think we’ve seen any longer-term geopolitical implications that would lead to a change to, for example, multinational strategies toward acquisition,” he says.
The comments come after Baker McKenzie’s Cross-Border M&A Index slipped to 218 in the first quarter of 2017, down 17 per cent on Q4 2016 and 9 per cent year on year.
The study showed 1,238 cross-border deals worth $US331.2 billion occurred over the three-month period, a fall of 18 per cent in volume on the previous corresponding period.
Listen to the podcast above to find out more. We also speak to Mitsubishi UFJ Morgan Stanley Securities Executive Director Jonathan Wallace and Global Head of M&A and Financial Sponsors Research at Dealogic Chunshek Chan.
Leon Gettler is a veteran management journalist
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
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