UK domestic M&A deals slump to 30 year low after Brexit vote

[LONDON] The value of merger and acquisition deals between UK companies has plunged 62 per cent to a 30 year-low since the country's vote to leave the European Union, according to Thomson Reuters data, in a sign of the uncertainty gripping businesses.

Domestic deals since the June 23 referendum have totalled US$1 billion, the data show.

Foreign purchases of British firms have also slumped 69 per cent, according to the figures, despite a sharply weaker pound.

Softbank's US$30.7 billion deal to buy UK-based chip designer ARM Holdings in July had sparked hopes among bankers that the fall in sterling might boost dealmaking.

The data also show spending by British companies on foreign deals has leapt by 59 per cent since the Brexit vote to US$88.5 billion, the highest since 2007 on a comparable basis.

But this number is distorted by British American Tobacco's US$57.8 billion offer for US cigarette maker Reynolds American Inc.

2015 was a record year for dealmaking involving UK-listed companies thanks to a series of jumbo deals including Anheuser-Busch Inbev's US$110.3 billion acquisition of SABMiller and Shell's US$53 billion merger with BG Group.

REUTERS