British companies feeling bullish

Dealmaking in the UK Set to Eclipse Brexit Concerns

The UK is poised to smash records with deals between the UK and foreign firms taking over Brexit concerns in a sign that British firms are feeling bullish.

In this year alone acquisitions involving British firms have surpassed beyond the $275bn USD mark. Yesterday it was announced that Sainsbury’s is to acquire Walmart’s Asda Unit in a £7.3bn deal which has boosted the supermarkets clout in a saturated and highly competitive environment.

Additionally, the Takeda Pharmaceutical Co is pursuing UK-listed biotech Shire Plc for $64 billion and Britain’s largest pay-TV company Sky is juggling multiple suitors in the two biggest deals through April. Ian Hart, co-chairman of U.K. investment banking at UBS Group AG said that “we continue to see wide-ranging interest in M&A across different sectors of the U.K. market and expect activity to continue to be strong through the rest of the year…It could make 2018 a record year.”

What this is starting to symbolise is that concerns about the long-term economic prospects are beginning to abate. Despite the economic armageddon that was promised throughout the Brexit debate, what we are seeing is a renewed confidence in the British economy and in British companies.

Tom Whelan, a global head of private equity at the law firm Hogan Lovells LLP has suggested that British companies are feeling bullish about global growth and such a trend is likely to have ripple effects:

“If the wave of optimism from U.K. businesses feeling bullish about global growth continues, then we should see this translate into greater deal volume for the rest of this year.”

However, activity for the rest of this year will hinge on companies’ access to new growth opportunities, asset values and changes in the competitive environment. We should see British companies continue to feel bullish as the British government pursues trade deals with other companies.

It’s promising to see such a level of confidence in British business and it bodes well for Britain’s future.