Cross-border deals fell sharply in 2019 amid Brexit impasse

There was a fall in the number of cross-border deals involving North West businesses in 2019, Deloitte says, but adds confidence has risen since the election. Tony McDonough reports

Brexit
Brexit caused cross-border deals to plummet in 2019, says Deloitte

 

Cross-border deals involving North West businesses plummeted by 20% in 2019 mind uncertainty over Brexit.

According to a study published by accountant firm Deloitte, there were 96 cross-border deals completed in 2019, worth a total of £2.29bn. This compares to 120 deals in 2018 worth £6.54bn.

However, Deloitte is also reporting a rise in business confidence since the December 12 General Election. The UK formally left the EU on March 31 and, although a trade deal is still to be agreed, the end of the initial impasse has increased the likelihood of deals being agreed.

The research, conducted in partnership with Experian MarketiQ, reveal that inbound investments were most prolific, with 51 deal completed in 2019 worth a total of £1.01bn. This was down from 77 in 2018, valued at £1.41bn. Outbound transactions volumes saw a slight rise on the previous year from 43 to 45, but values dropped from £5.13bn to £1.28bn.

The final quarter of the year saw 14 North West companies acquire overseas assets, worth a total of more than £250m. More than a third of these deals involved a US target, with five transactions completed across the Atlantic.

No other country saw more than one deal, with six deals in Europe (Sweden, Romania, Portugal, France, Spain and the Netherlands), two in Asia (Japan and India) and one in Australia.

Olly Tebbutt
Olly Tebbutt, partner at Deloitte in the North West

 

In addition, 10 overseas investors completed deals for North West companies in the final quarter of the year, though no deal valuations were disclosed. Europe remained most active investors, with four across Finland, Sweden, Belgium and the Netherlands. There were three across North America, and a further two across Asia.

Olly Tebbutt, partner at Deloitte in the North West, said: “Given the proximity of the Brexit deadline, it is perhaps unsurprising to see deal values and volumes fall over the course of the last year. However, as the results of Deloitte’s latest CFO Survey shows, the result of the latest election has driven business confidence up to record levels.

This is as much a factor for overseas investors as it is in the UK, and we are confident that we will see a rise in activity as our position in Europe becomes clearer over the coming months.”

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