Perspectives from ISB

It is a well-established fact that mergers and acquisitions are often influenced by an external industry shock. The recent uncertainty of UK’s decision to stay or leave the EU seems to have affected the number of takeovers during the first quarter of this year. These findings came from a new report by the Centre for Management Buyout Research at Imperial College Business School. The report finds that firms are reluctant to do deals before the EU referendum vote. Another remarkable impact of the Brexit polls is that the most common form of buyouts taking place in UK in 2016 involves family businesses, who don’t have a successor but need to find a new owner.

In another recent survey conducted by CampdenFB, 75% of principal owners, chief executives and trusted advisers were in favor of the UK staying within the EU. The majority of, (47%) and (40%), respondents respectively were of the opinion that the impact of Brexit on their family business would be either “Negative” or “Neutral”. There is uncertainty on the sudden imposition of import tariffs as well as how the vote might affect the export market. Local businesses are likely to suffer as new trade deals with EU have to be negotiated. Striking new trade deals could take substantial time, leading to a ‘decade of uncertainty’ for small businesses.



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