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General election causing “wait and see” approach for mergers and acquisitions

2 min read

10 April 2015

Former editor

The uncertainty being caused by the 7 May general election is resulting in many investors holding back on corporate transactions, according to new research from Experian.

In analysing the first three months of 2015 compared to the same period in 2014, statistics showed that deal volume dropped from 1458 to 1162, and deal value from £78.4bn to £63.4bn.

London saw nearly £29bn wiped off its total value of mergers and acquisitions, despite UK businesses reportedly continuing to attract oversees buyers.

Commenting on the figures, Experian UK&I business development manager Wendy Driver said: “The slow start to the year’s deal making does not come as much of a surprise. Investors thrive on certainty and many will wait to see if the upcoming general election has any effect on the market before moving to complete deals.

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“The M&A market is expected to pick up as the year goes on, so businesses considering a purchase or a deal should start researching potential targets at the earliest opportunity.”

The sharpest fall in proportionate deal volumes was found in the South West, Wales and Scotland. Bucking the trend were Yorkshire and East Anglia, which both recorded an increase in the value of deals announced.

Top five target countries in Q1 2015

Top five bidder countries in Q1 2015

According to Experian: “Most overseas bids originated from the US, while investors in France and Ireland also looked to the UK market in good numbers. UK companies were equally as keen as US counterparts, concluding 23 deals worth a combined total of £4.1bn.”

Financial services and insurance were found to be the busiest areas of the market, making up 30.8 per cent of all transactions. In the manufacturing sector, deal values reached £20.6bn, growth of 21.9. per cent when compared to the £16.9bn from 2014.