MORE than half of UK firms will actively pursue mergers and acquisitions in the next year as Brexit looms, research suggests.
A survey by professional services giant EY found deals are increasingly seen as the key to growth and the number of companies expecting a boost through “organic” sources has dropped 11 per cent since October.
Meanwhile, seven in 10 UK business cite geopolitical or emerging policy concerns as the greatest risk to economic growth.
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And less than a quarter of international firms said greater clarity over the Brexit timetable following the triggering of Article 50 had increased their chances of investing here.
Ally Scott, EY’s head of transaction advisory services in Scotland, said: “UK companies are adjusting their strategies to maximise growth opportunities and protect margins amid changing market dynamics at home and abroad.
“Strategic deals that will help businesses access new markets, new geographies and new technologies look likely to remain high on the boardroom list of priorities. However, an increased focus on joint ventures and alliances suggests that in less certain times some companies are seeking a more conservative, low-risk approach to deal making.
“In Scotland, the deals market remains buoyant with recent merger and acquisitions deals exceeding £1 billion. These deals are evidence that the market here is as active as any in the UK outside of London.
“The UK as a whole remains attractive as a top destination for domestic and global companies to do deals. However, the UK will need to work hard to maintain this position as the Brexit negotiations unfold.”
According to the survey, the biggest economic risks for UK companies in the next six-12 months include currency instability, movement of labour and trade flows, all of which fit within broader concerns over global policy-driven change alongside ‘increasing government intervention’.
Scott said: “The UK economy is experiencing relatively steady growth and near-term UK economic forecasts have improved in the last six months. Improvements in the economies of the UK’s primary export markets, especially in Europe and the US, are mirrored in the more positive sentiment of our survey.”