Brexit comes on the back of a slowdown in UK led M&A activity in the first half of 2016. According to Paul Egan, corporate partner in law firm Mason Hayes & Curran, this was due in part to market uncertainty and volatility around Brexit.

“Now that Brexit has come to pass, market uncertainty and volatility is set to continue, at least in the short to medium term,” says Egan. “Volatility presents a number of practical challenges for companies such as agreeing deal valuations, more cautious lending and potentially an increase in shareholder activism.

“However volatility arising from Brexit also creates market opportunities for well-capitalised corporates and private equity as companies come under cost pressure to consolidate or restructure their portfolio through the disposal of non-core assets.”

Egan added: “In the medium to longer term, as certainty increases around what form the UK's exit will take, we expect deal flow to rise, in particular as corporates and private equity companies identify and take advantage of market opportunities.

“Transactional costs may increase for some deals as a result of Brexit. For example, deals involving companies with UK trade will no longer be able to take advantage of the EU’s one-stop-shop when it comes to merger control approval and may have to get separate approval from the relevant UK authorities.”

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