Michal Berkner, partner of international law firm Cooley, comments on a great year for M&A.
Conditions continue to be ripe for high levels of cross border M&A activity in the months ahead – cash rich corporates, Private Equity and funds with unprecedented levels of dry power and ticking investment clocks, financing available on favourable terms, CEOs eager to grow their businesses faster than would be possible organically and a general acceptance that the uncertain regulatory and geopolitical conditions of recent times are the new normal.
I expect to see more inbound activity into the UK, especially out of the US due to the Trump tax reforms significantly lowering corporate tax rates and leading to the repatriation of cash trapped outside the US.
While some of this cash is being employed in stock buy backs, the expectations are that it will also be deployed in M&A.
In the two industries where Cooley is most active, tech and life sciences, the impending Brexit is not deterring increased levels of investment in UK companies in these sectors. While we will never know what additional investments could have been made into the UK or the rest of Europe if the referendum went the other way, global businesses must follow and invest in talent, technology and innovation, wherever these reside.
The UK continues to be open for business and welcomes international investment. Barring any unforeseen events, and we’ve had our share in recent times, expect 2018 to continue to be a blockbuster year for cross border M&A.