November 7, 2016 / 1:13 PM / a year ago

UK misses out in end-of-year recovery for M&A deals

LONDON (Reuters) - The value of merger and acquisition deals between UK companies has plunged 62 percent to a 30-year low since the country’s vote to leave the European Union, according to Thomson Reuters data.

The sun begins to shine through morning fog next to the Shard in central London, September 19, 2014. REUTERS/Toby Melville

Domestic deals in Britain since the June 23 referendum have totaled just $1 billion the data shows.

Foreign purchases of British firms have also slumped 69 percent, according to the figures, despite a sharply weaker pound.

That stands in contrast to a burst of dealmaking in the United States and the rest of Europe, which has lifted bankers’ hopes for a Christmas fee bonanza after an otherwise mediocre year for M&A globally.

AT&T’s (T.N)’s $85.4 billion acquisition of Time Warner (TWX.N), Qualcomm’s (QCOM.O) $38.5 billion buy of Dutch chip maker NXP Semiconductors (NXPI.O) and GE Oil & Gas’s $32 billion merger with Baker Hughes BHI.N are expected to earn bankers advising on these deals $475.91 million in fees, data compiled by Thomson Reuters and Freeman & Co show.

Those deals, announced in the past month, have pushed global fees earned from completed mergers and acquisitions (M&A) to stand at $21 billion so far this year, down 7 percent on the same period in 2015.

Last year was a record year for dealmaking globally with several large deals involving UK-listed companies, like Anheuser-Busch Inbev’s (ABI.BR) $110.3 billion acquisition of SABMiller and Shell’s (RDSa.L) $53 billion takeover of BG Group.

Softbank’s (9984.T) $30.7 billion acquisition of UK-based chip designer ARM Holdings in July had sparked hopes among bankers that the fall in sterling might lead to more deals, but few others have materialized so far.


Goldman Sachs remains the biggest earner globally according to Thomson Reuters.

But the stand-out performer has been pure advisory firm Lazard (LAZ.N), which is the top fee-earner in Europe so far this year. If it retains that position by the end of 2016 it will be the first time in the 15 years that the data has been collated that it has clinched the top spot.

Lazard advised Tyco International on its $16.5 billion merger with Johnson Controls and also worked with ARM Holdings on the Softbank deal.

Globally, Lazard ranked fourth both in terms of fees from completed deals and the number of announced deals so far this year, challenging large American bulge bracket banks which also get M&A credit for lending money to their clients.

Companies over the past few years have increasingly turned to so-called “boutique” pure advisory firms which are seen as more independent in their advice than universal lending banks.

Another pure-play advisory firm, Rothschild (ROTH.PA), ranked number two for European fees and number six globally, the data showed.

Among the bulge bracket firms, UBS is set for a record year after advising Swiss chemical firm Syngenta on its $43 billion deal with Chemchina. The Swiss bank ranks at number two for announced deals so far this year in Europe, Middle East and Africa (EMEA), just behind Goldman Sachs.

But its European rival Deutsche Bank (DBKGn.DE), which is in the middle of a strategic overhaul as it risks a multi-billion fine from U.S. regulator, has been struggling, falling from sixth to tenth globally on announced deals so far this year, the data showed.

Editing by Mark Potter, Greg Mahlich

Our Standards:The Thomson Reuters Trust Principles.
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