Brexit uncertainty: fewer mergers, big business winners

While it is widely recognised that last year’s EU referendum caused significant uncertainty for markets, some early indications were that it had not reduced the level of business confidence. Our results show that the uncertainty surrounding the referendum triggered a fall in the number of mergers and acquisitions, and M&A activity has not recovered. The mergers that have suffered the largest drop have been the ones that were large in comparison to the size of the acquiring firms. Finally, as a result of the post-referendum uncertainty, the businesses that have remained more M&A active have been typically the largest ones. Our results – that are based on a careful study design of a treatment and control group – contradict some of the earlier, more optimistic discussions, which were based on simple before-after comparisons. Read more of this post