Dan Primack's assertion that "M&A activity for British companies could be in for a major surge" following on from the General Election results is a little too optimistic we feel, and grounded too much in reading and extrapolation of past data rather than looking at the realpoltik on the ground in the UK.

True: the two previous elections have led (even just in time-line terms) to an uptick in M&A activity in the UK.

However, both previous elections have led to rather more stable governments (even allowing for the previous Lib/Con coalition in 2010) operating in rather less un-stable political times (if not economic). We had a clear picture (relatively quickly) of how these governments were going to shape up. We had (at least an image of) stability. We knew what they wanted, if not how they were going to go about acheiving it.

Having previously addressed the false virtue of a weakening sterling (in an in-bound M&A context), we see little empirical evidence that leads us to believe the latest election will make a fundamental difference in the short term to M&A activity. The current lack of certainty in so many aspects of politics and economics within Britain seem unlikley to guide many people's hands.

In the current econo-political climate, we feel that the result of the election will not act as a factor in and of itself in driving (or supressing) M&A activity, but will merely change the lens through which other, more systemic, issues are seen and this will be unlikely to take place within the quoted 90 days.

According to recent (post-election) research by the IoD:

"The IoD found a negative swing of 34 points in confidence in the UK economy from its last survey in May.

While 20 percent of members were  optimistic about the economy over the next 12 months, some 57 percent  were either quite or very pessimistic - a -37 "net confidence" score.  That compares with a -3 percent score in May."

Further research by Harvard (See here for full paper) really drives home the point that Brexit and post-Brexit trade relations are more at the forefront of businesses' minds at the moment than purely domestic politics. The election does nothing to clarify Britain's position on Brexit.

It is impossible to extract any one factor (i.e. the election) and link it directly to any one outcome (i.e. increased M&A activity).


Whilst uncertainty does breed opportunity, there is currently severe uncertainty deep within the zeitgeist of the British system. We would be surprised if some 'breathing room' was not sought in the short term.

We await the coming 90 days with interest and look forward to considering the landscape further once the dust has settled.