A disorderly exit by the U.K. from the European Union could wipe as much as $1.6 trillion from future mergers and acquisitions, a new study says.
The uncertainty created by the U.K. June 23 vote to leave the European Union has already had an impact. Global M&A so far this year is down 16 percent to $1.5 trillion from the same period in 2016, according to data compiled by Bloomberg.
“In the last few days we have seen evidence that the M&A market in the U.K. won’t come to a crashing halt even if it won’t be at its previous pace,” said Tim Gee, London merger partner at Baker & McKenzie. “London will also retain a remarkable concentration of financial, legal and economic talent.”
The impact of Brexit won’t lead to a global “Lehman moment,” and the study’s central scenario shows global merger activity “only modestly down for the next two years before fully recovering,” the report said.
In a similar report in 2015, Baker & McKenzie forecast that fallout from a Greek exit from the euro could wipe as much as $1.4 trillion from future M&A.
