DEAL APPEAL

Why the UK remains enticing on a global stage

Is it time to look beyond the headlines?

Welcome to Deal Appeal, our report on domestic and international investor attitudes towards the UK as a deal-making destination.


As an international law firm, we have witnessed, and been involved in, continued strong deal activity in the UK over the past few years. Given the growing negative headlines about investor sentiment as the Brexit negotiations continue, we wanted to find out more about how executives really feel about investment prospects in the UK.

The results are highly encouraging: the UK is considered an attractive location for investment, with many of our respondents looking to the UK for technology and IP, a skilled workforce and access to capital. Whilst, as you would imagine, Brexit is clearly on peoples’ minds – it emerged as the biggest risk of investing in the UK – it is far from a deal-breaker.

What will the future hold?

To find out what our respondents really think about doing deals in UK, and what they perceive as barriers to success, download the full report now.

Key stats

  • 88%

    say the UK is as, or more, attractive an investment destination as it was pre-referendum

  • 32%

    say it is more attractive than spring 2016

  • Icon

    1%

    of those not planning a UK deal give Brexit uncertainty as a reason

  • 63%

    are attracted by the UK’s skilled and specialist workforce

  • 60%

    expect to complete at least one UK deal in the next two years

  • 31%

    those who aren’t looking at investing in UK who are looking at Asian markets instead

Themes

Hot spot or not?

“The UK is regarded as having a safe and navigable legal system, a strong regulatory environment, good quality assets, a solid economy and, overall, as being a good place to do business – that’s why many Asian investors continue to see the UK in an attractive light.”
Tom Platts,
Partner, Singapore,
Stephenson Harwood

As the fifth largest economy by GDP globally, the UK is home to world-class companies and sophisticated, liquid, capital markets. With a reputation for a dynamic deal-making environment, the country has long held a position towards the top of the global rankings for domestic and cross-border investment activity.

The UK ranked third in the first half of 2018 (behind the much larger markets of the US and China) for completed mergers and acquisitions (M&A) activity by value and volume, while London took the top spot in Europe for initial public offerings (IPOs) by value and volume in Q2 2018.

What does the future hold?

For more information on this, and how the UK compares on the global stage, please download our full report here.

ATTRACTIVENESS OF THE UK AS AN INVESTMENT DESTINATION OVER THE PAST TWO YEARS ACCORDING TO LOCATION OF RESPONDENT
Investment Destination

A gateway to growth and skills

“Asian investors largely view the UK in a positive light. There is a strong recognition here of a robust legal framework that offers investors security. It’s a very well-established market and one that benefits from high-quality legal, corporate finance, consulting and accounting advice.”
Paul Westover,
Partner, Hong Kong,
Stephenson Harwood

Our survey results clearly demonstrate that, for many domestic and international businesses and investors, the UK remains an important deal-making destination.

Yet they also reveal why: respondents see the UK as assisting their growth and talent acquisition. In an increasingly global and digitised economy, companies need access to new products and services, highly skilled people and capital, while also finding innovative ways of doing business if they are to stay ahead of the competition. The UK, our respondents say, is an attractive location to source these, in large part because of the strength of legal and regulatory frameworks and well established corporate finance advisory community.

To find out more about the key attractions of the UK market, download our full report here.

THE RATIONALE BEHIND UK DEALS IN THE PAST TWO YEARS COMPARED WITH THE NEXT TWO YEARS

Is there a Brexit effect?

“Investors in the Middle East take a long-term view. While there is some uncertainty in the short term, most still believe London will be an important financial centre and see the UK as a safe harbour with a legal system they can rely on. It remains a strong market for many Middle Eastern investors strategically.”
Sandeep Dhama,
Partner, Dubai,
Stephenson Harwood

As the UK continues to discuss arrangements for leaving the European Union, there remains a high degree of uncertainty around the eventual outcome.

As a result, it’s almost impossible to gauge sentiment around the UK market without assessing the extent to which Brexit is influencing deal-makers’ attitudes. The high level of sell side M&A reported by respondents over the past two years is likely to be at least partly explained by a wariness about Brexit, although much of this work appears to have been completed, with the proportion of disposals halving for UK deals in the coming two years.

To find out more about the Brexit effect, download our full report here.

WHERE (OUTSIDE THE UK) DO YOU PLAN TO INVEST IN THE NEXT TWO YEARS?

Why is deal appeal so relevant?

Head of Corporate Finance Duncan Stiles provides an overview of why Deal Appeal is topical in today's volatile markets.

To watch the video, please click below.

Watch Video
Duncan Stiles

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Our Team

Andrew McLean

Partner

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Patrick Mousset

Partner

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Tom Platts

Partner

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Duncan Stiles

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Paul Westover

Partner

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Office:  Hong Kong

Sharon White

Chief executive

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Grace Willcocks

Business Development Manager

T:  +44 20 7809 2617

M:  +44 20 7809 2617

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Office:  London

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© Stephenson Harwood LLP 2016. Any reference to Stephenson Harwood in this document means Stephenson Harwood LLP and/or its affiliated undertakings. Any reference to a partner is used to refer to a member of Stephenson Harwood LLP.