BrexIMPACT on cross-border M&A

Transcription

1 BrexIMPACT n crss-brder M&A

2 Tday s webinar panel Mderatrs: Andrew Scla UK Partner, GPMIP Thmas Kessler German Partner, GPMIP Panelists: Ben Gmes-Casseres Prfessr, Brandeis University Authr, REMIX STRATEGY Riccard Puglisi Prfessr Ecnmics and Plitics: Università di Pavia Steve Wd M&A advisr, frmer Glbal Managing Partner M&A and VP Strategy UK, IBM At any time thrughut the webinar please: Raise yur hand t jin the debate - we will unmute yu t ask a questin as sn as we can Ask a questin fr the panel using the Q&A r Chat functins 2

3 Intrductin Hw will the Brexit impact crss-brder M&A? Tday s webinar will fcus n BrexIMPACT rather than the prs and cns f Brexit itself UK required t send letter triggering Article 50 f the Lisbn treaty. EU leaders agree there shuld be n negtiatins befre Article 50 is triggered by the UK, asking the British gvernment t srt its current situatin ut first, while laying ur expectatins that this is dne within weeks We are here t discuss the IMPACT the decisin will have: Fr crpratins that have a M&A driven grwth / divestiture strategy On managing pst-merger integratin in a pst-brexit area and hw t prepare fr the final EXIT date 3

4 Cntext UK Brexit scenaris (FT) Surce: Financial Times 4

5 Update frm Brussels Optins / M&A Impact? Ttal Exit Swiss mdel Nrwegian mdel N benefits frm any part f the single market UK relies slely n the rules f the WTO r, Negtiates a new bilateral trade deal with the EU Leaves the EU and des nt jin the Eurpean Ecnmic Area (EEA) Enters varius bilateral agreements with the EU t gain access fr specific industries in the single market Leaves the EU but jins the Eurpean Ecnmic Area (EEA) Free mvement f gds, services, capital and persns within the EU, Nrway, Island and Lichtenstein N benefits frm EU external trade agreements Required t make significant financial cntributins and peple mvement (key critiques fr the leaver) N lnger hub t EU lses attractiveness fr access via M&A Maintain hub t EU nly fr sme industries Maintain hub t EU but it will be cstly 5

6 Hyptheses: Brexit Impact n Business Cmbinatins Immediate: Uncertainty reduced investment, including in M&A Medium run? GDP slwdwn, currencies, mnetary easing buying, exits? Lnger run? Plitical/ecnmic/regulatry restructuring f Eurpe & glbal? Remix f assets t repsitin cmpanies in restructured landscape Three laws f success in any business cmbinatin 1. New surces f jint value, and breakup f earlier cmbinatins 2. Cllabratin patterns will change e.g. suppliers, partners, sales 3. Payut t partners will change transfer prices, regulatins, demand Biggest impact may be n nging business partnerships restructuring, renegtiatin, recmbinatin, including deal exits and terminatins 6

7 UK Imprts what will be the impact n M&A? Key f cntinents: Ttal Glbal UK imprts: $664 Bn Of which EU imprts: c. $337 Bn Surce: The Observatry f Ecnmic Cmplexity 7

8 UK Exprts what will be the impact n M&A? Key f cntinents: Ttal Glbal UK exprts: $473 Bn Of which EU exprts: c. $201 Bn Surce: The Observatry f Ecnmic Cmplexity 8

9 Change in GBP pst Brexit decisin GBP EUR GBP USD GBP CNY % -9.7% -9.1% GBP JPY GBP CHF GBP NOK % -8.4% -6.6%

10 What CEOs need t watch ut fr? BrexIMPACT negtiatins may trigger issues fr M&A pst-merger integratin Sales Changed regulatins, classificatins, requirements t sell in the UK / EU will impact bilateral trade (prduct, health and envirnmental regulatins f the EU) Human Resurces Changes fr wrk and residence visa, free mvement f emplyees EU/UK Changes in benefits, pensin, health care, insurance; validatin f pensins, EU emplyees in NHS, Expat and preferred freign tax status, cst f educatin fr EU citizens Supply Chain Changes in taxes, tariffs, duties, imprt / exprt qutas may hinder crss-brder supply chain Lgistics t / frm UK may invlve significantly mre bureaucracy and time UK / EU prcurement may shift twards new suppliers; ptential transfers f supply chain hubs in t ther cuntries (NL, Ireland, Switzerland, Luxemburg) t avid instability and risks n trading cnditins Finance Changes in credit ratings may trigger limitatin t funding/capital markets access, mney transfer Tugh negtiatin expected n "finance passprting" which will limit sales f UK-based prducts in the EU Eur-based financial prducts may have t g thrugh a EU-based cmpensatin platfrm Eur trading activities in the UK; Lndn as the RMB Eurpean hub may be transferred t ther places Relcatin f GCC assets t ther glbal finance hubs t manage FX rate vlatility Balance f investrs in UK tilt frm EU t rest f wrld 10