Business development · 24 September 2018

US firms ignore Brexit fears and splash the cash on UK startups

The devaluation of sterling since the Brexit vote has made UK firms an attractive proposition
US companies are splashing the cash on UK businesses despite wider Brexit fears, new data has revealed.

According to new figures from accountants Moore Stephens the value of M&A (mergers and acquisitions) deals where US companies bought out UK firms more than doubled in the last year from 36.8b in 2016/17 to 79b in 2017/18.

This is in stark contrast to the value of UK takeovers by EU companies which fell by 5% to 13.3b over the same period.

Moore Stephens suggested the difference comes down to opposite views on Brexit. Whilst EU firms? concerns over Brexit have been heightened by the political debate surrounding it, those in the US take a far less negative attitude.

The devaluation of sterling since the Brexit vote in 2016 has also made UK firms comparatively cheaper than many of their foreign rivals.

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The doubling of US investment into the UK has also come despite expectations that many US companies would reduce outward investment following recent tax reforms by President Trump. These new rules encourage firms to repatriate cash they hold overseas to the US as well as incentivising inward rather than outward investment.


 
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