At a recent event hosted by Hogan Lovells to discuss the findings of the report, BBC presenter John Humphrys hosted a panel session under the Chatham House rule. As mid-market M&A experts, we were asked to participate, alongside an Executive Director of European M&A from Morgan Stanley, a Regional Director of Control Risks, and a senior M&A lawyer from Hogan Lovells.
We were asked to bring to bear our expertise in mid-market and cross-border transactions, while John quizzed us on what is driving the current increase in M&A activity, and some of the risks and impediments to a return to growth.
The report found that around half of major global corporates saw M&A as an important driver of their forecast growth in 2014 and beyond, and 75% agreed that “M&A has delivered what we hoped for in the past.”
One key theme which emerged from the wide-ranging discussion was the primacy of talent, the difficulty of finding skills and the importance of recruiting and retaining key staff. We considered ‘acqui-hires’ – using acquisitions as an alternative way of recruiting teams of very talented people – and whether this US-trend would pick up steam in the UK market.
Another key theme was the importance of a stable political and regime for long-term decision making. This is often tax-driven, for owner managers and entrepreneurs likely to benefit from structures like Entrepreneurs’ Relief, while for corporates it is often governed by the regulatory and reporting framework in which they operate.
Before John Humphrys drew the session to a close, we considered some of the risks to and around increasing M&A volumes. The panellist from Control Risks pointed out that many corporates underestimate the risk of cyber-attack and the importance of cyber-security, while the Morgan Stanley panellist highlighted the on-going uncertainty in the Euro-zone. Overall, however, the panel agreed that the increase in M&A we’ve seen over the past few months is likely to continue and will be a significant feature of 2014.