UK M&A figures fall as deal completion time reaches record high

Findings from accountancy firm Ernst & Young shows that announced transaction values are down by 39 per cent in Europe.

Results from the firm's M&A Tracker also reveals that, on a UK scale, volume and value has dropped by 28 per cent during the third quarter of 2012.

The statistics come on the back of an improved performance in the second quarter of the year when volumes grew by 13 per cent and values surged by 22 per cent.

Ernst & Young suggests that a 'prolonged slowdown' in M&A could well continue into the final quarter of the year and beyond.

The average time taken to complete a deal has also risen in the UK to 40 days, an all time high the report says.

Jon Hughes, UK & Ireland transaction advisory services leader at Ernst & Young, comments, 'The more positive outlook we saw earlier this year has dissipated, as the year has progressed the mood has cooled.

'The only certainty at the moment is continued volatility and with this as a backdrop, appetite for deal-making will remain subdued.'

Europe as a whole has seen a starker drop-off than the one experienced by the UK. Announced transaction volume has fallen by 24 per cent quarter-on-quarter.

Asia has surpassed Europe in terms of total number of announced transactions, the first time this has been recorded by Ernst & Young since it began its M&A Tracker in the first quarter of 2010.

However, the firm says that this is less likely to be a reflection of a long-term shift, and attributes it to the economic uncertainty in the Eurozone as a trend 'temporarily depressing' M&A volumes.

Hughes adds, 'Post financial crisis there was a consensus that the unprecedented volatility would present rich pickings for those predatory acquirers with healthy levels of cash on their balance sheets.

'But today there appears to be a more moderate and cautious approach to M&A and the deals that are getting done are driven primarily by strategic plans rather than opportunistic actions - this is one of the factors leading to the increase in the time it takes for transactions to complete.'