Report on the Press Breakfast
James Abernathy, Executive Chairman of Abernathy MacGregor
Tom Johnson, CEO of Abernathy MacGregor
Angus Maitland, Chairman of Maitland
Egbert Deekeling, Senior Partner of Deekeling Arndt Advisors
Volker Heck, Senior Partner of Deekeling Arndt Advisors
On November 3, representatives of the German financial press and the AMO partnership came together for a press breakfast at Villa Kennedy in Frankfurt, Germany. Volker Heck held the welcome address and handed over to Angus Maitland, who gave a short overview on the Brexit vote.
The main issues he addressed were the unexpected vote in favor of the Brexit and the general sentiment within the UK: The people did not expect the outcome, were shocked and confused, and some sort of bitterness remained. Furthermore Angus Maitland focused on the division between the parties and the aftermath: David Cameron resigned and Theresa May became new prime minister. Angus Maitland considered a soft Brexit with a 10 year transition period as the most likely scenario, with a continuing European free trade being the best possible solution for both, the UK and Europe. However, for this outcome the UK will have to compromise, especially concerning immigration policy. Angus Maitland then stated that the vote cannot be undone, but he can envision a future benefit of the Brexit in the improvement of the exporting performance. At the same time he expected inflation to rise from currently 0.7 % to 4 % in the future. The bottom line is that there is at present a lot of uncertainty in the UK and difficult years ahead.
The word was handed over to Tom Johnson, who focused on the upcoming presidential election in the USA and the influence on the deal market, which has picked up recently despite the uncertainty of the electoral outcome. In his opinion, the current pace will continue, if Hillary Clinton wins. On the other hand, if Donald Trump should succeed, no one can predict the impact on the markets. Nevertheless, Tom Johnson doesn't expect M&A activities to slow down, quite the contrary, he sees more deals coming. According to Tom Johnson this is mainly due to organic growth being increasingly difficult to achieve.
In the following discussion the question was raised to which extend nationalist protectionism is affecting M&A deals. Usually there was a nationalistic outcry from the public, if the deals are transnational. However, Tom Johnson stated that the buyers get smarter nowadays: They keep the acquired company's name, its employees, its management as well as its headquarter and thus the public resistance often fails to appear. Angus Maitland confirmed this to be the same in the UK.
However, an exception was detected, when it comes to transnational deals with China, there seem to be more sentiments, as seen in Germany recently, where even the government pronounced recommendations. Tom Johnson agreed and explained that such deals get extra scrutiny in the USA.