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- EY says 46 percent of global executives plan to buy other firms in the next 12 months. That's 10 percent decline from the previous year.
- Only 9 percent said they expected the market to remain stable in the next 12 months, however EY said the current situation was likely just a "pause."
- Britain took the second-best spot in terms of M & A destination of choice. The country came in fifth place in the firm's last survey in April.
Companies' appetite for mergers and acquisitions has fallen to a four-year low, with investment by worries over Brexit and the US-China trade battle, according to a study released on Monday.
Less than half – 46 percent – of global executives plan to buy other firms in the next 12 months, a 10 percent decline from the previous year, EY said in its biannual "Global Capital Confidence Barometer" report.
The consultancy said that 46 percent of respondents were more than 2,600 executives across 45 countries.
"Geopolitical, trade and tariff uncertainties have finally caused some dealmakers to hit the break button," Steve Krouskos, global vice chair of EY 's transaction advisory services team, said in a statement.
"Despite stronger-than-anticipated first-half earnings and the undeniable strategic imperative for deals, we can expect this year to finish with much lesser M & A than how it started."
This year is a notable one in terms of so-called mega deals. German pharmaceutical giant Bayer BAYN-DE closed its $ 63 billion deal to buy US agriculture firm Monsanto earlier this year and American media titans Disney DIS and Comcast CMCSA has become more popular in the world. FOXA for $ 71.3 billion and Comcast offering $ 40 billion for British Sky SKY-GB rival.
The EY report said that, though M & A activity has been somewhat strong on political uncertainties, fundamentals remained robust, with 90 percent of company executives expecting the market to improve.
Only 9 percent of respondents to their survey said they expected the M & A market to remain stable in the next 12 months, however EY said that the current situation was likely just a "pause."
"Said EY's Krouskos." The good news is that they will likely take over the break in action. "This is likely to be just a break, not a complete stop." "Fundamentals and the strategic rationale for deals remain strong, and the appetite to acquire will grow grow towards the second half of 2019."
UK No. 2 for M & A destination
Britain leapt in the tables for the second-best spot for M & A destination, EY said in its report. The country came in fifth place in the firm's last survey in April.
Companies are looking to "mitigate" the general debate over trade and tariffs, EY said, and 20 percent of executives see the U.K. as an opportunity for M & A investment.
The U.S. took the top spot, and the U.K. was trafficked by Canada, Germany and France.
"Many companies are looking at M & A to mitigate the potential impact of trade and tariff policies," Krouskos said.
"All of the top M & A destinations in the world of geopolitical disruption."
Moore Stephens, who said the value of US deals targeting UK companies had more than doubled to £ 79 trillion ($ 103.1 trillion) in 2017/18 from £ 36.8 trillion in the previous year. But that study pointed to depreciation in the British pound since 2014 as the prime suspect for big takeovers.
Prominent U.S. corporate takeover deals for U.K.Sales – other than Comcast-Sky – include Coca-Cola's KO $ 5.1 billion acquisition of coffee chain and Apple's AAPL purchase of Shazam. The latter has been reported to be worth $ 400 million.
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