M&A may slow on ‘record’ high valuations, says UBS’ Vereker

Bloomberg

Mergers and acquisitions may be headed for a slowdown amid high valuations and an uncertain outlook around monetary policy, says William Vereker at UBS Group AG.
“I look at record-high valuations across many exchanges, I look at a very liquid backdrop with the ongoing easing of monetary policy, you’ve got an uncertain outlook on interest rates,” said Vereker, global co-head of investment banking at UBS. “Ultimately some of the core drivers of M&A are likely to still be there, but I just wonder whether the deal volume might be slightly slower.”
In addition, some of the biggest drivers of M&A have hit roadblocks that are preventing acquisitions this year. Large Chinese bidders, which were behind many of last year’s deals, are less active amid a government crackdown on cross-border takeovers, Vereker said. Volumes in the UK, the largest M&A market in Europe, are down “materially” since the country voted to leave the EU last year, he said.
About $1.5 trillion in M&A has been announced so far this year, down 2.2 percent from the same period last year, according to data compiled by Bloomberg.