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The terms of any such necessarily consensual Brexit remain to be worked out, if the
UK decides to vote to leave the EU. The sheer uncertainty of trying to disentangle
the UK from the EU’s regulatory framework and any transition to get to a UK outside
the EU, while not necessarily disastrous in the long term, would inevitably cause short
term damage to the UK economy.
And, yet …
This overhanging threat of Brexit does not, so far, seem to show significant signs
of deterring investors from an M&A standpoint. 2015 was an extremely active year
for M&A activity in the UK, particularly if our London office was anything to go by!
Much global cross-border M&A activity centered on the UK with US$313 billion of
investments from Eurozone and other overseas’ investors, according to the Deloitte
M&A Index 2016. Into Q1 2016, the UK remains at number two behind only the U.S. in
terms of the volume of M&A deals, according to data provided by Thomson Reuters. To
take but two examples, U.S. giant Sysco’s US$3.1 billion bid for UK catering supplier,
Brakes Group and the proposed merger of the London Stock Exchange and Deutsche
Börse. Both in different ways illustrate the rich and diverse span of the UK market with
world class industries, including life sciences, ICT, creative, financial and professional
business services, aerospace and automotive engineering.
Why has investment held up so well?
The UK maintains a range of highly attractive conditions for business and growth. The
UK:
(1) has an efficient judicial system. The English legal system has been exported
worldwide, not least to Israel.
(2) government’s Plan for Growth seeks to create the most competitive tax system
in the G20.
(3) has a comprehensive system to support the development and exploitation of IP.
(4) can count on awell-educatedworkforce,according to theGlobal Competitiveness
Report 2015-16 from the World Economic Forum.
An Israeli investor will not be unpleasantly surprised by the business environment in
the UK, nor should an Israeli lawyer wishing to stay close to his/her clients venturing
overseas to the UK be unfamiliar with the legal issues to be faced.
To name but two areas, London leads…
in Finance
According to analysts at the Z/Yen Group in late 2015, London is themost competitive
financial center in the world, utterly dominating the rankings. The capital topped every
single category in the index, with the best business environment, the most developed
financial center and the top overall reputation.
Israeli companies are taking advantage of this. More Israeli companies were listed
on the London Stock Exchange than from any other foreign country in 2014.
More Israeli companies were listed on the London Stock Exchange than from
any other foreign country in 2014. While this fell back in 2015, listings in
London are a known quantity for Israeli investors and the UK is able to provide
venture capital and equity financing to Israeli start-ups and entrepreneurs.