The Trade and Cooperation Agreement (TCA) signed by the UK and EU in December 2020 contains few provisions which are directly relevant to M&A – but there are provisions on investment and the end of the Brexit transition period is likely to have a significant impact, both on M&A and the wider investment landscape.
Mergers and acquisitions
There is little of direct relevance to mergers and acquisitions in the TCA and it would be unusual for a trade agreement to contain extensive coverage of this area – although there are some provisions on investment (see below). However, the fact that we now have a Brexit trade deal resolves the immediate uncertainty and should boost deal activity in 2021. There is no doubt that the uncertainty of the past few years (rather than the fact of Brexit itself) has had an impact on deal-flow in the UK and any outcome that provides certainty is welcome news for the M&A market.
Of course, some transactions will be impacted by added complexities in relation to merger clearances (see this briefing) and due diligence as a result of parallel but diverging regimes. In addition, whilst the TCA provides welcome clarity in certain areas, there remains considerable uncertainty over what the UK Government's longer term post-Brexit strategy is, in particular which areas of UK law it will look to "de-Europeanise" first. For more detailed discussion of the impact of Brexit on M&A, click here.