Respondents to the new Herbert Smith Freehills’ cross-border M&A report Beyond Borders have given their verdict on the six key factors that could negatively impact ambitions for M&A over the next year. The top six fears identified by respondents are:
- Instability in the Eurozone. This is the worry our respondents see as most likely to dampen their dealmaking enthusiasm over the next 12 months; it was cited as the number one risk by 25% of respondents.
- Impact of slowdown in Chinese demand. China's falling growth figures loom large for many businesses, with 20% warning that it could have a significant impact on their enthusiasm for dealmaking.
- Low commodity price environment. This risk factor, which is related to slowing growth in China, is seen as a significant risk by 17% of respondents.
- Ukraine. The ongoing military confrontation on the fringes of Europe has the potential to become a deal-threatening risk for 10% of respondents.
- Impact of tightening US monetary policy. 9% of respondents cited nervousness about US monetary policy as their key fear. This fear may recede, for this year at least, in light of the latest signals from the US Treasury.
- Rising tensions in the South China Seas. The global nature of political confrontation is further underlined by the fact that 7% of respondents are particularly concerned about this potential conflict.
Interestingly only 6% of global respondents cited Brexit as a significant worry.