What dealmakers need to know about the UK election result and its impact on UK investing in 2020

Shared with kind permission of BCCJ Corporate member, Hogan Lovells

After nearly a decade marked by political stalemate, the Conservative party now has a clear majority and authority to pursue its chosen Brexit strategy and manifesto commitments for the UK and its engagement with the rest of the world.

Will the election of a Government with a clearer mandate than at any time in the last decade make a difference for investors? Is it likely to change the attractiveness of particular assets in Britain? Should dealmakers look at the UK differently in 2020?

BCCJ corporate member, Hogan Lovells has explored some of the incoming Government’s manifesto policies and what those might mean for UK M&A in 2020 and beyond.

Read the full report HERE

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Excerpt

Brexit
The cornerstone of the Conservatives’ election campaign has been their pledge to deliver Brexit. So their victory means that the UK’s exit from the European Union is now almost inevitable. It will almost certainly happen by the end of January 2020.

For business this creates a degree of certainty in the short term. The deal between the UK and EU guarantees a transition period meaning that radical change is unlikely for the remainder of 2020. In the medium term a degree of Brexit uncertainty remains. To avoid a “hard Brexit”, the UK and EU will need to reach a further deal of some sort by the end of 2020. This means that those looking to do deals involving the UK over the coming months will still need to consider Brexit – in appropriate cases, deal terms will need to reflect the
potential implications of various possible outcomes.

Politically however the last three years suggest both the UK and the EU will want to avoid a “no deal” outcome so some form of longer term accommodation remains likely.
The new Government’s vision of a post-Brexit Britain places great weight on a high-tech, high-skill, innovation led economy which looks globally rather than to the EU for its trading relationships. This theme runs through its manifesto beyond Brexit and will set the climate for investment in the UK over the coming years.

Regulation
One of the biggest differences between this Government and its immediate predecessor is its desire to uncouple UK regulation from that in the EU. Over time we are therefore likely to see divergence with the aim of making the UK a more business and innovation-friendly jurisdiction than its larger European neighbours, particularly in the
industrial areas which the Government sees as the future.