When Brexit was first mooted by the Leave camp over a year ago, the slogan was all about taking back control of sovereignty and executive powers from the European Union.
No one ever saw it as a conduit for taking control of US companies, did they?
Yet that is what appears to be starting to happen just two weeks after the historic referendum.
As sterling anchors at around $1.29 – recovering from a 1985 low of $1.28 on Wednesday – investors are keen to target those British stocks which have exposure to overseas assets, especially north American ones. Read more here.
So it is only a matter of time before we find British companies attempting to secure revenue streams in dollars so that they translate into larger income on their balance sheets back home.
But in some parts of Europe that is evidently already happening. Whereas only a few months ago US companies such as Pfizer Inc (NYSE:PFE) were trying to make tax-efficient purchases such as Allergan (NYSE:AGN), which is headquartered in Ireland, now it Is the turn of European companies to seek distribution as well as diversified revenues from the US.
Yes, it is Britain that expressed its intention to break off from the EU, not the EU to break off from Britain, but the aftermath of the Brexit vote has been felt on mainland Europe too. The euro has also lost ground in the past two weeks and Standard & Poor’s downgraded the trading bloc to double A. So the economic and credit pain is being felt by Europe as much as by the UK.
So witness today the decision of French foods behemoth Danone (EPA:BN) to gobble up US organic foods group WhiteWave Foods Co (NYSE:WWAV). Read more here.
Meanwhile, although only a rumour, Swiss pharma combine Roche (OTCMKTS:RHHBY) is reported to be interested in snapping up Biomarin Pharmaceutical (NASDAQ:BMRN). Read more here.
There is also little doubt that as British companies gear up to possible takeover overtures, other European rivals will also be seeking to stop them at the pass. So expect some of those European rivals to attempt to get into the US first.
Certainly the next two years are likely to bear witness to an increase in transatlantic M&A activity, and Brexit will have played a major role in bringing back some corporate excitement.