This paper analyzes domestic (UK firms acquiring other UK firms) and cross-border (UK firms acquiring foreign firms) mergers and acquisitions announced between 2012 and 2018 and investigates the micro and macro factors that impact announcement effects, deal completion likelihood, and long-term stock performance after the Brexit Referendum. For domestic deals, micro-level factors show that the relative size of the target has a stronger negative impact on the probability of deal completion after the Referendum. However, acquirers with previous M&A experience can moderate this negative effect. In the long run, larger relative size deals announced after the vote have better performance for completed deals and acquirer’s experience enhances long-term stock returns for non-completed deals. By comparison, macro-level factors explain the characteristics of cross-border deals announced after the vote. These results show that UK firms acquiring target firms domiciled in countries with EU membership to maintain their access to European markets after the Brexit Referendum are more likely to complete the deals.
Brexit Referendum, mergers and acquisitions, micro and macro factors, performance, deal completion probability