Good morning, everybody, welcome to C&F Talks. It's a great pleasure to have with me today David Avery-Gee, who's a Partner at Weil. David's going to be speaking at our M&A Summit on the 24th of November in London. David's the Co-Managing Partner of Weil’s London office and leads its M&A practice in London. He's one of the most well-known strategic advisors on boardroom issues to corporate clients and he has extensive experience advising on some of the most high-profile M&A transactions. David is regularly recognised and ranked as a top deal maker for European M&A transactions. David, welcome.

Hey Maurice, it's nice to speak to you and thank you very much for having me.

Absolute pleasure.

Now you're moderating our opening panel at the Summit, which is looking at global M&A outlook for the next 12 months or so and who or what is driving that deal activity in the current economic and geopolitical environment. Could you perhaps give us a sneak preview of where you think this conversation might go?

Yeah sure, so I'm actually really looking forward to it, Maurice. It should be a really interesting discussion. I think the M&A environment at the moment is super complex.

On the one hand, you have very ripe conditions for M&A, you have the stock market at an all-time high, you have generally reasonable economic growth, you have private equity with all their dry powder, you have lots of assets for sale, you have the whole AI boom going on. So, it's a terrific environment, but nevertheless there is something holding people back from M&A. Probably the M&A market's not where we thought it was going to be at the beginning of the year.

And so, I'm really looking forward to the discussion and to understanding what people think is driving that, you know, what are the negative factors in the market?

Do you think that one of those negative aspects, certainly in relation to the UK, is the forthcoming budget on November 26th and perhaps people wanting to wait and see what happens?

Yeah, I think so a bit. I mean there's definitely no doubt that there is a kind of negative sentiment about the UK and its fiscal position and the investment background to the UK. I think people are waiting to see what's in the budget, they are waiting to see how our books are going to be balanced.

So, it definitely does weigh on M&A in the UK, but remember a lot of UK listed companies, their businesses aren't UK centric. It's definitely a factor, but it's not the only thing. And for me, as I said, I think that it is a complex M&A environment, and I think that the geopolitical situation is also something that people worry about. So, there are a few things, but certainly the budget in the UK is something we're all waiting for.

Maurice

And what do you think about the recent regulatory shifts and market reform? So, have those influenced deal making, particularly in the UK and Europe?

Yeah, you know, look, I think certainly the shift from the CMA, we've seen a notable shift in their attitudes and certainly being a lot more flexible and proportionate. That's definitely very, very welcome. I think the government policy on AI investment, for example, I think they're in a little bit of a flux on what they're doing on energy.

Certainly, the nuclear plans and the spending on infrastructure is good. I think that there's been, there's a little bit of change on what's going on in the North Sea and that, you know, could open up M&A activity. So, governments play a huge role in M&A, both in a positive way and also in a negative way.

I mean, there's a lot more focus on, in Europe, on government interests and on defensive positions as well. So, it works both ways. But certainly, in the UK, I think the regulatory shift has been very positive.

Maurice

You mentioned earlier, David, dry powder amongst the private equity firms. To what extent is pressure from their limited partners who are driving activity and exits? Are they all bolting for the door and wanting to realise some cash?

Yeah, you know, we talk about this all the time while we have one of Europe's absolute leading PE practices. And, you know, we talk about a lot the fact that there is so much dry powder and that money needs to be spent. And you've already been talking about that for a number of years.

But the money's there and it does need to be spent, but it needs to be spent in a sensible way. And I think that complexity that I was mentioning earlier is impacting on that. And that's something that I'm really looking forward to discussing at the conference and getting people's views on.

Maurice

And looking to the future, as confidence grows and capital becomes more accessible, do you expect more mega-deals or are we going to see continued mid-market growth?

Yeah. So, I think that, well, first of all, I'm quite low to make any predictions, so I'll probably be wrong. But I think that this complex M&A environment and this complex economic environment is good for mega-deals.

In the UK, mega deals are kind of few and far between. But M&A is certainly a way that companies can transform themselves. And we'll see. But I think we will see some very large transactions over the next 12 months.

Final question, David, if I may. The governor of the Bank of England yesterday gave warnings that there may be a major downturn on its way. Do you share that view on economic sentiment?

You know, I think that's a market-driven thing. I think he was really referring to, I think, the AI bubble. And there is absolutely no doubt that the all-time record highs have been driven, that we're seeing in stock markets have been driven by sentiment around AI, but not just AI.

I think, you know, if you go back to Liberation Day, which I think was April the 2nd of this year, there were serious worries about the impact of tariffs, and they probably haven't been as bad. So, I think it's not just AI-driven. There are certainly concerns around that.

And, you know, from my own perspective, I actually, you know, I'm someone who thinks that AI is an amazing tool, and I think it is going to transform economies. So, I'm not in the world that it's such a bubble. But, you know, we have to take those heeding, those warnings seriously.

And when the governor of the Bank of England comes out, that obviously impacts upon sentiment and the investment environment.

Yes, no, I agree with you. I think AI is transformative, and I do think it's like the Fourth Industrial Revolution. But fingers crossed that it turns out that way.

For our viewers, if you'd like to hear more on these topics, and the changing world of M&A, please do come along to the event, the M&A Summit on the 24th of November in London, where you'll hear from David and many others. If you'd like further information on that, please do go to our website, www.cityandfinancial.com. David, thank you so much for joining us today.

Yeah, great to speak to you, Maurice, and see you in a few weeks' time.