Legal dealmakers who were waiting on Britain’s EU referendum result to give certainty and confidence to their clients have been left sorely disappointed by Thursday’s shock result, which has left the international business community with far more questions than answers. Several prominent M&A lawyers have warned that the fog surrounding the international M&A market could linger for as long as two years – the minimum amount of time required to legally and economically disentangle the UK from the EU. In the meantime, a stalled pipeline of trans-Atlantic deals hangs in the balance.

Frozen deals

‘I would expect that M&A deal volume in the EU will be very muted if not frozen until the markets stabilise and the ramifications of the exit become clearer,’ said Cahill Gordon & Reindel senior partner Bart Friedman in the Wall Street Journal. He added that cross-border deals in Europe which involve any level of UK involvement are ‘likely over’ for at least the rest of the year.

New York-based Cravath, Swaine & Moore partner Richard Hall backed Mr Friedman’s assessment, telling Legal Week that the effects of the Brexit vote could last as long as two years. Uncertainty may not be the only thing hampering the M&A market in the wake of the Vote Leave victory; existing M&A deals may be delayed or even called off if the Brexit vote is found to constitute a ‘materially adverse event’ under the terms of their contract. ‘Some people have Brexit provisions in their contracts, but I don’t expect to see a huge raft of contracted deals falling apart,’ said Allen & Overy partner Richard Browne.