All takeovers should be seen as guilty until proven innocent

THERE was gloom all around when the UK mergers and acquisitions (M&A) data for the first five months of the year was published last week.

- Professor Stefan Allesch-Taylor

"The worst performance since 2016," read the headlines. The UK's M&A activity of $89 billion had been around 50% less than last year's corresponding period. For context, worldwide M&A activity has declined by 42%, with Europe closer to 60% down. I can see why lawyers and investment bankers (and Porsche dealers) may see this as bad news. But for the rest of us, these are glad tidings.

The takeover is a glamorous thing. In my days of being CEO of an investment bank, nothing excited everyone more than takeover talk. Working with bigger investment banks poured jet fuel onto takeover early sparks. We would spend days listing all the great "synergies" (someone really needs to erase that toxic word from the dictionary) that would propel the business forward years compared with the drudgery of organic growth. How wrong we were.

British barrister Sir William Garrow, at a trial at the Old Bailey in 1791, coined the phrase "innocent until proven guilty". It became the "golden thread of justice" that has run through legal systems across the world. My "golden thread" in business, admittedly created by hindsight, is the profound belief that all takeovers are "guilty until proven innocent".