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00:00So much going on. I don't know whether you're sitting as a chief executive. You call your banker at JP Morgan and say oh I'm not sure about the timing now for me. I'm going to cool off to see how this recessionary environment settles. Francine thank you very much for having me on. It's been an interesting first time. I'd like to wait. No I think we put it on the relative scale when you look at it over a 10 year or five year period. Actually it's a relatively healthy story. So the knee and the knee is actually up a percent compared to a five year average global harmony of 16 percent. So last year wasn't an anomaly a great anomaly and one of dreams for bankers like myself. Now to your question. What about when the CEO calls. I think the focus is on strategic deals where there's a synergy opportunity. I think that when we talk to clients they are keen to push ahead despite what are headwinds. No doubt. But do that. What are they concerned about. Valuation. Because if you see the price of oil in one day it's like 120. The other one it's AK 99. It's difficult to know what the price of things are. Yeah I think that uncertainty doesn't help them and we all know that. But I think we are going to get a levelling out in the valuations in the public valuations. Private valuations rely on that. But they will settle too. And I think people will naturally look over a period of time and say I'm comfortable it's settled or I can see value for maybe other people don't. So from that perspective we are starting to see that settling come through. But we've got an earnings window coming through now in July August September. So that will further see maybe a little bit of disruption. But on from there we hope it provides a base between. Are there sectors that actually are doing better than others in terms of finding good partners with you know there are good many good synergies and bad ones and finding the good ones. But if you if you look at the first half now it's only a short period. But we just states had a fantastic first half BDO percent. Tech however had a difficult one. And we saw the tech sell off in January February and probably get greater disruption on valuations much to your point. So it's overall volumes down 60 odd percent compared to this time last year. Longer and average probably down only down about 20 percent. So your point is absolutely right. But again it's going to settle in and people will focus on the strategic agendas which don't fundamentally change. And we see a lot of other ways that emanate happens. You mentioned the activist point. You know people are getting ahead. Well it just you know it's me that sort of successful trip across the Atlantic. It is in the major economies U.K. Germany France et cetera. And and a lot of it is behind closed doors. We don't see probably 50 percent of it. And our sense is on a lot of clients we speak to they want to get ahead of us. They want to do the deals before the activists forced them into that position. Don't talk to me a little bit about funding. So after 10 years 15 years actually of cheap monetary policy we're now looking at this very uneasy normalization with inflation really being rampant. Is that a worry for how some of these deals are funded. I think it is slowing it down. No two ways about it. Pricing gets more expensive. The capacity is less. What we're going through I suppose a transitory period whereby it will settle it will correct itself. But you can't get away from rising rates environment and an inflationary environment. So we're gonna have to see how does it affect deals when we see more share for share deals. We saw that with the DSM from in effect transaction and we will see more of those. We'll see private equity who had been tremendously busy. You know they were 40 odd percent of their money in the first quarter of this year. We'll see them probably over. Private equity is a funny one because they've been doing deals for them sitting on them. So through the change the dynamic has these private markets because they've hold held on to companies that change in the future. I I don't think it does. I think you're seeing an extension of the time they would hold their companies and we're seeing more in for orientated type of transactions where it might be a 10 to 12 year period. But the activity levels there we think will continue. They may be slightly more vicious over the coming months and maybe into the new year. But he is very much here to stay. And you're getting that balance between public and private inflation. What does that mean for companies that actually cannot pass on you know some of the increases that they're feeling from inflation onto their customers. Is it more likely that they merge. I think they will look for opportunities to seek out costs greater control over the supply chain so you can control prices through the supply chain. And as you say scale is going to be a focus for people as they seek out opportunities to to be bigger in your economies and and to find savings to fight that inflation factor. Has the U.K. specifically I mean this is like a microcosm. It feels like of all the problems the world kind of coming out of conference and exacerbated because it's a small open economy. So mean many was taking. My world it's had a hard first half down 44 percent as you know. But when you look at the amount one hundred maybe three billion of them. That's twice the other largest market. So it remains very much at the front and it always has been probably the most open any market outside of the U.S.. So there are headwinds and we have seen obviously the news overnight and that goes to confidence factor. But fundamentally we see the U.K. still pushing ahead. We will we will see some large transactions no going before the year end. And there's more to come. I mean quickly when we said you know we had these interesting six months if there's a gas embargo or our people waiting for to understand better what Vladimir Putin's thinking is I do actually speak to clients who say I don't you know I don't know what to do about Russia. And when that settles then I'll move into buying another company. Was it kind of now you know the back of their mind. I think it's increasingly moving to the back of their mind. I think we're going to deal over the coming months with the new norm and people deciding I have to get on with it. I've got a strategic agenda. I've got shareholders to look after. And I've got employees on boards.

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JPMorgan's Lysaght sees M&A Volumes Remaining Elevated

Dwayne Lysaght, JPMorgan Co-Head of EMEA M&A, discusses M&A drivers, headwinds, and activist investors. He speaks with Bloomberg's Francine Lacqua on "Bloomberg Surveillance: Early Edition". (Source: Bloomberg)

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