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www.ma-review.uk I N O T A E R C E U L A V I N O T A R G E T N S V I image generated by AI 1 e m u o V l | 6 2 0 2 / 2 e u s s I i H b m G s e c v r e S a d e M A & M i MERGERS & ACQUISITIONS · Equity Investments · Alliances · Restructurings · Divestments · Private Equity

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EDITORIAL Different deals need different answers INTEGRATION IS A CHOICE, NOT A STRATEGY Dear Readers, M&A loves best practice. Standardised due diligence. Synergy targets. Integration playbooks. 100-day plans. Repeatable processes. All of them have value. They cre- ate discipline in situations that are complex, uncertain and often highly political. But they also create a temptation: to assume that because something worked in one acquisition, it will work in the next. The contributions to this second edition of M&A REVIEW UK suggest a different perspective. The central challenge in M&A may not be to identify the best integration model, the fastest process or the most sophisticated toolkit. It may be to understand what this par- ticular acquisition is supposed to achieve, and then design the process around that objective. That sounds obvious. In practice, it is surprisingly difficult. Once a transaction is signed, organisational gravity takes over. Integration teams mobilise. Functions identify opportu- nities. Systems are harmonised. Synergies become targets. What was originally a strategic question, where will value come from can quietly become an execution question: how quickly can we integrate? Neither approach is universally right. And that may be the more important lesson. M&A has spent decades searching for success factors. Per- haps we should become equally interested in fit: fit between the strategic questions the acquisition should solve and the target; between the source of value and the organisational design; between integration and autonomy; between speed and learning; and between the process used to manage a deal and the outcome it was originally meant to produce. That theme runs through many of the contributions in this issue. Agility requires strategic direction. Target screening can quietly distort strategic intent. Portfolio transformation requires continuous choices rather than episodic optimisa- tion. Carve-outs remind us that creating value can sometimes require separation rather than combination. And the wider UK market discussion shows that M&A decisions are being made in an environment where uncertainty is unlikely to disappear. There is therefore no contradiction in arguing for disciplined M&A processes while questioning universal best practices. Good process matters. But process should follow purpose. This edition deliberately challenges that sequence. Our cover story argues that integration and value creation are not syn- onymous. Integration can be essential, but it is a means rather than an end. The appropriate degree and form of integration depends on what the acquirer is actually trying to achieve. Perhaps that is also what we want M&A REVIEW UK to con- tribute. Not another collection of recipes, but a place where practitioners and researchers can challenge assumptions, compare different models and ask why an approach works in one context but fails in another. The two corporate interviews make that distinction tangible. At Halma, the model is built around disciplined target selection, long-term ownership and a combination of autonomy and accountability. Businesses retain substantial decision-making responsibility while gaining access to capital, talent, expertise and a wider network. Scale is created without requiring every company to become organisationally identical. Imperial Brands provides a different answer. Its acquisitions can bring distinctive brands, products and entrepreneurial capabilities into a much larger organisation. Here the ques- tion is not whether to integrate, but where. Distribution, regulatory expertise and infrastructure may benefit from scale; consumer connection, brand identity and innovative ways of working may need protection. The objective is not to make M&A simple. It is to ask better questions before complexity takes over. Enjoy the second edition. Yours sincerely, The Editorial Team of M&A REVIEW UK Prof. Dr Florian Bauer Stefan Schneider Alexander Griesmeier published by – a brand of M&A Media Services GmbH M&A REVIEW UK 2/2026 • Volume 1 I

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CONTENTS Editorial Integration is a Choice, not a Strategy I REPORTS Cover Story Integration is not value creation: Perhaps M&A has been asking the wrong post-deal question Prof. Dr Florian Bauer, University of Bristol Business School & Alexander Griesmeier, Grant Thornton 38 Corporate Interviews You don’t have to integrate to succeed: How Halma creates value through autonomy, accountability and disciplined acquisition Michael O’Neill, Halma 43 Integrate the scale. Protect the difference. How Imperial Brands uses M&A to transform its portfolio without standardising away what it buys Julia Lefèvre, Imperial Brands 47 Integration & Leadership Agility Needs Direction: Why Organisations Must Balance Flexibility with Strategic Purpose Prof. Dr Florian Bauer, University of Bristol Business School & Simon Quinn, Moon Executive Search 50 Leading Through Uncertainty: What Really Happens During M&A Integration Dr Sam French, Virtual Services Company 54 M&A Advisory Why good advisers manage more than the transaction: The Personal Dimension of M&A Advisory Dr Roman Barwinski, University of Bristol Business School 61 Research & Insights M&A FOMO! How Social Media Shape M&A Decisions Dr Christoph Brielmaier, University of Bamberg, Dr Moritz Reis, University of Würzburg, Prof. Dr Martin Friesl, University of Bamberg, NHH Norwegian School of Economics & Prof. Dr Roland Pfister, Trier University 65 Technology & AI Reinventing M&A: How AI Reshapes the M&A Lifecycle Today and Tomorrow Michael Klawon, University of St. Gallen (M.B.L.-HSG), Frankfurt Business School (LL.M.), smartmerger.com AG; Dr Alexander Herzfeldt, Dr Sebastian Floerecke & Prof. Dr Christoph Ertl, Munich University of Applied Sciences, HM Business School 69 Sector focus Arming Europe: Cross-Border M&A and the Making of a Continental Defence Industry Dr Max Alles & Dr Nicole Englisch, Clifford Chance 76 Deals Under Duress: Healthcare M&A in an Age of Tariffs and Trade Barriers Kathrin Schroeder-Finckh, Dr Max Alles & Torsten Syrbe, Clifford Chance 82 Bristol M&A Society The Recent Deals Shaping UK M&A Erik Pavlovskyy & Jai Chauhan 88 Culture & Integration Living legacy: Organisational history as integration tool Dr Lara Pecis, Cardiff University & Dr Bingbing Ge, Lancaster University Management School 58 Imprint III IIII M&A REVIEW UK 2/2026 • Volume 1

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REPORT • COVER STORY Integration is not value creation Perhaps M&A has been asking the wrong post-deal question Prof. Dr Florian Bauer, University of Bristol Business School & Alexander Griesmeier, Grant Thornton For decades, post-merger integration has occupied an almost privileged position in M&A. Once a deal is signed, the vocabulary changes quickly. Integration teams are formed. Day 1 and the first 100-day plans are activated. Systems are harmonised. Reporting lines are clarified. Synergies are allocated. Workstreams multiply. autonomy is not a concession made because integration is difficult – it is the very condition under which value can emerge. That does not make integration bad. It makes integration contingent. And then we ask whether the integration is progressing well. And it suggests that the obsession with integration may occasionally cause acquirers to solve the wrong problem extremely well. But perhaps this is the wrong question. The more fundamental question is: where is the value supposed to come from? The integration reflex This distinction sounds simple, but it has significant conse- quences. Integration and value creation are not the same thing. Integration is one possible organisational mecha- nism through which an acquisition may create value. Sometimes it is essential. Sometimes selective integra- tion is superior to absorption. And sometimes preserving There are good reasons why integration dominates man- agerial attention after an acquisition. It is visible. It can be planned. Responsibilities can be assigned. Systems can be migrated. Procurement can be combined. Headcounts can be tracked. Synergies can be put into spreadsheets and reported to boards. 3838 M&A REVIEW UK 2/2026 • Volume 1

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REPORT • COVER STORY Value creation beyond cost cutting is considerably less obedient. It may depend on something as difficult to manage as transferring tacit knowledge, opening a new customer segment, combining two capabilities that have never previously worked together, preserving entrepreneur- ial behaviour, accelerating innovation or giving a small, acquired company access to resources it could not access independently. These processes are harder to put into a 100-day plan. As uncertainty increases after signing, organisations natu- rally gravitate towards what they can control. The risk is that integration gradually becomes an objective in its own right. Functions start integrating because integration is what functions do. HR aligns HR. IT integrates IT. Finance harmonises reporting. Procurement looks for scale. Individually, each decision may make perfect sense. Collectively, they may destroy the reason the acquisition was undertaken. We have seen this repeatedly in our research. In one acqui- sition designed to generate renewal and learning, the acquiring organisation began aligning the target func- tion by function. The integration progressed remarkably efficiently. Yet the smaller target became overwhelmed by new processes, reporting requirements and systems. One employee described the organisation as having been “crushed by the love of the parent.” The problem was not poor integration. categories or highly similar support functions may need substantial integration. Leaving everything autonomous would make little strategic sense. But consider a company acquired because of a technol- ogy, an entrepreneurial team, a customer relationship, an innovative business model or a capability the acquirer itself does not possess. Full integration can become much more dangerous. The closer the source of value lies to the distinctive characteristics of the target, the more carefully the acquirer needs to ask what should be connected, and what should be protected. The relevant choice is therefore rarely between integra- tion or no integration. It is between different organisa- tional configurations designed around different sources of value. Our recent research in the Journal of Management Stud- ies1 reinforces this point. Studying acquirers across several countries, we find that firms can achieve post-acquisition coordination through different paths. Entrepreneuri- ally oriented acquirers tend to combine human integra- tion with greater decision-making autonomy for target managers. Market-oriented acquirers are more inclined towards functional integration and tighter manage- rial control. Both are seeking coordination; they simply achieve it differently. That distinction matters. Coordination does not neces- sarily require absorption. You can align goals without standardising every process. You can create connections without centralising every decision. You can share capa- bilities without eliminating organisational boundaries. The problem was that good integration had become dis- connected from value creation. Compounders make the problem particularly visible Start with value, not integration Perhaps nowhere is this clearer than among the growing number of acquisition-driven compounders. Their model is frequently described as buy-and-build. Yet much of the attention falls on the first word. This changes the sequence of questions managers should ask. The traditional question is: Buy. How should we integrate this company? A better sequence is: How do they source targets? How many acquisitions do they complete? What multiples do they pay? How fast can they deploy capital? But the more interesting capability may sit behind the second word: Why did we acquire it? Where exactly will additional value come from? What needs to change for that value to emerge? And only then: what should we integrate? Build. For some acquisitions, the answer may indeed be: quite a lot. And building does not necessarily mean integrating every acquired company into an increasingly large corporate If two businesses pursue scale economies, duplicate plants, overlapping distribution networks, common purchasing 1 Bauer, F., King, D. R., Covin, J. G., Schriber, S., Brueller, N., & Weng, Q. (2026). Acquirer strategic orientations, integration decisions, and performance. Journal of Management Studies. M&A REVIEW UK 2/2026 • Volume 1 3939

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REPORT • COVER STORY machine. The sophisticated compounder has to build something else: an organisational architecture capable of owning an increasing number of businesses without suffocating them. This creates a fundamentally different challenge from a one-off or a series of transformational acquisitions. Imagine completing one acquisition and adding five central reporting requirements. It may be manageable. Complete 20 acquisitions, and the same logic begins to create bureaucracy. Complete 100, and a headquarters that attempts to coordinate everything directly eventually becomes the constraint on growth. its model. If those fundamentals are present, value crea- tion becomes less about fixing the acquired business and more about enabling it to do more. At Halma, that means combining autonomy with accountability. Businesses gain access to capital, talent, expertise and a wider network while retaining substantial control over how they oper- ate. There are common expectations around govern- ance, compliance, cyber security, financial reporting and performance. Beyond these, operating companies retain responsibility for serving their customers, developing their strategies and running their businesses. Support is delib- erately designed to be drawn on where it adds value rather than imposed as a standard operating model. This is why some successful serial acquirers appear deceptively decentralised. The absence of extensive cen- tral integration is easy to interpret as a lack of manage- ment. In reality, the opposite may be true. Maintaining autonomy at scale requires considerable discipline. Halma provides one illustration of what this can look like organi- sationally. Rather than scaling primarily through addi- tional layers of central control, it adds leadership capacity around the portfolio. Divisional Chief Executives support groups of operating companies, while the sector structure itself can evolve as the portfolio grows. The organisation around the businesses scales; responsibility for running them remains close to customers. • You need rigorous target selection. • You need clarity about what belongs at group level and what belongs locally. • You need accountability without micromanagement. • You need mechanisms for capital allocation. You need ways of moving knowledge and talent through the organisation. And, critically, you need the disci- pline not to intervene simply because you can. The real buy-and-build capability may therefore be less about repeatedly integrating companies and more about repeatedly adding businesses to a system that allows them to become more valuable without requiring them to become identical. Halma: enable rather than absorb The interview with Halma plc in this issue illustrates the point particularly well. Its acquisition model begins with unusually strong emphasis on target selection. The prem- ise is straightforward: if the acquired company is already a strong business with attractive fundamentals, the par- ent’s role is not necessarily to redesign it. Halma’s logic turns much traditional M&A thinking around. It looks for high-quality businesses with strong positions in niche markets, long-term structural growth drivers, strong management teams and cultures that can thrive within 4040 M&A REVIEW UK 2/2026 • Volume 1 Continuity also matters. The Divisional Chief Executive who leads the acquisition process becomes Chair of the company after completion, preserving the relationship and understanding built during the transaction. That role helps the acquired business access Halma’s wider net- work, capital, expertise and talent without transferring day-to-day decision-making to the centre. This is still integration – but integration understood much more broadly. There are common governance and reporting requirements, strategic alignment, access to shared resources and extensive human connection across the Group. What is deliberately limited is unnecessary operational absorption. Knowledge also travels differently. Halma creates touch- points through development programmes, training and cross-company relationships, but explicitly rejects the idea that there is one version of “what good looks like” that should simply be mandated across the portfolio. Imperial Brands: Integrate the scale, protect the difference The interview with Imperial Brands in this issue provides a useful counterpoint. The underlying principle is similar, but the organisational response is different. Imperial often acquires smaller entrepreneurial businesses because they bring something the larger organisation does not have in the same form: a distinctive brand, consumer connection, product, technology or way of innovating. Imperial, in turn, can provide capabilities that the target struggles to build at the same scale: distribution, regulatory expertise, capi- tal and infrastructure. This produces a more selective integration logic. Where Imperial provides the advantage, integration can be valu- able. Distribution can be scaled, regulatory capabilities shared and some back-office activities combined. But where the target provides the advantage, its brand, con- sumer voice, operating model or innovation approach, standardisation may destroy rather than create value. As

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Julia Lefèvre explains in our interview, acquirers therefore need to be explicit from the beginning about “what we’re going to integrate and what we’re going to leave alone.” Her observation that “every function will want to play with the shiniest toy” captures a common post-acquisition problem particularly well. Once a company is acquired, corporate functions naturally see opportunities to contrib- ute. But individually sensible interventions can collectively standardise away exactly what made the target valuable. Protecting difference therefore requires active managerial discipline, not managerial neglect. Halma and Imperial therefore illustrate two different answers to the same question. Halma creates much of its value by enabling already successful businesses while preserving broad autonomy. Imperial may integrate more deeply in selected areas because its distribution, regula- tory and organisational scale form part of the deal logic. Neither model is inherently superior. What matters is that the boundary between integration and autonomy follows the source of value. The corporate parent has to earn the right to intervene. This raises an uncomfortable question for acquiring firms. Why should the target adopt the acquirer’s way of doing something? The typical answer is implicit: because we bought it. Legally, that may be sufficient. Strategically, it is not. Ownership creates the right to intervene. It does not auto- matically establish the value of intervention. A corporate parent creates value when it provides some- thing the business could not obtain as effectively on its own: capital, capabilities, customer access, talent, knowl- edge, credibility, scale or coordination with other parts of the group. When intervention adds more cost, distraction or bureau- cracy than benefit, parenting advantage quickly becomes parenting disadvantage. That makes every integration decision an economic question as much as an organisa- tional one: What additional value does this intervention create? If the answer is unclear, the burden of proof should per- haps sit with integration rather than autonomy. But auton- omy can become ideology too. There is an important warning here. It would be easy to replace one simplistic doctrine with another. If “integrate everything” is danger- ous, so is “leave everything alone”. Some acquisitions require substantial structural integra- tion. Others fail because acquirers preserve autonomy where coordination was essential. Regulatory compli- REPORT • COVER STORY ance, cybersecurity, financial controls and risk manage- ment may provide obvious minimum standards. Revenue synergies can require sales forces to coordinate. Scale deals may need common procurement, production or systems. Capability combinations may require deep interaction between technical teams. Even highly decentralised acquirers need mechanisms of control. The issue is therefore not whether integration is desirable. The issue is whether the form and degree of integration fit the value logic. This is also why copying another company’s M&A model can be dangerous. Halma’s model is internally consistent because its tar- get selection, long-term ownership philosophy, organi- sational structure and post-acquisition approach rein- force one another. A company cannot simply borrow the autonomy element while retaining a target-selection logic built around acquiring underperforming assets that require transformation. Likewise, a compounder cannot decentralise effectively if it lacks the capability to select management teams that can genuinely operate autonomously. Integration archi- tecture and acquisition strategy are inseparable. The hidden risk: successful acquisition integration, unsuccessful Perhaps the most dangerous acquisition is therefore not one in which integration visibly fails. Everyone notices those. It is the acquisition where integration succeeds according to plan while the strategic value quietly disap- pears. The ERP system goes live. The reporting lines have been harmonised. Procurement savings are delivered. The integration office closes on schedule. And two years later, the technology team has left, innova- tion has slowed, customers have moved away, and the capability that justified the premium paid for the target has been absorbed into organisational mediocrity. The integration programme can be green while the acquisi- tion is red. This is why integration KPIs are not acquisition- performance measures. They tell managers whether the integration programme is progressing. They do not necessarily tell them whether the acquisition is creating value. That requires returning continuously to the original logic of the deal. • What did we buy? • Why did we buy it? • What has to remain different? • What has to become connected? • What should the parent provide? • And what should it deliberately leave alone? M&A REVIEW UK 2/2026 • Volume 1 4141

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REPORT • COVER STORY From integration management to value-creation design Perhaps post-merger integration needs a different start- ing point. Not an integration blueprint, but a value-crea- tion architecture. Such an architecture would distinguish between four questions: What must be preserved? The people, capabilities, customer relationships, culture or entrepreneurial behaviours whose destruction would undermine the deal logic. What must be integrated? Activities where common systems, scale, control or coordi- nation are necessary to realise value. What should be connected? Areas where value comes not from structural integration but from interaction – knowledge sharing, cross-selling, innovation, talent or access to expertise. What should be enabled? Activities where the parent can provide resources, capital or opportunities while leaving decisions with the operating business. These questions produce a much richer post-acquisition design than asking simply for the appropriate “degree of integration”. They also bring us back to the central chal- lenge of M&A. An acquisition is not completed at closing. Nor is its value created by integration alone. Value emerges when the strategic logic that justified the acquisition survives the transaction and continues to shape organisational decisions afterwards. Sometimes that requires integration. Sometimes autonomy. Usually, it requires both, in different places, to different degrees and at different moments. The managerial chal- lenge is therefore not to become excellent at integration. It is to become excellent at knowing when integration cre- ates value, and when it gets in the way. The five questions we should ask before a deal is signed: 1. Where exactly is the value expected to come from? Not the synergy number – the underlying mechanism. 2. What must remain distinctive for that value to emerge? 3. Where is genuine interdependence between acquirer and target necessary? 4242 M&A REVIEW UK 2/2026 • Volume 1 4. Can coordination be achieved through connection, incentives or shared purpose rather than structural integration? 5. For every major integration initiative: what part of the acquisition’s value-creation logic does this support? Prof. Dr Florian Bauer is Professor of Strategic Management at the Uni- versity of Bristol Business School. Florian investi- gates organisational transformation processes, especially non-organic growth strategies such as Mergers and Acquisitions (M&A), from strategic, or- ganisational, and procedural perspectives. In parti- cular, he investigates how firms should strategically think and organisationally embed M&A to survive in the long run and how firms can effectively manage the acquisition process. As engagement plays an important role for him, he regularly exchanges with executives, consultants, and M&A associations. He was actively involved in multiple M&A processes and supported a wide range of firms in developing acquisition strategies and acquisition integration approaches. Since February 2020, he has been editor-in-chief of M&A Review; he is also co-founder and chief research officer of MADiscover GmbH (www.madiscover.com), a start-up company that digitalised M&A screening. Furthermore, he is a board member of the German M&A Association. In 2022 he received the Medal for Research from the British Academy of Management. Alexander Griesmeier is a partner at Grant Thornton and has extensive expertise in operational consulting for carve-outs, integrations, and restructurings, as well as value creation programmes. In his role, he has managed domestic and international transactions for corporate and mid- to large-cap private equity clients. He leads the Operational Deal Services practice.

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REPORT • CORPORATE INTERVIEWS You don’t have to integrate to succeed: How Halma creates value through autonomy, accountability and disciplined acquisition Michael O’Neill, Halma 1. Introduction 2. The Interview The conventional M&A story often starts with integration: close the deal, combine the businesses, capture synergies, standardise processes and realise value. Halma takes a different starting point. The FTSE 100 group has built its acquisition model around buying successful businesses in global niche markets underpinned by long-term growth drivers, preserving the qualities that made them successful and giving their management teams access to resources they can draw on when useful. That does not mean “hands off”. It means being deliber- ate about where the parent can genuinely add value. In conversation with M&A REVIEW UK, Michael O’Neill, M&A Director at Halma plc, explains why disciplined selection is fundamental to long-term value creation, why cultural fit does not mean cultural sameness, and how a decentral- ised group can learn and scale without turning every good idea into a mandatory process. This interview has been edited and condensed for clarity. M&A REVIEW UK: Halma is known for acquiring busi- nesses and giving them a relatively high degree of auton- omy. Where does the value creation logic of an acquisition begin: in selecting the right business, or in what happens after the deal? Michael O’Neill: It is a combination, but it starts with the business we acquire. We look for companies that have already been very successful in global niche markets and that are aligned with our purpose. We take a long-term ownership perspective, supporting them to invest, develop their capabilities and grow over time. Our model combines autonomy with accountability. Com- panies retain their identity, expertise and entrepreneurial qualities, the things that made them successful in the first M&A REVIEW UK 2/2026 • Volume 1 4343

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REPORT • CORPORATE INTERVIEWS place, while gaining access to Halma’s capital, experience, talent and global network. So value creation is about careful selection, preserving what has made the business successful and then adding support where it genuinely creates value. While Halma gives its lead- ers autonomy to grow each business in a way that makes sense to them, it also holds them accountable for deliver- ing results. Our decentralised model therefore depends on leaders who are comfortable with both autonomy and accountability: setting their own strategy, running their own P&L, and staying close to customers and end markets. M&A REVIEW UK: That puts enormous weight on target selection. What makes a business a Halma business? M&A REVIEW UK: That sounds quite different from the traditional image of an acquirer evaluating a target from a position of control. O’Neill: Different acquisition models are appropriate in dif- ferent circumstances. Our model works because we look for businesses with strong fundamentals and because autonomy preserves the freedom that has helped those businesses thrive. That also means we need to be attractive to the compa- nies we want to acquire. Some businesses may be at a dif- ferent point in their development, or may want something different from an owner, and in those situations, we may not be the right acquirer. O’Neill: We look for strong fundamentals: alignment with our purpose, a strong position in a niche market, long-term structural growth drivers, excellent management teams and a culture that we believe can thrive within our model for decades. If those fundamentals are there, value crea- tion becomes less about fixing the business and more about enabling it to do more. It is not always easy to reduce that assessment to a check- list. It requires a deep understanding of the business, its market, how it creates value for customers and whether it can thrive within Halma’s model. Ultimately, we are looking for high-quality businesses that are already creating real value for their customers. M&A REVIEW UK: Culture is one of the hardest things to assess in due diligence. What does “cultural fit” mean when the businesses themselves are so different? O’Neill: It definitely does not mean that every company has to have the same culture. Our companies operate in differ- ent markets and use different business models. What we do share is a common purpose around making the world safer, cleaner and healthier. That gives us a shared direction without requiring everybody to work identically. We also look for companies where decisions are close to the customer and where autonomy can work effectively. There is inevitably an element of judgement. The quality and openness of discussions during a process can help both sides understand whether there is a good fit. The whole conversation is ultimately about building mutual trust. And that works both ways. We encourage owners to speak to people whose businesses we have acquired and to management teams across Halma. This gives them an opportunity to hear directly how the model works in prac- tice. It is a mutual assessment: are we right for them, and are they right for us? 4444 M&A REVIEW UK 2/2026 • Volume 1 We are comfortable with that. The model only works if there is a fit in both directions. M&A REVIEW UK: If Halma does not rely on wholesale inte- gration, how does it support growth after an acquisition? O’Neill: At the outset, there are common standards that you would expect in a listed group: governance, compli- ance, cyber security and financial reporting, for example. Beyond that, continuity is an important part of our model. The Divisional Chief Executive who leads the acquisition process becomes Chair of the company after completion. That means the relationship and trust built during the deal continue into ownership. They understand the business, the growth plan and the commitments made during the acquisition process, and can support the Managing Direc- tor and board as they put that plan into action. An important part of the Chair’s role is helping the com- pany connect into the wider Halma network. That can mean access to expertise, capital, talent and international opportunities, or connecting its leaders with people else- where in the Group who have addressed similar oppor- tunities or challenges. The Chair can help the Managing Director and board navigate that network and draw on the right support at the right time. But we do not want to prescribe how management teams should run their businesses. The most effective support is often organic: leaders draw on resources because they see value in doing so. Those relationships tend to deepen over time as peer-to-peer connections develop between com- panies. People help one another because they are part of the same network, sharing experience, solving common problems and learning from one another. The operating companies still have responsibility for working out how to serve their customers, innovate, grow and run their day-to-day operations. Our job is to make resources available that may be harder to access as a

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REPORT • CORPORATE INTERVIEWS standalone business, and to help companies draw on them in the way that best supports their strategy. That autonomy sits within clear expectations for performance, govern- ance, risk management and responsible business practice. the scale and shape of the portfolio make that appro- priate. We have done that before, including moving from two sectors to three when we created separate Environ- mental & Analysis and Healthcare sectors. M&A REVIEW UK: Many groups start decentralised but gradually build larger headquarters, more standards and more mandatory processes. How do you transfer knowledge without falling into that trap? O’Neill: It starts with a fundamental belief that there is not one version of what good looks like. Our companies oper- ate in different markets, serve different customers and use different business models. We are not trying to force peo- ple to adopt approaches that may have worked elsewhere but are not relevant to the reality of their own business. Instead, a lot of knowledge transfer comes from creating touchpoints between people and businesses. Some con- nections happen naturally because there is an interface between an operating company and the Group. We also have events at Group or functional level, development pro- grammes and training. If you bring people from different companies together for a few days, they learn together and build personal relationships. Later, when somebody has a problem or sees an opportunity, they know who in the Group might have relevant experience that can help. The important point is that people have both the licence and the network to make those connections. Our lean structure makes it easier for leaders to build direct rela- tionships across the Group and draw on relevant expe- rience, without every useful idea becoming a mandated Group process. It is about giving people access to different perspectives and proven experience while leaving them accountable for deciding what is right for their business. Talent development also creates networks. People who move through different roles or businesses build relation- ships across the Group. That gives us another mechanism for knowledge to travel without turning it into a central process. M&A REVIEW UK: Is this model genuinely scalable? The more businesses a group acquires, the greater the temptation to centralise. O’Neill: We have a scalable organisational model that has enabled Halma to grow successfully over many decades while retaining a lean centre and keeping decision-mak- ing close to customers. The key is that growth does not require us to centralise the operations of our companies. We scale by adding leadership capacity around the port- folio rather than adding layers of central control. As the Group grows, we can appoint additional Divisional Chief Executives, each responsible for supporting a portfolio of companies. We can also evolve our sector structure when This allows us to maintain meaningful engagement with each company without changing where responsibil- ity sits. Our companies continue to serve their custom- ers, develop their strategies and run their businesses, while benefiting from being part of a larger Group that provides capital, governance, talent development and opportunities to share experience. Of course, there is always a balance to strike. As we grow, we continually look at where greater scale can create value, while being careful not to undermine the autonomy and entrepreneurial culture that make our companies successful. We are not afraid to evolve the structure around the model, but we remain disciplined about protecting its core principles. Ultimately, the model has proven itself over many years. Its continued success relies on finding the right compa- nies, building sufficient leadership capacity around them, attracting and developing exceptional leaders, and creat- ing an environment where they can thrive as part of Halma. M&A REVIEW UK: Talent seems to be an important part of the value proposition as well. O’Neill: Absolutely. Talent is one of the most important elements of our model. Because our businesses operate with a high degree of autonomy, we need leaders who are capable of running and growing businesses, making decisions close to customers and taking full accountability for performance. In a decentralised organisation, insisting on the right leadership at the company level is essential. Smaller independent businesses can sometimes find it difficult to offer the breadth of development opportuni- ties needed to attract and retain exceptional people over the long term. As part of Halma, individuals can build careers across different businesses, sectors and geogra- phies while our operating companies retain their entre- preneurial culture and autonomy. Over time, this helps us build a strong pipeline of leaders who understand how to grow businesses, develop people and operate within our decentralised model. That’s one of the key reasons why talent and succession are such impor- tant strategic priorities for Halma. M&A REVIEW UK: You also mentioned trust with sellers. How does the way an acquirer behaves during the trans- action shape the model? O’Neill: We aim to be a straightforward and reliable coun- terparty. We take time to understand a business before M&A REVIEW UK 2/2026 • Volume 1 4545

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REPORT • CORPORATE INTERVIEWS making an offer, focus our diligence on the issues that matter, and seek to maintain the key principles agreed at the outset. Inevitably, material new information has to be addressed, but our approach is to communicate openly and work constructively towards completion. That matters because it says something about how we want to behave as an owner. Sometimes that may mean we do not look like the most attractive buyer at the starting line. But sellers can test our claims by speaking to people who have already sold businesses to us. For us, there is a real culture of honesty and accountability behind that. M&A REVIEW UK: Finally, what can acquirers with more tra- ditional post-merger integration models take from Halma? O’Neill: I would not say another model is right or wrong. Different approaches are appropriate for different cir- cumstances. The important thing for us is that we have a specific model and we execute consistently against it. We are not chang- ing the model for every deal or applying somebody else’s acquisition hypothesis to a business that does not fit it. We remain careful about selecting the right businesses. We try to preserve what has made them successful and then support them to create more value and grow over the long term. The combination is autonomy and accountability. That consistency also means accepting that we will not always be the most attractive buyer. Another acquirer may see a very different value creation opportunity and plan to do something different with the business. That is fine. The discipline is knowing what kind of business fits your model, and what kind does not. Fact Box: Halma plc Business: Global group of life-saving technology companies Headquarters: Amersham, Buckinghamshire, UK Listing: London Stock Exchange (HLMA); FTSE 100 Purpose: Growing a safer, cleaner, healthier future for everyone, every day Portfolio: around 50 companies Sectors: Safety; Environmental & Analysis; Healthcare People: more than 9,000 employees in over 20 countries Customer reach: more than 100 countries FY2025/26 revenue: £2.582 billion FY2025/26 Adjusted EBIT: £594 million FY2025/26 M&A: five acquisitions with £447 million invested Track record: 23 consecutive years of Adjusted profit growth as reported for FY2025/26 4646 M&A REVIEW UK 2/2026 • Volume 1 Key Learnings: What Halma’s model suggests for acquirers 1. Value creation starts before signing. Value creation starts with a clear acquisition the- sis. For Halma, that means selecting high-quality businesses that can thrive within its long-term ownership model. 2. Cultural fit is not cultural sameness. A shared purpose and compatible management philosophy can create alignment without forcing operating companies into one uniform culture. 3. Autonomy only works with accountability. Decentralisation is not the absence of governance. Halma combines local decision-making with group standards and clear performance expectations. 4. Value creation can come through access rather than absorption. The parent can create value by providing capital, expertise, talent and networks without requiring every capability or process to be centralised. 5. Build networks, not only structures. Peer relationships, leadership development and cross-company connections allow knowledge to travel without turning every useful practice into a mandatory process. 6. Consistency is part of the deal proposition. Clear and consistent ownership principles help both acquirer and seller assess fit. That consistency also builds credibility by allowing sellers to speak directly to companies already within the Group. Michael O’Neill is M&A Director at Halma, focused on identifying and acquiring technology businesses for the Environmental & Analysis sector. He brings 20 years of experience across M&A, private equity, venture and growth investing, with a particular focus on environmental technology, resource efficiency and sustainability.

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REPORT • CORPORATE INTERVIEWS Integrate the scale. Protect the difference. How Imperial Brands uses M&A to transform its portfolio without standardising away what it buys Julia Lefèvre, Imperial Brands 1. Introduction For Imperial Brands, acquisitions are helping build scale in smoke-free products as consumer preferences and the nicotine category evolve. That has meant acquiring smaller entrepreneurial companies that have built brands, products or technologies which a large corporation might struggle to create in the same way internally. The challenge starts after the deal. Imperial can provide distribution, capital, regulatory capabilities and scale. But too much integration risks destroying exactly the qualities that made the target attractive. In conversation with M&A REVIEW UK, Julia Lefèvre, Cor- porate Development Director at Imperial Brands, explains why the best targets need to be identified long before they come to market, why the future organisation should be discussed before closing, and why successful integration requires an explicit decision not only about what to inte- grate, but also what to leave alone. 2. The Interview This interview has been edited and condensed for clarity. M&A REVIEW UK: Imperial operates in an industry undergoing substantial change. How does that shape your acquisition strategy? Julia Lefèvre: The traditional tobacco business remains important, but the industry is transforming. So we need to think carefully about where future growth will come from. A significant part of my acquisition focus is around next- generation nicotine products. Often, the businesses we look at are relatively small, entrepreneurial companies or start-ups that have developed a distinctive brand, prod- uct, technology or intellectual property. These companies can sometimes create something in a much more unconstrained way than a large organisation can. They develop a particular tone of voice, understand a niche consumer group or innovate differently. If that works, we can bring capabilities that help take the business into its next stage of development. M&A REVIEW UK: With many start-ups in an emerging category, do good targets come to you, or do you have to find them? Lefèvre: We receive plenty of inbound opportunities, but the really attractive businesses are scarce. You cannot simply wait for them to come to market. You need to identify them early and build relationships. Then, when an owner eventually decides to sell, you already know the business and they know you. That mat- ters particularly in a competitive process because you can move faster. M&A REVIEW UK 2/2026 • Volume 1 4747

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REPORT • CORPORATE INTERVIEWS And there may be many companies in a category, but that does not mean they are all attractive targets. You need to understand the intellectual property, product, people and whether there is genuine consumer traction. For me, net- work is absolutely key. M&A REVIEW UK: Once you have found a successful entrepreneurial business, where does Imperial create additional value? Lefèvre: Distribution is a good example. Take Black Buffalo in the US. The team had created a distinctive product and brand and taken the business a long way themselves. But scaling distribution and investing behind a brand across the United States requires significant resources. That is where a larger organisation can add something dif- ferent. We already have commercial infrastructure and a substantial sales force. We can use that to take a successful product much further. Value flows in both directions. We give the acquired busi- ness access to scale and distribution, while it gives us a dif- ferentiated product and strengthens our portfolio. The same applies internationally. With Helwit in Sweden, for example, expansion across additional countries creates regulatory and compliance requirements that become expensive for a smaller company very quickly. There can be a natural point where an entrepreneur says: we have built this successfully, but now we need a partner with a different kind of muscle. So the logic is not: we bought it, therefore we need to change it. The question is: what have they built exception- ally well, and what can we add that they could not as easily provide themselves? M&A REVIEW UK: That creates an obvious integration dilemma. How do you decide what to integrate, and what to protect? Lefèvre: You have to be very clear about where the syn- ergies actually are. If distribution is one of the reasons for doing the deal, then use the distribution capability. There may also be areas such as finance, regulatory or other back-office functions where integration makes sense and creates tangible value. But then you need to distinguish those from the things gen- uinely unique to the company you acquired. That could be the operating model, how they speak to consumers or how they develop products and innovations. Those are the things you need to protect. starting to standardise ways of working simply because that is how the larger organisation works. You can very quickly kill what you have just acquired. M&A REVIEW UK: Large companies have powerful func- tions. How do you stop these functions from trying to shape the newest acquisition? Lefèvre: You need clarity from the beginning, and that clarity has to exist at the highest level. When we acquire a company, we establish an integration team. But from the outset there needs to be a very clear line between what will be integrated and what will be left alone. Once that direction has been agreed, functions can con- nect and exchange information without assuming that everything needs to become standardised. Otherwise, every function naturally wants to get involved. As I sometimes say, every function will want to play with the shiniest toy you have, and the shiniest toy is usually the newest acquisition. That is why discipline matters. M&A REVIEW UK: So preserving autonomy is not just an attitude. You create organisational boundaries around it? Lefèvre: Yes. Sometimes relatively small organisational choices create meaningful boundaries. Leaving an acquired company as a separate legal entity, or even retaining its existing email addresses, can reinforce the idea that it remains distinctive. The moment everybody is immediately inserted into the normal hierarchy, behav- iours start to change. More importantly, we communicate explicitly what hap- pens where. Perhaps one area will be integrated within six months, another within twelve. Other areas may be clearly designated no touch. No touch does not mean no interaction. We might have excellent consumer insights that would benefit the acquired business. Of course we should share them. But sharing insight is very different from telling their team how they must speak to their consumers. M&A REVIEW UK: At what point do you start discussing the future organisation with the target? Lefèvre: Early in the acquisition process. I would not neces- sarily call it integration at that stage. I would call it devel- oping the future together. The danger is coming in with perfectly good intentions and For many founders, selling the company is emotional. They 4848 M&A REVIEW UK 2/2026 • Volume 1

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REPORT • CORPORATE INTERVIEWS have built something they are proud of and do not want to see it disappear. Fact Box: Imperial Brands plc So very early we discuss: Where would you fit within our portfolio? Why do we need you? Where is the comple- mentarity? What can we bring? How could we scale your brand? The acquisition should not feel like the end of the company. Ideally, it becomes phase two of its development. But that conversation also requires honesty. If achieving the value case means difficult decisions, you need to put those cards on the table before Day 1. You do not want the founder or CEO discovering after closing what integration really means. M&A REVIEW UK: You describe Corporate Development more as an enabler than as the owner of the acquisition logic. Lefèvre: Corporate Development is a support function. I do not decide on my own what the company should acquire. The relevant category and market teams need to be involved and sponsor the project. Business: Global consumer company operating across tobacco and next-generation nicotine products Headquarters: Bristol, UK Listing: London Stock Exchange; FTSE 100 Founded: 1901 Employees: approximately 25,000 globally Imperial Brands Plc Market presence: tobacco products sold in around 120 markets; smoke-free alternatives in more than 20 markets Imperial Brands Plc FY2025 reported revenue: £32.2bn FY2025 Tobacco & NGP net revenue: £8.316bn FY2025 NGP net revenue: £369m, up 13.7% year- on-year FY2025 Group adjusted operating profit: £3.988bn Imperial Brands Plc Strategic direction: Imperial’s strategy to 2030 combines sustainable value creation in its combus- tible portfolio with building scale in next-genera- tion products and a more consumer-centric, agile organisation. Imperial Brands Plc That matters because after the transaction I am not the person who will run the acquired company. They are. Key Learnings: Corporate Development can originate an opportunity, use its network and lead execution. But ultimately the business plan becomes their business plan. The best situation is when a market or category comes to us and says: we see this opportunity; help us make it hap- pen. Once we decide to pursue something, the people who will ultimately deliver the value need to be behind it. M&A REVIEW UK: What should other acquirers take from your approach? Lefèvre: First, build your network before you need it. The best businesses do not necessarily come looking for you. Second, be open with founders and management about what you intend to do after the acquisition. That transpar- ency builds trust and avoids difficult surprises later. And third, make sure the business owns the acquisition logic. Corporate Development can originate and execute, but it cannot substitute for the people who eventually have to create the value. For me, those things are closely connected: find the right opportunity early, develop a credible future together and make sure the people responsible for delivering that future genuinely believe in it. • • Integrate the source of scale – protect the source of difference. Distribution, regulatory expertise and back-office capabilities may be where the acquirer adds value; brand, consumer connec- tion and entrepreneurial ways of working may be what should remain distinctive. “No touch” needs active governance. Senior leaders need to define explicitly what will be integrated and what will deliberately be left alone. • Connection is not the same as integration. Shar- ing insight, expertise or market access does not require absorbing the target into the acquirer’s operating model. • Design the future before Day 1. Founders need to understand both the opportunity and the difficult choices before closing. • The business case must belong to the business. The managers who ultimately own the asset need to sponsor the value-creation logic. Julia Lefèvre joined Imperial Brands’ Corporate Development team in 2017 and is Corporate Development Director. She has led or played a significant role in a range of corporate transactions. Public company materials describe her as Head of Mergers & Acquisitions / Corporate Development Director. Before Imperial Brands, she worked in investment banking at Credit Suisse in France, the UK and Australia and in Corporate Finance at RELX plc. M&A REVIEW UK 2/2026 • Volume 1 4949

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REPORT • INTEGRATION & LEADERSHIP Agility Needs Direction: Why Organisations Must Balance Flexibility with Strategic Purpose Prof. Dr Florian Bauer, University of Bristol Business School & Simon Quinn, Moon Executive Search Introduction: Beyond the Buzzwords Why Agility Matters “Agility”, “resilience”, “lean”, “simplification” – these terms are everywhere. The real question is: what does agility actually do for your organisation – and, more importantly why should it matter? Organisations increasingly operate under conditions of volatility, uncertainty, complexity, and ambiguity. These conditions are not abstract; they manifest in concrete chal- lenges that affect firms across industries and geographies. The appeal of agility is intuitive. In a world characterised by rapid change, organisations must be able to respond quickly. However, the widespread endorsement of agil- ity has also led to an implicit assumption: that being agile is inherently beneficial. This assumption deserves closer scrutiny. Agility, as this article argues, is neither universally positive nor sufficient on its own. Rather, it is a capability that only creates value when embedded within a broader strate- gic context. Without such context, agility risks becoming directionless. Conversely, strategy without agility risks becoming obsolete. The central challenge for modern organisations is therefore not choosing between plan- ning and flexibility but integrating both in a meaningful way. Recent evidence highlights how firms are simultaneously exposed to geopolitical tensions, supply chain disruptions, rising energy costs, sustainability pressures, and evolving workforce expectations. These forces do not occur in isola- tion; they interact, creating what some executives describe as a “poly-crisis” environment. In such a setting, even well- established assumptions about markets and operations can quickly become invalid. Under these conditions, traditional approaches to strategy, built on predictability and long-term planning, begin to fal- ter. Forecasting becomes less reliable, and the idea that organisations can evaluate all relevant strategic options before making decisions becomes unrealistic. Opportu- nities emerge unexpectedly and often need to be seized quickly, before they disappear. 5050 M&A REVIEW UK 2/2026 • Volume 1

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This is precisely where agility becomes critical. Agility helps you move quickly when assumptions change. It’s about sensing, adapting, and responding at speed. But speed without purpose is just noise. The Tension Between Agility and Efficiency Yet, the growing emphasis on agility introduces a less vis- ible but equally important challenge. Agility comes at a cost. For years, organisations have optimised for efficiency: leaner teams, standardised processes, minimal slack. Agil- ity asks for the opposite – flexibility, decentralised deci- sion-making, and spare capacity. These requirements can conflict with established performance metrics, particularly those focused on short-term profitability. There is increas- ing recognition among executives that an exclusive focus on efficiency can create vulnerabilities. Organisations that optimise too aggressively may find them- selves unable to respond when disruptions occur. At the same time, however, an uncritical shift towards agility can create its own problems. Investments in flexibility can erode margins, and constant change can strain organisational coherence. This tension reflects a broader dilemma. Organisations must balance two competing logics: one that prioritises stability and efficiency, and another that emphasises adaptability and responsiveness. Neither can be ignored. The challenge lies in managing their interplay. When Agility Becomes Aimless The idea that organisations can operate effectively with- out a clear strategic direction has occasionally been voiced in managerial discourse. Some executives have suggested that in highly uncertain environments, strategy should give way to rapid, reflexive decision-making. While such views capture the frustration with rigid planning systems, they overlook a critical point: without direction, responsiveness alone is insufficient. Some organisations confuse agility with constant motion: new priorities every quarter, reorganisations every year, endless “rapid” initiatives. It feels dynamic. It often isn’t. REPORT • INTEGRATION & LEADERSHIP Strategy isn’t Dead – It’s Evolving Contrary to claims that strategy is becoming obsolete, there is strong evidence that it is becoming more impor- tant, albeit in a different form. In unpredictable environ- ments, strategy becomes less about rigid plans and more about guidance. Think of it as a compass, not a map. Good strategy sets: • a clear direction of travel • boundaries for decision-making • criteria for prioritisation It doesn’t script every move – it shapes the choices that matter. It answers questions such as: What kind of organi- sation do we want to be? Where do we want to compete? What principles should guide our decisions? These ele- ments act as guardrails within which more flexible, decen- tralised decision-making can take place. Recent managerial evidence suggests that organisations are moving away from long-term, highly detailed plans towards more layered approaches of planning. Short-term horizons remain relatively concrete, allowing for resource commitments and operational control. Beyond that, plan- ning becomes progressively more abstract, focussing on vision and broad direction rather than precise forecasts. This shift reflects an important insight: while it may be impossible to predict the future in detail, it remains essen- tial to define a direction of travel. Without such direction, organisations risk becoming opportunistic rather than strategic. Preserve and Adapt One of the most important implications of this shift con- cerns how organisations manage their existing activities alongside new opportunities. Modern strategy lives in the tension between: • preserving what reliably creates value • adapting to ensure future relevance Organisations must preserve those parts of the business that generate reliable cash flows and provide stability. At the same time, they must invest in new areas that ensure future viability. Leaning too hard on either side creates risk. Without a strategic anchor, agility can devolve into oppor- tunism. Activity rises. Impact falls. The art is in managing both – continuously. “We learned early on that being fast without being focused just burns energy. The real discipline is knowing which opportunities to move on and which to let pass – or on R&D projects which to abandon.” (Neil Douglas, Viper Innova- tions Ltd) Purpose as the Anchor If agility requires direction, the question arises: what pro- vides that direction in practice? Increasingly, attention has turned to the role of organisational purpose. M&A REVIEW UK 2/2026 • Volume 1 5151

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REPORT • INTEGRATION & LEADERSHIP In large and diversified organisations, decision-making authority is often distributed across multiple units. This decentralisation is necessary for responsiveness but can also create fragmentation. Business units may pursue their own objectives, leading to misalignment at the corporate level. Purpose can act as a coordinating mechanism in such contexts. Unlike formal strategy documents, which may change frequently, purpose reflects a deeper and more stable orientation. It is rooted in the organisation’s history, values, and accumulated decisions. When effectively artic- ulated and enacted, it provides a common reference point for decentralised decision-making. Importantly, purpose is not simply a communication tool. Its effectiveness depends on whether it is embedded in everyday practices. Organisations that successfully lever- age purpose often use it to make sense of change, linking new initiatives to established identities and narratives. This can reduce resistance and facilitate transformation. Integrating Top-Down Direction and Bottom-Up Adaptation Another key insight from both research and practice is that agility does not emerge from decentralisation alone. Instead, it depends on the interaction between top-down and bottom-up processes. Local units are typically better positioned to detect changes in their immediate environments. They possess context-specific knowledge and can respond quickly to emerging developments. However, without coordination, their actions may remain fragmented. At the same time, central functions – such as corporate strategy or portfolio management – are better equipped to understand the broader picture. They can assess how different activities fit together, identify synergies, and ensure alignment with overall objectives. Effective agility therefore requires a combination of both perspectives. It involves continuous interaction between local insights and central coordination. Rather than follow- ing a linear sequence of analysis, planning, and implemen- tation, organisations increasingly rely on iterative and inte- grated processes. “…and sometimes, you need a blind eye with the view that it is for a greater good.” (Neil Douglas, Viper Innovations Ltd) This aligns with findings from research on strategic agility, which emphasise the importance of coordination mecha- nisms in enabling firms to adapt effectively. It also resonates with work on acquisitions and integration, where organisa- tions must reconcile multiple, sometimes conflicting, signals. “Having understood the painful challenges that some of 5252 M&A REVIEW UK 2/2026 • Volume 1 our clients were experiencing we saw an opportunity which prompted a strategic pivot from mechanical and hydraulic products to electrical, electronic, and software-led services. Because we operated with an agile mindset and a clear Strategic Business Plan – defining where to compete, how to win, and what capabilities to build – we were able to rapidly realign our organisation and offerings. The result has been sustained high growth and industry recognition as an award- winning business.” (Neil Douglas, Viper Innovations Ltd) What This Means for Leaders The central implication is that agility should not be pur- sued in isolation – it must be connected to purpose and direction. Strategy should be used to orient but not control. Instead of attempting to predict and control the future, strategy should articulate a compelling vision, establish guiding principles, and ensure that these are consistently reflected in decision-making. At the same time, organisations need to invest in capabili- ties that enable responsiveness. This includes mechanisms for sensing changes in the environment, processes for real- locating resources, and structures that facilitate coordina- tion across units. Equally important is the need to maintain balance. Man- agers must resist the temptation to optimise exclusively for efficiency or agility. Both are necessary, and their relative importance may vary across contexts and over time. Finally, purpose should not be overlooked. In increasingly complex and decentralised organisations, it provides a crucial anchor, helping to align actions and sustain coher- ence in the face of change. Conclusion: Moving Purposefully in an Uncertain World Agility has become one of the defining concepts of mod- ern management, reflecting the realities of operating in uncertain and rapidly changing environments. However, as this article has argued, agility alone is not sufficient. Organisations that focus solely on being agile risk los- ing direction. Those that rely exclusively on planning risk becoming rigid. The challenge is to integrate both – com- bining flexibility with a clear sense of purpose and direction. Modern strategy is therefore less about detailed plans and more about providing orientation. It establishes the bound- aries within which agility can be exercised effectively. In this sense, agility and strategy are not opposing concepts, but complementary ones. The organisations that succeed will not be those that move the fastest, but those that move with intent. They will be

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able to adapt without losing coherence, to explore without drifting, and to respond without reacting blindly. Put simply, agility is most valuable when it is guided by direction. Prof. Dr Florian Bauer is Professor of Strategic Management at the Uni- versity of Bristol Business School. Florian investi- gates organisational transformation processes, especially non-organic growth strategies such as Mergers and Acquisitions (M&A), from strategic, organisational, and procedural perspectives. In particular, he investigates how firms should strategically think and organisationally embed M&A to survive in the long run and how firms can effectively manage the acquisition process. As engagement plays an important role for him, he regularly exchanges with executives, consultants, and M&A associations. He was actively involved in multiple M&A processes and supported a wide range of firms in developing acquisition strategies and acquisition integration approaches. Since February 2020, he has been editor-in-chief of M&A Review; he is also co-founder and chief research officer of MADiscover GmbH (www.madiscover. com), a start-up company that digitalised M&A screening. Furthermore, he is a board member of the German M&A Association. In 2022 he received the Medal for Research from the British Academy of Management. REPORT • INTEGRATION & LEADERSHIP Simon Quinn is an experienced leadership consultant and exe- cutive adviser who has been supporting boards, executive teams, and senior leaders since the mid- 1990s. As Director of Search & Leadership Con- sulting at Moon Executive Search, he works with organisations across the UK and internationally to strengthen leadership capability, enhance gover- nance, and improve organisational performance. A Fellow of the Institute of Recruitment Professionals and a Certified Professional Behavioural Analyst, Simon combines expertise in leadership assessment, executive search, organisational development, and board effectiveness. Since joining Moon Execu- tive Search in 2014, he has led retained search assignments and advisory programmes for listed PLCs, AIM companies, private equity-backed businesses, family-owned enterprises, charities, and privately held organisations. He specialises in partnering with Chairs, Non-Executive Directors, CEOs, and leadership teams to address complex organisational challenges. His consulting work spans board evaluation and effectiveness reviews, succession planning, leadership development, peo- ple strategy, and executive team performance. He is recognised for helping organisations build agile leadership structures that support sustainable growth and effective decision-making. AD M&A REVIEW UK 2/2026 • Volume 1 5353

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REPORT • INTEGRATION & LEADERSHIP Leading Through Uncertainty: What Really Happens During M&A Integration Dr Sam French, Virtual Services Company M&A transactions are built on models. Why uncertainty is unavoidable Before a deal closes, leaders develop financial models, synergy assumptions, integration assumptions and road- maps. Together, these create a sense of certainty about how the combined organisation will operate and where value will be realised. However, the reality of integration is rarely as predictable and straightforward as the deal model suggests. Decisions must be made with incomplete information, previously dis- guised dependencies begin to emerge, key people react in unexpected ways and operational priorities continue to change. Technology, customers and regulatory obligations introduce further complexity. These are not necessarily signs of poor planning; they are features of integrating two (or more) organisations that were not previously designed to operate as one. Uncertainty in M&A (Mergers and Acquisitions) integration is the gap between what leaders believe will happen and what actually emerges as the organisations are brought together. Uncertainty cannot be eliminated through more detailed planning because, before completion, the integra- tion team does not possess all the information needed to understand how the business operates. Some information may not be available because of confidentiality restric- tions. Other issues only become visible once the integra- tion workstreams begin operating across organisational boundaries. Decisions or changes that appear straightfor- ward within an individual function can create unexpected consequences elsewhere. A change to a system, process or role may negatively impact customers, regulatory obli- gations, reporting requirements or another part of the operating model. The success of an acquisition is therefore not determined solely by the quality of the original deal model or the inte- gration plans; it is dependent on the organisation’s ability to recognise, understand and manage uncertainty after the deal closes and throughout the integration process. The purpose of integration management is therefore not to remove uncertainty. It is to identify it early, understand how it moves across the organisation and create an inte- gration programme capable of responding when reality differs from the original integration thesis. 5454 M&A REVIEW UK 2/2026 • Volume 1

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REPORT • INTEGRATION & LEADERSHIP Across M&A integrations, uncertainty consistently emerges in six interconnected areas: the integration plan, people, technology, customers, operational reality and leader- ship and decision-making. Each area creates its own chal- lenges, but changes in one will often have consequences across several others. edge or maintain important relationships. Leaders must therefore look beyond job titles and organisational struc- tures. Understanding who people rely on, where knowl- edge sits, and how work is actually completed is essential before roles, processes or reporting lines are changed. The people plan should evolve as these dependencies become visible. Six areas of uncertainty: The myth of the perfect plan Integration planning is essential. But even the most detailed plan is based on theories and assumptions made at a particular point in time. It reflects the information available before close, the priorities under- stood at that stage and an anticipated view of how the two (or more) organisations will strategically fit together. It cannot fully represent the operational reality that will emerge once integration begins. Plans are often treated as finite, fixed commitments rather than working hypotheses. This can create false confi- dence and discourage teams from questioning assump- tions when new information becomes available. Hidden dependencies, changing stakeholder expectations and conflicting priorities require the original plan to be updated to reflect the new information. A strong integration plan should provide direction without creating rigidity. Leaders must be clear about the intended outcomes of the acqui- sition while remaining prepared to change the route used to achieve them. Adaptation is not evidence that the plan has failed; it is a necessary response to greater knowledge and may lead to a better outcome. Integration planning is an iterative process. People: the biggest unknown An organisational chart provides names, roles and report- ing lines. It does not show how the organisation really operates. Informal relationships, individual influence, trust, institutional knowledge and the people who resolve prob- lems outside formal processes are largely invisible before integration begins. This creates significant uncertainty. Key employees may leave before retention plans are activated, while others may remain but become disengaged. Uncertainty sur- rounding roles, reporting lines and future opportunities can reduce productivity and increase resistance. Cul- tural differences that appeared manageable during due diligence may become more pronounced when teams across the businesses are required to make decisions and work together. Integration decisions can also unin- tentionally remove the people who hold critical knowl- Technology: more than a systems challenge Technology integration is often presented as a sequence of system migrations, data transfers and application rationalisation. In reality, the technological landscape is rarely fully understood before close. Legacy systems may support critical processes through undocumented workarounds and the connection between systems, data and operational activity may only become visible when changes are attempted. Incomplete or inconsistent data can delay migrations and undermine decision-making. Cybersecurity vulnerabilities may emerge during integration, particularly when access arrangements change or previously separate networks are connected. Transitional Service Agreements (TSAs) can create further uncertainty where critical services remain dependent on the seller, third-party providers or shared infrastructure for longer than anticipated. Technology decisions therefore cannot be made in isola- tion. Retiring, replacing or integrating a system can affect employees, customers, financial reporting and regula- tory compliance. Integration leaders need visibility of the technological architecture, the operating model and the business processes that the systems support. Dependen- cies should be mapped and tested before systems are changed, with contingency and roll-back plans available where the operational impact remains uncertain. Customer uncertainty During integration, leadership attention naturally turns inwards. Teams focus on organisational design, systems, processes and governance. However, customers continue to expect consistent communication, service and relation- ship management throughout the change. Uncertainty can emerge when customers receive con- flicting or incomplete messages about the acquisition. Changes to products, services, account managers, or delivery processes may create confusion or concern, even when the intention is to improve the customer experience. Service disruption may also occur when employees are distracted by integration activity (such as technological changes to customer-facing systems) or unclear about new responsibilities. M&A REVIEW UK 2/2026 • Volume 1 5555

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REPORT • INTEGRATION & LEADERSHIP Customer relationships can be particularly vulner- able where they depend on specific individuals. If those employees leave or their roles change, valuable knowl- edge of the customer and trust may be lost. Sales teams may also become focused on internal decisions at the expense of maintaining the external relationships that bring in revenue. Customer impact should therefore be assessed as part of every significant integration decision. Leaders need to understand what will change, which customers may be affected and how relationships and service continuity will be protected while the organisation transitions. Operational reality The integration plan describes how the combined organi- sation is expected to operate. Operational reality reveals whether that design is achievable. Once integration begins, teams frequently discover that governance arrangements, processes, controls and responsibilities are less consistent or clearly defined than anticipated. A Target Operating Model (TOM) can provide a valuable view of the intended future organisation, but it does not automatically explain how either business operates today. Processes may be undocumented, responsibilities may overlap and key controls may depend on individuals rather than on formal governance. Data may also be held across different systems, interpreted differently by each organisation, or in some cases still with the seller. Regu- latory and compliance obligations introduce additional layers of complexity. Different entities, products and juris- dictions may be subject to different requirements, while seemingly straightforward integration decisions can cre- ate unintended regulatory consequences. Integration leaders must therefore establish the current operational reality of both organisations before deciding how they should fit together. This means looking beyond documented processes and understanding how work is actually performed, where decisions are made and which dependencies must be maintained during transition. The Target Operating Model should then evolve as this knowl- edge becomes available. Leadership and decision-making under uncertainty the consequences can create further disruption across the programme. Many executives will lead only a small number of inte- grations during their careers. They may be experienced business leaders without having extensive integration experience. At the same time, they remain responsible for running the existing business and managing competing operational priorities. Integration therefore competes for limited leadership attention at precisely the point when clear direction and timely decisions are most important. The absence of an agreed Target Operating Model can increase this uncertainty. Without a clear view of the intended future organisation, workstreams may make decisions independently and create conflicting outcomes. Governance can also become ineffective where there are too many meetings, unclear decision rights or issues that repeatedly move between forums without resolution. Effective leadership does not require certainty. It requires leaders to establish a clear strategic direction, define who has authority to make decisions and remain open about the assumptions and risks informing decisions. What successful integration programmes do differently Successful integration programmes do not attempt to eliminate uncertainty. They create the visibility, govern- ance and flexibility needed to manage it. In practice, five actions are particularly important: 1. Define the strategy. Leaders should communicate both the strategic rationale for the acquisition and the integration strategy. The programme needs to under- stand not only what the rationale for the deal was, but how the organisations will be brought together to achieve that outcome. 2. Maintain programme-wide visibility. Integration leaders need oversight across all workstreams so that emerging issues and changes are not managed in iso- lation. 3. Map dependencies. Dependencies and interdepend- encies should be identified across the entire integration programme, not only within individual workstreams. A decision made by one function may alter the plans, risks or timelines of several other workstreams. Leadership during integration requires decisions to be made before the full picture is available. Delaying every decision until uncertainty has been removed is unrealistic, but moving too quickly without understanding 4. Make risks transparent. Risks should be documented, visible and actively mitigated. Uncertainty becomes more dangerous when teams feel unable to raise con- cerns or when risks remain hidden within individual workstreams. 5656 M&A REVIEW UK 2/2026 • Volume 1

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REPORT • INTEGRATION & LEADERSHIP 5. Build adaptability into the programme. Contingencies should be considered from the beginning. Integration plans must provide direction while allowing the pro- gramme to respond when assumptions change or new information emerges. The success of an acquisition is not determined solely by the quality of the deal model. It is also determined by the organisation’s ability to navigate uncertainty after the deal closes whilst remaining focused on the strategic outcome the acquisition was intended to achieve. Conclusion: managing rather than eliminating uncertainty Uncertainty is not evidence that an integration has been poorly planned. It is an inevitable consequence of bringing together organisations with different people, systems, pro- cesses, customers and ways of operating. The limitations of the original plan only become visible as the integration progresses and greater knowledge becomes available. Successful integration therefore requires more than deliv- ering against a fixed roadmap. It requires programme- wide visibility, transparent risk management, clear leadership and an understanding of the dependencies connecting each area of the organisation. Plans must be sufficiently stable to provide direction but adaptable to respond to operational reality. In summary, uncertainty cannot be eliminated. It can only be identified, understood and managed. Dr Sam French is an M&A integration and separation specialist with over 15 years’ experience delivering acquisi- tions, divestitures and carve-outs across sectors including pharmaceuticals and life sciences, financial services, telecommunications, media, technology, professional services, events and business informa- tion. Her expertise spans the transaction lifecycle, including due diligence, Day 1 readiness, target operating model design, transitional service agree- ments and post-deal integration and separation. Her doctoral research examined the operational and organisational realities of complex corporate separations. AD THE NEXT DEAL IS SURE TO COME Stay up to date with all the latest M&A news. Whether it’s transactions, personnel matters or general information: In mandaco’s M&A Newsroom, you’ll find all the latest news straight from the companies involved, advisers and service providers Read directly at: newsroom.manda.co M&A REVIEW UK 2/2026 • Volume 1 5757

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REPORT • CULTURE & INTEGRATION Living legacy Organisational history as integration tool Dr Lara Pecis, Cardiff University & Dr Bingbing Ge, Lancaster University Management School Introduction One of the often-debated topics in today’s organisations is the time spent by different stakeholders in the firm inte- grating functions, professionalising operations and man- aging cultural change during the acquisition process. And to do so in a way that brings success, not failure, of the post-merger integration process. What is often overlooked, however, is a powerful tool every organisation has: the strategic use of organisational history. Our research into the acquisitions and changes of a medium-sized family-owned business has shown that companies can use ’rhetorical history’, the deliberate (stra- tegic) interpretation and communication of the past, as a mechanism for integration, stakeholder alignment and value creation. Our work provides an alternative and integrative view on post-merger integration success and failure and adds to the debate by bringing in the role of rhetorical history. Below we use the case of the evolution of an Italian pack- aging company, referred to as ’Alpha’, from a local family firm into an international group to illustrate the integration potential of rhetorical history. The challenge at stake: competing goals inside a growing organisation As organisations expand, they often encounter compet- ing priorities. These become even more muddled when different family members in the ownership group envi- sion different goals and futures for the organisation. Founders may want to preserve the culture whilst inves- tors demand growth. Some family owners may focus on growth whilst their relatives demand family preservation and control. At Alpha, these dynamics came to a head in its devel- opment. Conflict emerged between family-centred goals (preservation of family’s role in the business and the local community) and business-centred goals (ori- ented towards innovation, growth, professionalisation and internationalisation). Part of the family wanted the company to expand, grow in the Italian (through an IPO and acquisitions of other local businesses) and interna- tional markets (through acquisitions and expansions of operations). Another part of the family wanted to main- tain the family-centric and community-based character of the organisation, a characteristic that made Alpha successful for over 50 years and provided significant 5858 M&A REVIEW UK 2/2026 • Volume 1

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REPORT • CULTURE & INTEGRATION reputational guarantees. This led to a tension that went beyond family dynamics and kitchen table discussions. It affected how the organisation was managed, change defined and implemented. Ultimately, the family moved towards a deliberate, strategic use of their history and the founder’s legacy to implement change. In what fol- lows we point to some of Alpha’s winning points for its growth and how other firms may benefit from thinking of the role of rhetorical history in their organisation. sued an IPO, expanded internationally, hired professional managers to cover key strategic positions and under- took acquisitions. These moves increased organisational capability and growth potential, but they also threatened the identity of the company. Whilst still playing within the innovation narrative, the issue shifted towards the need to professionalise (and let go of some family-centric dynamics). This led to a core dilemma for the family own- ers: to professionalise or not to professionalise? Integration through narrative alignment A key insight from our study is that successful integration requires more than structural change. It requires narrative alignment. The family tensions and diverging priorities exacerbated into a major leadership conflict in Alpha. Alpha faced a paradox between two conflicting goal systems: ’happy family’ and ’successful company’, sustained by two differ- ent strands of the family. Different family members held divergent visions for the firm’s future. On one hand, har- mony and continuity were at the forefront. On the other, innovation and aggressive growth were central to their strategy. The turning point did not happen through gov- ernance decisions; it happened through a shift in organi- sational storytelling. The firm’s history was gradually reframed around innova- tion. What was stressed was the innovative character of the founder, her out-of-the-box thinking and willingness to work hard to achieve ambitious goals. Emphasis was also put on her commitment to the family and the local com- munity. The reframing of this narrative happened through internal communications, anniversary celebrations, sus- tainability reports, newsletters and executive messaging all reinforcing a narrative that presented innovation as the company’s historical and defining characteristic. By linking future growth initiatives to a story of past inno- vation, management created legitimacy for strategic change. The success of this narrative reframing evi- dences that people are more willing to support transfor- mation when it is presented as a continuation of who the organisation has always been rather than a move away from its heritage. In essence, Alpha did not introduce innovation as a new strategic priority; it claimed – and put effort into sustaining this narrative - to have always been innovative. The ’big family’: Creating value through professionalisation Whilst this first conflict subsided and found an organic resolution, Alpha faced a second challenge when it pur- External expertise and professionalisation were seen as needed to generate value and scalable systems. These initiatives were deemed key given the internationalisation and expansion strategy. Yet, they also posed a challenge: they could weaken the cultural bonds that made the company successful in the first place. The turning point came through a further reframing of the company narra- tive: instead of positioning professionalisation as change, Alpha rooted it in their family business narrative. Alpha moved from being a family business to a business with a ’bigger family’ that included employees, managers and the newly integrated stakeholders. This renewed ’bigger family’ narrative served two objec- tives simultaneously: it preserved the original identity of the family business whilst enabling organisational growth (i.e., economic objective) through cultural integration (i.e., social objective). In short, Alpha proposed itself as a ’big family’ where everyone has an opportunity to co-create its future. From celebrating employees and their personal life achievements, to involving them in strategic thinking, Alpha managed to justify a professionalisation that was necessary for its future growth. Why this matters for acquisitions and integration integration. Traditional Our findings speak to organisations managing post- merger initiatives focus on systems, governance and processes. However, we argue that mergers might fail because of unresolved tensions across multiple and at times conflicting visions of the organisational identity. integration The study demonstrates the importance of managing these different stakeholder understandings of organi- sational history for value creation. Value creation can be supported when organisations develop shared identity through creating historical narrative(s) that connect their legacy to future-oriented goals. Alpha was successful in its acquisitions and growth in part because it was able to use its history to construct two narratives that united different stakeholders and made these stakeholders co- authors of the organisation’s future story. This created a clear and common purpose around its innovation-ori- ented future. M&A REVIEW UK 2/2026 • Volume 1 5959

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REPORT • CULTURE & INTEGRATION The case prompts leaders in the organisation to ask: • What aspects of the organisational history currently support our future strategy? • What elements of the organisation and owner’s legacy can be mobilised to connect with employees and new stakeholders? • How can change be framed as part of the ongoing jour- ney rather than a disruption? Our work highlights the importance of the co-created nature of organisational narratives. Successful organisa- tional narratives are rarely imposed from the top. Rhetori- cal history, as the strategic use of history (in this case for growth), was not constructed solely by the owning fam- ily of the business. Non-family stakeholders, employees, acquired business owners and their employees contrib- uted to shaping the future-oriented narrative and in doing so reinforced the company’s evolving history. This allowed the organisation to capitalise on internal commitment and credibility. The case shows that this framework (histori- cal narratives and strategic orientation) could help man- agement see where historical narratives could come into use to address conflicting expectations while maintaining strategic continuity and stakeholder trust. For business leaders the message is clear: integration co- produced narratives are most effective when stakehold- ers become authors rather than audiences. History is not merely a record of the past; it is a strategic device that AD can bring growth and enhance commitment, preserve organisational identity for the future and enable sustain- able value creation. Dr Lara Pecis is Senior Lecturer in Management, Employment and Organisation at Cardiff University, Cardiff Business School, UK. Lara is interested in tackling the darker sides of innovation and entrepreneur- ship. Her research engages with critical theory to explore inequalities at work, with particular focus on voices from the margins. Her research is publis- hed in scholarly journals, such as British Journal of Management, Human Relations, Business History, Gender Work and Organisation, Entrepreneurship and Regional Development, Organisation, Equality, Diversity and Inclusion, among other contributions in edited books, and parliamentary enquiries. She is a Fellow of the Higher Education Academy, member of the Innovation Caucus, and Associate Editor of’ Culture and Organization’ and ’Gender, Work and Organisation’ journals. Dr Bingbing Ge is an Assistant Professor at Lancaster University Management School and ranks #15 globally in family business research. Bridging academic rigor with market practice, her research focuses on rhetorical history, family enterprise governance, strategic transformation, and intergenerational succession. Her work examines how ownership dynamics, family practices, and strategic identity influence value creation and corporate longevity. She serves on the editorial review boards of leading international journals and advises business owners, executive boards, and investors on governance, strategic continuity, and ownership transition across European and Asian markets.

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REPORT • M&A ADVISORY Why good advisers manage more than the transaction The Personal Dimension of M&A Advisory Dr Roman Barwinski, University of Bristol Business School Introduction It is no longer controversial to describe M&A as a people business. Yet the phrase usually directs attention towards culture after closing or the emotions of an owner selling a company. Less is said about the personal work performed by external advisers while a transaction is still live, when uncertainty, mistrust and pressure can alter the quality of the decisions being made. Our conversations with advisers and their clients suggest that technical competence is only the starting point. Cli- ents valued advisers who made unclear priorities explicit, protected their attention, repaired communication and remained steady when the process became unstable. These contributions influenced buyer choice, the handling of due diligence, who participated in critical meetings, and the terms ultimately negotiated. This is the central point: the personal work is not a softer activity alongside execution. It is part of execution. This work is not required only when clients lack transac- tion experience. A first-time seller may have no bench- mark for what is normal in a deal. An experienced cor- porate acquirer may possess established routines while still facing a transaction shaped by a unique relationship history, entrenched mistrust or unusually personal con- sequences. Experience reduces some forms of process uncertainty. It does not remove the human dynamics of a particular deal. The interviews point to three connected responsibilities. Advisers support the client’s capacity to decide and act, manage the relationships through which the transaction must proceed and regulate their own behaviour as par- ticipants in the process. Together, these three responsi- bilities constitute an often-overlooked dimension of M&A advisory work. Experience changes the need for advice but does not remove it The visible mandate normally concerns valuation, due dil- igence, negotiation or documentation. Behind it sit objec- tives that are harder to express. A seller may want an attractive price while also seeking a clean exit, continuity for the company and the ability to meet former employ- ees without embarrassment. A buyer may need to secure an important business relationship while negotiating with owners who believe that earlier interactions have left them exposed. M&A REVIEW UK 2/2026 • Volume 1 6161

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REPORT • M&A ADVISORY These concerns are not distractions from the commercial deal. They help define the deal, or what an acceptable transaction looks like. They influence which buyer is cred- ible, which protections are necessary, how quickly the parties can move and whether an agreement will survive beyond signing. The adviser must first discover what success means to the client. That requires more than asking for a target price. It means listening for issues that appear indirectly: how quickly an owner wants to leave, which responsibilities they still feel towards employees, what kind of buyer they could trust, or which relationships are preventing progress. An experienced acquirer can still struggle when stand- ard transaction routines meet a relationship that can- not be standardised. Internal teams may understand the mechanics of M&A extremely well while being too embedded in earlier exchanges to reset the conversa- tion. In that setting, the adviser contributes distance as well as expertise. The value lies not in teaching an expe- rienced client how acquisitions work, but in helping to see how this particular transaction is being shaped by history, interpretation, and behaviour. Supporting decision-making and coordinated action A transaction creates an additional decision system around people who must usually continue running the business. Information arrives from several advisory teams, deadlines compress and minor questions can acquire disproportionate significance. At some point, transaction complexity becomes attention complexity. Fatigue becomes a transaction risk because it affects what decision-makers notice, how they interpret resist- ance and how quickly they react. The adviser provides additional decision capacity. For a first-time client, that may include pattern recogni- tion: explaining whether a bidder’s behaviour is normal, whether a demand is negotiable and whether a difficult week signals genuine failure. For an experienced client, it may mean supplying independent challenge, relational distance or a stable point through which competing inter- nal and external views can be consolidated. A timetable, clear decision criteria and a disciplined flow of information do more than create efficiency. They protect judgement. The client remains responsible for the decision, but does not have to interpret every sig- nal, coordinate every specialist or respond personally to every request. Process discipline can therefore be a form of personal support without becoming paternalistic. Listening for the real mandate The initial request is rarely the complete mandate. A cli- ent may ask for a sale contract when a competitive pro- cess is needed. Another may ask an adviser to complete a document when communication between the parties has already broken down. Starting with the requested deliver- able can mean solving the wrong problem efficiently. 6262 M&A REVIEW UK 2/2026 • Volume 1 In one transaction, the value of the adviser lay partly in hearing what was being said between the lines and stat- ing the underlying objective more clearly than the client could. In another, the adviser deliberately stepped back from drafting and asked what each side needed before a contract could work. In both situations, listening changed the deal process. This diagnosis requires patience. Advisers are trained and paid to provide answers, which creates a natural tempta- tion to demonstrate expertise quickly. Personal work often begins by resisting that temptation long enough to under- stand the actual decision the client is trying to make. Holding pressure without taking over Transaction pressure accumulates unevenly. It often peaks during due diligence, after an unexpected request or when one party tries to force the timetable. Owners and execu- tives can then react to the pressure of the moment rather than to the objectives with which they entered the process. Advisers can contain some of this pressure by consolidat- ing repeated questions, filtering communication and esca- lating only those matters that genuinely require the client’s judgement. They can absorb frustration without reproduc- ing it in the next conversation. Good advisers create a gap between reaction and decision. This is not passive reassurance. It may require telling a cli- ent not to make a call, resisting a superficially attractive offer, changing who attends a meeting or insisting that an uncomfortable issue be addressed. The objective is not to keep everyone comfortable. It is to keep the client capable of making sound decisions under pressure. The boundary remains important. Clients retain author- ity over their objectives and major commitments, while advisers may exercise substantial discretion within agreed limits. An experienced client may value an adviser who resolves routine matters independently, recognises when a compromise remains acceptable and escalates only the decisions that require the client’s judgement. Good personal work therefore includes knowing when to listen, when to challenge, when to act and when to leave a responsibility with the client. Trust is essential and makes appropriate delegation possible, while transferring owner- ship of the decision.

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Managing the transaction relationship Some transactions begin with trust. Others inherit years of suspicion, failed conversations or assumptions about the other side’s intentions. In those circumstances, an adviser who reacts defensively can add another conflict to the deal. An adviser who can absorb the reaction, identify its source and reopen communication protects the possibility of agreement. A new adviser may be useful precisely because they are not associated with earlier disputes. They can ask why information is needed, explain the purpose of a contrac- tual protection and acknowledge what the other side has achieved without surrendering the client’s position. This does not make the adviser neutral. It makes advocacy more effective by separating the client’s interests from avoidable antagonism. Trust has direct operational consequences. It determines whether clients disclose their real priorities, allow advisers to speak on their behalf and accept advice that conflicts with their immediate instinct. It also affects how counter- parties interpret requests. The same diligence question can be understood as a reasonable need for assurance or as evidence that the other side intends to exploit them. Credibility cannot be created through generic expressions of respect. It comes from learning how the company works, recognising the effort behind it and explaining requests in language that connects with the other party’s experi- ence. In owner-managed businesses, people notice quickly whether an adviser understands the company as an oper- ating organisation or sees only an asset being transferred. Turning personal concerns into deal choices Participants in a transaction can attach different personal significance to the same commercial decision. Owners may be concerned with financial security, continuity and leaving a business they have shaped. Managers may be considering their future roles. Experienced investors and executives may have stakes in reputation, remuneration and standing within their organisations. Even owners of the same company can have different time horizons and preferences about continued involvement. The adviser needs to understand these differences and how they enter the conversation. A financial question may be heard as a challenge to an owner’s competence; a routine request may create uncertainty about a man- ager’s future. Explaining the purpose of a request and the reasons for resistance can help the parties find a work- able response. How a bidder treats management and responds to uncertainty can also inform the assessment of the future relationship. REPORT • M&A ADVISORY But understanding these concerns is not enough. They have to be translated into transaction choices. A clean exit needs a defined transition and end date. Concern for con- tinuity must influence buyer selection and the evaluation of the buyer’s plans. Different shareholder priorities may require different arrangements for liquidity and continued participation. Questions of authority may require explicit decisions about who attends meetings, speaks for each side and approves commitments. If personal concerns remain confined to sympathetic conver- sations, they disappear when formal negotiation begins. The adviser adds value by converting them into process choices, decision rules and terms that survive transaction pressure. Managing oneself Advisers are not outside the human system of a deal. Their own reactions can calm or intensify it. Anger can invite defensiveness. Ambiguity can create pressure to sound more certain than the evidence permits. Professional sta- tus can make it difficult to challenge a senior colleague or admit that something is not yet understood. Personal discipline begins with noticing these pressures. It can mean pausing before replying, saying that an explana- tion is unclear, acknowledging a mistake or raising a diffi- cult point directly with a more senior professional. Genuine appreciation can create more credibility than polished dis- tance. None of this weakens expertise. It prevents the per- formance of expertise from displacing the client’s problem. Authenticity does not remove the need for role discipline. Advisers must still represent their client, protect confidential information and retain independent judgement. A constructive relationship with the other side is valuable because it helps the client’s transaction, not because the adviser has ceased to be an advocate. The challenge is to advance the client’s interests without treating every interaction as a contest. Advisers must also examine their incentives. Fees, timeta- ble pressure and the desire to announce a completed deal can narrow attention towards signing. The client’s defini- tion of success may instead require a slower process, a lower-priced buyer with a more credible plan, protections that complicate negotiation or a decision not to proceed. Sometimes the best advice is therefore advice that makes completion less likely. Trust is sustained when the adviser continues to apply the client’s criteria even when another route would be easier. Making personal work sustainable The experiences described here raise a practical ques- tion for advisory firms: can this capability be designed, M&A REVIEW UK 2/2026 • Volume 1 6363

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REPORT • M&A ADVISORY rather than simply left to particularly gifted individuals? Clients remember advisers who answered late at night or remained present during a crisis, but sustained avail- ability places demands on the people providing it. Firms should consider how relationship continuity, team sup- port and clear escalation arrangements can preserve the quality of judgement. The following practices offer ways to develop that capability beyond the efforts of an indi- vidual adviser. A more sustainable design combines senior continuity with one clear point of contact and a team capable of challenging itself. The client should know who owns the relationship, while specialist work is coordinated behind that person. Repeated questions can be consolidated, internal disagreement can be examined before it reaches the client, and alternative views can be raised without weakening accountability. Advisory firms can make this capability more systematic. Engagement teams should record personal objectives alongside financial and legal objectives, map strained relationships before deciding who attends meetings and discuss changes in counterpart behaviour as seriously as changes in valuation. Deal reviews should examine where the team absorbed pressure well, where it transferred unnecessary complexity to the client and whether com- mercial incentives affected its advice. These practices do not turn advisers into therapists. They recognise something more straightforward: transac- tion quality depends partly on the quality of the deci- sions people are able to make. Advisers should therefore develop their listening, mediation and self-management skills as deliberately as their capabilities in modelling, negotiation and drafting. What clients remember Clients measure a transaction through price, terms and closing certainty, but they describe the personal contribu- tion of advisers differently. They remember someone who identified what really mattered, protected their attention, delivered difficult advice and remained steady when the process became unstable. For a first-time seller, the adviser may supply experience and orientation. For an experienced acquirer or inves- tor, the contribution may lie in independent challenge, informed delegation or a route through difficult relation- ships. The personal dimension of M&A advising is therefore not an alternative to technical excellence. It is what allows technical excellence to work under the conditions in which real transactions take place. Models, contracts, 6464 M&A REVIEW UK 2/2026 • Volume 1 and processes remain essential, but they are used by people operating under pressure, uncertainty and some- times mistrust. The best advisers do more than execute the transaction. They help clients remain capable of making good deci- sions while the transaction is being executed. Dr Roman Barwinski is a Lecturer (Assistant Professor) in International Business and Strategy at the University of Bristol Business School. His research examines strategic decision-making by top management teams and entrepreneurs, with a particular focus on mergers and acquisitions.

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REPORT • RESEARCH & INSIGHTS M&A FOMO! How Social Media Shape M&A Decisions1 Dr Christoph Brielmaier, University of Bamberg, Dr Moritz Reis, University of Würzburg, Prof. Dr Martin Friesl, University of Bamberg, NHH Norwegian School of Economics & Prof. Dr Roland Pfister, Trier University 1. Acquisitions: Strategic decision or herd behaviour instead? Acquisitions are a key driver of corporate strategy. The stra- tegic selection and valuation of suitable targets, alongside their monitoring, are central to positioning companies for the future. The strategic selection of targets ideally follows a sustainable and sound logic of value creation. Such a logic explicitly articulates the specific contribution a particular acquisition can make, such as complementary technologies and markets or cost synergies and how these contributions can be realised, for example through target integration. So far, so simple, or so it seems! Although the approach outlined above is unlikely to face much criticism, it nevertheless rests on a problematic assumption: that acquisition decisions are the result of rational, strategic considerations. Indeed, research in the field of M&A shows that acquisi- tions are frequently not rooted in strategic decisions at all. Instead, they are often driven by much less rational forces. 1 This article originally appeared in the German edition of M&A REVIEW (issue 5/2026) Acquisitions are commonly the result of herd behaviour in short-lived ’industry fads’, which manifest in cyclical M&A waves.2 Indeed, sociologists have given this phenom- enon an apt, if unwieldy, name: mimetic isomorphism.3 It describes how companies operating under uncertainty mirror other market players they view as exceptionally legitimate, capable, and successful. The visible behaviour of these players is copied in order to be viewed as legiti- mate and successful as well. The risks are obvious. While early movers often still enjoy advantages, herd behav- iour frequently leads to inflated purchase prices that can diminish or even eradicate the future value contribution of an acquisition.4 In the worst-case scenario, there is no stra- tegic rationale whatsoever for an acquisition, leaving both the target and the acquiring company worse off. 2 McNamara, G. M., Haleblian, J., & Dykes, B. J. (2008). The performance implications of participating in an acquisition wave: Early mover advantages, bandwagon effects, and the moderating influence of industry characteristics and acquirer tactics. Academy of Management Journal, 51(1), 113-130. 3 DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48 (2), 147-160. 4 Carow, K., Heron, R., & Saxton, T. (2004). Do early birds get the returns? An empirical investigation of early‐mover advantages in acquisitions. Strategic Management Journal, 25 (6), 563-585. M&A REVIEW UK 2/2026 • Volume 1 6565

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REPORT • RESEARCH & INSIGHTS This raises the question of what drives ubiquitous herd behaviour in companies. That is: What market signals trig- ger ’M&A FOMO’ (fear of missing out)? Existing research demonstrates that board interlocks serve as an informa- tion channel fuelling M&A FOMO.5 This makes intuitive sense: Information regarding planned transactions comes directly from the source, possessing high density and qual- ity. This enables board members to thoroughly evaluate both the strategic relevance and the intended value con- tribution of planned acquisitions. However, we must assume that gathering information via board interlocks is a special case. Not all M&A signals are of this quality. Quite the contrary: decision-makers are exposed to a vast amount of information that makes identifying suitable targets a major challenge. One source of this information flood is social media, particularly LinkedIn. This professional social network has long estab- lished itself as a central channel for communication and self-marketing. The information landscape surrounding acquisitions on LinkedIn is twofold: on the one hand, social media acts as a source of market sentiment and rumours; on the other, there are confidential, organisational chan- nels and verified facts. Against this backdrop, the question arises whether information from LinkedIn plays any role in acquisition decisions at all. We investigated this ques- tion in a recent study published in the journal Long Range Planning.6 2. Acquisitions in the Attention Economy It is useful to frame the impact of social media on acquisition decisions as a problem of attention alloca- tion. Attention is the prerequisite for data-driven corpo- rate decisions, yet management’s attentional capac- ity is extremely scarce. Acquisitions are just one way to implement strategic options, meaning investments in M&A compete against various other initiatives. Extensive research in recent years has demonstrated that attention allocated to specific strategic options depends not only on the interests of key actors but is heavily influenced by the organisational context. This includes key executives, organisational rules and processes but also the availabil- ity of specific resources.7 This context makes the selec- tion of specific problem definitions and courses of action more, or less, likely. An increasingly important contextual variable is social media. Through these platforms, we connect with indi- 5 Haunschild, P. R. (1993). Interorganizational imitation: The impact of inter- locks on corporate acquisition activity. Administrative Science Quarterly, 38, 564-592. 6 Brielmaier, C., Reis, M., Friesl, M., & Pfister, R. (2025). Who sits at the table? LinkedIn exposure shapes managers’ situated attention and strategic prefe- rences. Long Range Planning, 102586. 7 Bauer, F., & Friesl, M. (2024). Synergy evaluation in mergers and acquisitions: an attention‐based view. Journal of Management Studies, 61 (1), 37-68. 6666 M&A REVIEW UK 2/2026 • Volume 1 viduals both inside and outside the organisation; they serve as news portals, marketing channels, and above all, they are omnipresent. Social media platforms like LinkedIn have become an integral part of everyday busi- ness life, especially as viewed from mobile devices. We consume content on LinkedIn while waiting for a train, in between meetings, or even casually during a meeting. Everybody can likely think of many other daily scenarios where social media comes into play. Attention research suggests that this omnipresence turns social media into a ’regulator’ of attention, thereby shaping strategic deci- sions. Based on this perspective, we examined the extent to which content on social media platforms like LinkedIn can direct managerial attention towards acquisitions.8 3. So what? How Does LinkedIn Shape Attention? 3.1 The Experiment The experiment was conducted with 138 executives. The goal of the experiment was to investigate whether and how consuming LinkedIn posts influences these executives’ strategic preferences. To simulate this situation, the experiment mirrored the use of LinkedIn within the context of a strategic deci- sion in which participants assumed the role of CEO of an automotive supplier. All participants were initially pro- vided with information about the company and its cur- rent situation, alongside a notice that the next manage- ment meeting would begin in a few minutes. To pass the time, participants were asked to scroll through a fictional LinkedIn feed. The key element of the experiment lay in the design of this feed: participants were exposed to dif- ferent versions of this feed, and we systematically var- ied the content on display. Half of the feeds were domi- nated by posts about corporate acquisitions, whereas the other half primarily featured organic investments, such as investments in new technologies, production capacity, or employee development. This created a dis- tinct thematic focus in the LinkedIn feeds for each par- ticipant group. Furthermore, typical characteristics of the LinkedIn posts were also varied, specifically, the author’s hierarchical position (employee versus top manager) and the posts’ social resonance (few vs. many likes and com- ments). After scrolling through the feed, participants were surveyed regarding their satisfaction with the company’s current status, and they were asked to allocate a budget of $100 million across various strategic options (acquisi- tions versus organic investments). 8 Ocasio, W. (1997). Towards an attention‐based view of the firm. Strategic Management Journal, 18(S1), 187-206.

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REPORT • RESEARCH & INSIGHTS Fig. 1 Effect of LinkedIn consumption on M&A investment decisions of normal managers as well as participants in top management roles Source: based on Brielmaier et al. (2025) +18.5 + 147% +7.6 Managers (Average) Additional investment in the option predominantly featured in the LinkedIn feed (Mio. $) Top Managers (C-Suite, VPs) 3.2 The results The experimental results demonstrate a striking effect. Figure 1 shows that even brief exposure to LinkedIn posts had a lasting impact on participants’ strategic preferences, resulting in significantly higher budget allocations towards the option predominantly featured in their LinkedIn feed. From the available budget, executives invested an aver- age of around $7.6 million more in whichever strategic option was featured prominently in their LinkedIn feed. In other words, when the feed was dominated by acquisi- tion content, a larger share of the allocated budget went towards acquisitions; conversely, when organic invest- ments dominated, they received greater priority. This effect proved to be robust, persisting even when statisti- cal analysis controlled for individual factors such as age, strategy experience, or intensity of LinkedIn use. The effect was particularly pronounced among top man- agers: within this group, budget allocation shifted by an average of $18.5 million towards the strategy dominant in their feed. However, another finding came as a surprise: neither the author’s hierarchical position nor the number of likes and comments had a direct impact on participants’ strategic preferences. In our experiment, posts by CEOs were no more influential than those by lower-level employees, and highly popular posts with numerous likes and comments fared no better than less popular ones. However, an inter- esting exception emerged from an unusual combination: posts by lower-ranking individuals that gathered high num- bers of likes and comments had a particularly strong influ- ence on strategic preferences for acquisitions or organic growth options. Apparently, it is precisely this counterintui- tive combination that catches special attention. Furthermore, we uncovered another noteworthy effect: Even brief exposure to LinkedIn posts prompted par- ticipants to evaluate their own company’s situation more negatively. Observing the activities and achievements of other firms draws attention to potential deficits within one’s own organisation and triggers social comparisons. We therefore examined whether this reduced satisfaction influenced participants’ preferences for specific strategic options. However, this could not be confirmed. Neverthe- less, such dissatisfaction might still motivate executives to consider new strategic initiatives, such as acquisitions, to close perceived gaps relative to competitors. 4. Why is that so and what are key implications of our findings? Why do M&A LinkedIn posts have this effect, and what conclusions can and should we draw from this (see over- view in Figure 2)? What is driving these effects? To further unpack the exper- imental results, we conducted 18 interviews with execu- tives. These conversations revealed that three aspects are of central importance: the high availability of LinkedIn, the salience of the posts, and the expansion of our attentional boundaries. Unlike other media, such as traditional news- papers or even online news outlets, information on social networks like LinkedIn is even more readily available and updated at a faster rate. This constant availability makes M&A REVIEW UK 2/2026 • Volume 1 6767

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REPORT • RESEARCH & INSIGHTS Fig. 2 Background and implications of findings Source: based on Brielmaier et al. (2025) Mechanism What managers said What can we do? Availability • Across devices • Frequent updates “Basically, whether I’m sitting on the train, on the bus, or just have two or three minutes without having something specific to do [...] you naturally end up scrolling through the [LinkedIn] feed [...] also before a meeting.” Social Media Cooling-Off Deliberate avoidance of social media use before strategic decisions Salience • Status and hierarchy are evaluated • Attribution of competence Extension of attention • Implicit use of information • Extension of legiti- mate information “somehow, I already know the people who post, the ones whose content I see. I generally do attribute competence to them, I would say. I’m not sure that I consciously look at it [hierarchical rank] that way. [...] Of course, you see some peo- ple more often than others. And from that, a kind of profile probably emerges—like that person is the one with the higher title. But I don’t think that really influences me so much. I would say it’s more about how present they are.” Social Media Monitor Analysis of acquisition activity and signals in social media “And on [LinkedIn], you of course see industry peers and competitors, and I like to or often take a look at what they’re doing [...] simply to do a bit of copy-paste as well.” Strategic Anchor Deliberate use of corpo- rate strategy as attention anchor it possible to consume relevant information right before entering a meeting. Another key factor is the personal rel- evance of LinkedIn posts. These posts carry weight for us because they are shared by personal contacts whose sta- tus, hierarchy, and competence are known to us and we implicitly evaluate these aspects alongside the message itself. Finally, LinkedIn expands our attentional boundaries. The combination of high availability and salience causes this social media information to compete directly with other, more formal (and likely more reliable) information in strategic decision-making scenarios. What can we do? Both the experimental findings and the executive interviews point in the same direction, making the potential adverse effects on M&A transactions clear. This brings us to the crucial question: how should compa- nies address this issue? We neither can nor likely want to forgo the undeniably positive aspects of LinkedIn and other social networks. One solution is to adopt (and potentially enforce) a more reflective approach to social media dur- ing decision-making processes. This would require clear rules. What might such a policy look like? To restrict the immediate availability of social media during key decision- making windows, companies could establish a ’cooling-off’ period. Executive teams could commit to a self-imposed ban on consuming social media content during the three hours leading up to major strategic meetings. At the same time, this commitment could include systematically moni- toring network contacts relevant to potential acquisitions. Who in my network is currently posting about transactions? Making this information transparent, along with structured collection and analysis, could allow firms to leverage the effects of social media strategically rather than reacting to them passively. Finally, how do we address the expansion 6868 M&A REVIEW UK 2/2026 • Volume 1 of our attentional boundaries? Ultimately, the company’s overarching strategy must serve as the primary anchor for executive attention. Strategy remains the ultimate reality check for determining whether acquisitions genuinely con- tribute to long-term goals or whether the organisation is simply suffering from M&A FOMO. Dr Christoph Brielmaier is Assistant Professor at the Chair for Strategy & Organization Studies at Otto-Friedrich-University Bamberg. His research focuses on managerial attention as a central and increasingly scarce resource as well as sources and implications of transparency in strategy making. Dr Moritz Reis is Postdoc at the Institute of Psychology at Julius- Maximilians-University Würzburg. In his research he investigates how digitalisation affects human behaviour and how people interact with new technologies, such as AI. Prof. Dr Martin Friesl is Professor of Strategy & Organisation Studies at Otto-Friedrich-University Bamberg, as well as (Adjunct) Professor at NHH Norwegian School of Economics. His research focuses on the social dynamics underpinning strategic transformation as well as M&A. Prof. Dr Roland Pfister ist Professor of Experimental Psychology at Trier University. He investigates how rules affect human behaviour, sense of control and the processing and coping with errors.

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REPORT • TECHNOLOGY & AI Reinventing M&A: How AI Reshapes the M&A Lifecycle Today and Tomorrow Michael Klawon, University of St. Gallen (M.B.L.-HSG), Frankfurt Business School (LL.M.), smartmerger.com AG; Dr Alexander Herzfeldt, Dr Sebastian Floerecke & Prof. Dr Christoph Ertl, Munich University of Applied Sciences, HM Business School 1. AI in M&A: Context and Motivation Although the mergers and acquisitions (M&A) process is structurally straightforward, successful transactions depend on complex assessments, strategic foresight and informed decision-making.1 This explains why investment bankers, consultants, and advisers have commanded sub- stantial fees for decades in helping organisations structure, execute, and realise value from M&A transactions.2 Across the M&A lifecycle, from strategy and transaction to integration, numerous activities are amenable to auto- mation.3 Yet, despite ongoing digitalisation efforts, M&A 1 Böhm, M./Floerecke, S./Herzfeldt, A./Knoblich, D. (2023): Success factors in efficient mergers & acquisitions activities: A longitudinal case study from a serial acquirer and divestor, AIS Transactions on Enterprise Systems, 6(2), pp. 1–23. 2 Beckmann, C./Ganzen, K./Geiger, C./Kuegler, M./Mickerts, W./Schultes, P. (2019): M&A im Lichte der Digitalisierung: Bestandsaufnahme und Blick in die Zukunft, M&A REVIEW, 30(12), pp. 398–404. 3 Lederer, M./Jakob, E./Rathnow, P. (2022): State-of-the-art and possible fields of application for the integrated support of M&A processes by artificial intelligence, International Journal of Data Science, 7(1), pp. 22–43; Fischer, M./ Herzfeldt, A./Floerecke, S./Ertl, C./Beyer, H. M./Klawon, M. (2023): Digitalisie- rung bei Corporate Mergers & Acquisitions: Entwicklung eines Reifegradmo- dells, Controlling – Zeitschrift für erfolgsorientierte Unternehmenssteuerung, 35(3), pp. 39–47. remains largely human-driven: automation tends to occur within support functions, while critical decisions continue to be prepared and made by humans.4 Artificial intelli- gence (AI) is fundamentally altering this paradigm. Unlike traditional automation technologies, AI can process vast amounts of structured and unstructured data, identify patterns and sentiment, integrate external market intelli- gence, and generate insights at a scale and speed beyond human capabilities. As a result, AI has the potential not only to improve operational efficiency but also to enhance decision quality throughout the M&A process.5 Although numerous publications address the role of AI in M&A, the body of knowledge remains fragmented, making it difficult for practitioners to derive consolidated 4 Adler, T./Herzfeldt, A./Floerecke, S./Klawon, M. (2023): Mergers-and-Acqui- sitions (M&A)-Beratung 4.0: Digitalisierung des Unternehmensverkaufsprozes- ses im deutschen Mittelstand aus der M&A-Berater-Perspektive, Wirtschafts- informatik & Management, 15(5), pp. 332–340; Coombs, C. R./Chopra, R. (2019): Artificial intelligence and data analytics: Emerging opportunities and challenges in financial services, Journal of Financial Transformation, 50, pp. 54–59. 5 Parikh, A./Poojary, S./Gupta, A. (2023): Optimizing M&A outcomes: Harnes- sing the power of big data analytics and natural language processing, SSRN Working Paper. M&A REVIEW UK 2/2026 • Volume 1 6969

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REPORT • TECHNOLOGY & AI Fig. 1 Generalised M&A Lifecycle Source: own illustration Phase Objective Sub-Phases 1. Strategy Define the strategic rationale, identify targets and prioritise M&A paths Strategic situation analysis; deal sourcing; strategic evaluation and risk assessment 2. Transaction Verify the target, assess risks and agree on contract and price Due diligence management; financial, legal, commercial and additional due diligences; negotiation 3. Integration Realise the intended value and align organisations, people and culture Integration planning and roadmap; Integration Manage- ment Office (IMO); synergy realisation; HR and culture integration; post-completion due diligence insights for strategic and operational decision-making.6 This article addresses that gap through a structured litera- ture review. It synthesises academic and practitioner per- spectives on AI applications across all phases of the M&A process, develops an integrated framework of AI value- creation mechanisms, and identifies those areas in which human judgement remains indispensable despite increas- ing technological capabilities. prets and synthesises it, and ultimately transforms it into actionable intelligence.8 These activities closely mirror the core tasks performed by internal deal teams and exter- nal advisers throughout M&A transactions.9 Consequently, M&A represents a particularly suitable domain for AI adoption, as many activities are information-intensive, analytical in nature, and dependent on the efficient pro- cessing of large volumes of data. 2. The M&A Lifecycle and AI 3. Research Design Most practitioners describe the M&A process as a sequence of stages, beginning with target assessment and progressing through financial, legal and operational due diligence, negotiation, closing, and post-merger inte- gration.7 Building on that, this article adopts a generalised three-phase model consisting of Strategy, Transaction and Integration (Figure 1), synthesising the literature and prac- tical field experience with a buy-side focus. The strategy phase defines the rationale for inorganic growth and identi- fies the most promising acquisition targets. The transaction phase verifies the chosen target through due diligence and converts the findings into deal terms, contractual arrange- ments, and valuation. The integration phase focuses on realising the intended value of the acquisition by aligning organisations, processes, and people after closing. This life- cycle provides the analytical framework for the remainder of the article. Each phase and sub-phase is examined to determine where AI is already creating measurable value, where its applications remain limited, and where human judgement continues to be indispensable. Among the many definitions of AI, the interpretation pro- posed by Grewal aligns particularly well with the require- ments of the M&A lifecycle: AI is defined as a mechanical system that acquires information and knowledge, inter- 6 Siegal, B./Houston, B. (2024): Generative AI in M&A: Where hope meets hype, Bain & Company. 7 PricewaterhouseCoopers (2025): Mergers & acquisitions: The 5 stages of an M&A transaction, PwC Malta. Given the nascent state of academic research on AI in M&A, this study adopts a multi-source review approach that integrates both scholarly and practitioner evidence. While academic publications provide conceptual and empirical insights, many recent developments in AI- enabled M&A practices are documented primarily in industry reports, consulting studies, legal analyses, and software vendor publications. Consequently, a compre- hensive understanding of the topic requires the inclusion of both academic and practitioner-oriented sources.10 Between 2024 and spring 2026, Scopus, Web of Science, IEEE Xplore, and the AIS eLibrary were searched with keyword combinations of AI and M&A terms. The same combinations were employed in targeted web searches to identify consulting reports, white papers, case studies and thought-leadership publications from banks, advis- ers and law firms, and other industry participants. In addition, the websites of leading M&A software provid- ers were systematically reviewed to capture emerging AI-enabled tools and applications. Sources were included if they explicitly addressed the use of AI in at least one phase of the M&A lifecycle. This process resulted in a core corpus of 29 academic studies, supplemented by a broad set of practitioner and vendor sources. All identi- 8 Grewal, D. S. (2014): Defining artificial intelligence: A critical conceptual analysis, IOSR Journal of Computer Engineering, 16(2), pp. 9–13, here p. 13. 9 Lederer et al. (2022). 10 Templier, M./Paré, G. (2015): A framework for guiding and evaluating lite- rature reviews, Communications of the Association for Information Systems, 37(6), pp. 112–137. 7070 M&A REVIEW UK 2/2026 • Volume 1

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fied materials were systematically coded according to the respective M&A lifecycle phase, the underlying AI technology or technique, and the reported organisational outcomes and value mechanisms. 4. Results: How AI Reshapes M&A along the Lifecycle 4.1 Strategy Phase AI is already transforming the strategy phase by enhanc- ing strategic analysis and streamlining deal sourcing. In the strategic situation analysis, tools with text mining and machine learning capabilities efficiently process large volumes of macro- and microeconomic data and enrich analytical frameworks such as PESTEL and SWOT. As a result, decision-makers can shift their focus from data col- lection to interpretation and strategic judgement, improv- ing the foundation for inorganic growth strategies.11 In deal sourcing, AI can identify potential acquisition targets by analysing public databases as well as unstructured infor- mation such as company websites. In addition, AI can uncover opportunities from data sources not traditionally associated with M&A, expanding the target universe and increasing the likelihood of identifying attractive acquisi- tion candidates.12 Looking ahead, the role of AI is expected to extend beyond data aggregation and screening towards predictive and recommendation-driven capabilities. Emerging platforms not only automate the generation of target lists but also assess strategic fit, monitor market developments, and continuously evaluate acquisition opportunities against predefined investment criteria.13 Some scholars envision intelligent matching platforms that connect buyers and sellers based on strategic preferences, transaction objec- tives, and market conditions, fundamentally reshaping the deal origination process.14 Further capabilities on the hori- zon include automated target profiling and the forecast- ing of post-transaction KPIs through executive-oriented decision-support systems.15 Despite these advances, the strategy phase remains inherently dependent on human judgement. M&A success is influenced not only by quantifiable factors but also by intangible dimensions such as trust, leadership, organisa- tional culture, and stakeholder relationships. These factors are difficult to capture algorithmically and are often fur- ther marginalised by transaction-related time pressures.16 By reducing the burden of data collection and analysis, 11 Lederer et al. (2022). 12 Parikh et al. (2023); Siegal/Houston (2024). 13 Lederer et al. (2022). 14 Parikh et al. (2023). 15 Beckmann et al. (2019); Tobin, R. (2024): How AI could soon supercharge winning M&A growth strategies, Forbes, 22 January 2024. 16 Walter, G./Schweig, D./Rathnow, P. (2021): Erfolgsfaktor Mensch bei M&As: Eigentlich sollten wir es besser wissen, PERSONALquarterly, 73(4), pp. 39–45. REPORT • TECHNOLOGY & AI however, AI enables executives to spend more time on precisely these human and strategic considerations. Consequently, AI should be viewed as an augmenta- tion rather than a replacement of managerial decision- making. While it can efficiently generate target shortlists, identify patterns, and provide analytical support, final strategic decisions require contextual understanding, experience, and judgement. Some experts further ques- tion whether AI can reliably assess a firm’s strategic situa- tion at the high level of abstraction required for corporate strategy, given its dependence on historical training data and quantifiable inputs.17 4.2 Transaction Phase The transaction phase is currently the area of M&A where AI delivers the most tangible and immediate benefits. Many transaction activities are data-intensive, document-heavy, and highly standardised, making them particularly suitable for AI-supported automation. Tasks such as contract review, valuation analysis, code scan- ning and large-scale data processing have traditionally required substantial manual effort and remain suscep- tible to human error. Generative AI significantly acceler- ates these activities, allowing transaction professionals to focus on higher-value analytical and advisory work.18 This development has been enabled by the transition from physical to virtual data rooms. Modern platforms such as Realtime Due Diligence illustrate this evolution by combin- ing centralised data management, standardised review processes, and increasingly AI-enabled analytical capa- bilities.19 Financial due diligence particularly benefits from AI’s ability to process large datasets and extract insights from unstructured information stored in virtual data rooms.20 Within valuation, AI detects anomalies, flags underper- forming assets and strengthens time-series analysis.21 Legal due diligence represents another high-impact application area. Given its document-intensive and largely standardised nature, legal review is especially well suited to large language models. Traditionally, initial document reviews are often conducted by junior lawyers under considerable time pressure, increasing the risk of 17 Lederer et al. (2022). 18 Parikh et al. (2023); Rien, A. (2019): The art of AI: The impact of artificial intelligence on the merger and acquisition strategy, Doctoral dissertation, Universidade Católica Portuguesa; Kostas, S. R. (2022): The past, present & future of M&A – Assessing how the lean process and artificial intelligence can remedy the pitfalls of traditional M&A, Transactions: Tennessee Journal of Business Law, 24, p. 115. 19 Lederer et al. (2022); Lucks, K./Klawon, M. (2017): Realtime due diligence, in: Lucks, K. (ed.), Praxishandbuch Industrie 4.0, Schäffer-Poeschel, pp. 761–770. 20 Lederer et al. (2022); Rien (2019). 21 Kostas (2022). M&A REVIEW UK 2/2026 • Volume 1 7171

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REPORT • TECHNOLOGY & AI omissions and inconsistencies.22 AI-powered legal tech solutions address these challenges by accelerating docu- ment discovery, extracting legally relevant information, identifying disclosure risks, and improving review con- sistency.23 As these capabilities mature, AI is expected to assume an increasing share of routine legal work while enabling legal professionals to concentrate on strategic and interpretive tasks. In commercial due diligence, AI-based research engines aggregate information from multiple sources to cre- ate company profiles, identify market signals, and flag regulatory or reputational risks.24 In software due dili- gence, specialised tools analyse source code to assess software quality, licensing compliance, technical debt, and cybersecurity vulnerabilities.25 AI also contributes indirectly to negotiations by accelerating analysis and improving valuation accuracy, thereby enabling deal teams to respond more effectively to changing negotia- tion dynamics. More directly, AI can benchmark contract clauses against market standards and identify potential gaps or deviations.26 Looking forward, AI is expected to move beyond task automation towards continuous and increasingly intel- ligent due diligence. Future systems may enable real- time risk assessments, dynamically update findings as new information becomes available, and refine recom- mendations through learning from historical transaction data.27 Forecasts suggest that AI could eventually take over up to 96% of due diligence tasks (62% partially and 34% fully).28 Growing confidence in the cost and efficiency benefits of AI is already accelerating adoption despite earlier concerns regarding data privacy and confiden- tiality.29 Nevertheless, the transaction phase remains far from fully automatable. Many activities require contextual rea- soning, negotiation skills, and the ability to balance com- peting stakeholder interests. Negotiations, in particular, depend on judgement, persuasion, relationship manage- ment, and strategic trade-offs that AI cannot replicate.30 Likewise, legal and financial professionals continue to play a critical role in interpreting findings, assessing impli- cations, and translating analytical outputs into transac- tion decisions. 22 Kostas (2022); Rien (2019). 23 Nikolaidis, S. (2018): Die Zukunft von Artificial Intelligence bei M&A-Trans- aktionen, Bachelor’s thesis, ZHAW. 24 Tobin (2024). 25 Lappi, J. (2023): Investigation made easy? How AI influences the due dili- gence process of mergers and acquisitions, Master’s thesis, Aalto University. 26 Kostas (2022); Beckmann et al. (2019). 27 Coombs/Chopra (2019); Kostas (2022); Parikh et al. (2023). 28 Rien (2019). 29 Lappi (2023); Siegal/Houston (2024). 30 Beckmann et al. (2019); Lederer et al. (2022); Nikolaidis (2018). 7272 M&A REVIEW UK 2/2026 • Volume 1 Practical limitations further constrain adoption. Smaller target companies often lack structured and digitally accessible data, confidentiality requirements may restrict the use of external AI systems, and regulatory frame- works such as the EU AI Act impose additional compli- ance obligations.31 Moreover, while AI can effectively iden- tify patterns and anomalies, it frequently lacks the causal understanding required to explain findings or assess their strategic significance. As a result, AI currently functions as a powerful decision-support tool rather than an autono- mous decision-maker, augmenting rather than replacing human expertise throughout the transaction process.32 4.3 Integration Phase increasingly supports post-merger AI integration by enhancing planning, coordination, and performance monitoring. During integration planning, AI contributes to the development of integration roadmaps by identify- ing required tasks, detecting process redundancies, pin- pointing potential cultural friction points, and uncovering optimisation potential. Generative AI further accelerates reporting by drafting status updates, summarising project developments, and visualising key performance indica- tors for management teams.33 The Integration Manage- ment Office (IMO) also benefits from AI-enabled tools that streamline communication, automate reporting, and monitor milestones across workstreams. By combining real-time project data with insights from historical trans- actions, these systems help integration leaders identify emerging risks, anticipate bottlenecks, and adapt integra- tion measures more proactively.34 AI also contributes to synergy realisation, one of the pri- mary determinants of transaction success. By analys- ing operational, organisational, and financial data, AI can identify overlapping functions, recommend best practices, and highlight efficiency improvements that may have been overlooked during due diligence. As these systems increas- ingly learn from prior transactions, their ability to predict post-merger outcomes and recommend value-creation initiatives is expected to improve further. In HR and culture integration, AI supports workforce planning by forecasting talent requirements, identifying skill gaps, and informing retention, recruitment, and upskilling strategies. AI-powered chatbots and digital assistants can additionally facilitate communication across merging organisations by providing employees with a centralised point of access for informa- tion and support throughout the integration process.35 31 Lederer et al. (2022); Lappi (2023). 32 Nikolaidis (2018). 33 Coombs/Chopra (2019); Parikh et al. (2023); Kostas (2022). 34 Tobin (2024); Beckmann et al. (2019). 35 Beckmann et al. (2019); Coombs/Chopra (2019); Tobin (2024); Sayed, Z. (2023): The role of AI on M&A: An HR perspective for successful integration, HR Forecast.

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REPORT • TECHNOLOGY & AI Fig. 2 AI Value Mechanisms across the M&A Lifecycle Source: own illustration M&A Phase Value Mechanism Typical AI Techniques Use Cases 1. Strategy Information enrichment; prediction and simulation NLP/text mining; recommen- der systems; LLMs Market scanning, target screening, strategic fit analysis 2. Transaction All four mechanisms ML anomaly detection; contract analytics; LLM- based summarisation Financial/legal/commercial due diligence, contract review, negotiation support 3. Integration Automation and coordination; information enrichment; human-AI reconfiguration BI/analytics with AI features; LLM-based reporting; predictive HR analytics Integration governance, synergy tracking, HR & culture analytics Post-completion due diligence represents another area of application. Once full access to the target’s data becomes available, AI can reassess financial and opera- tional assumptions, validate deal hypotheses, and iden- tify deviations from pre-acquisition expectations. These insights help management refine integration priorities and improve value-capture efforts. Despite these benefits, the literature suggests that AI’s contribution in the integration phase is inherently more lim- ited than in the transaction phase.36 While integration gen- erates substantial amounts of data, its success ultimately depends on leadership, communication, trust, and cultural alignment. These factors remain difficult to quantify and cannot be effectively managed through analytical tools alone. Consequently, AI serves primarily as an enabler of coordination, transparency, and decision support, while responsibility for guiding organisational change and build- ing a shared post-merger culture continues to rest with managers and employees. 4.4 Cross-Phase Framework: AI Value Mechanisms Across the M&A lifecycle, AI creates value through four recurring mechanisms that transcend individual phases and use cases (Figure 2). First, information enrichment expands and improves the decision base by process- ing large volumes of structured and unstructured data. Second, automation and coordination reduce manual effort, standardise workflows, and improve collaboration across multiple stakeholders. Third, prediction and simu- lation support decision-making by forecasting outcomes, identifying risks, and assessing alternative scenarios. Finally, human-AI reconfiguration describes the gradual shift from AI as a purely supportive tool towards a semi- 36 Lederer et al. (2022). autonomous contributor that increasingly performs ana- lytical tasks independently, while humans retain respon- sibility for strategic decisions, legal accountability, and relationship management. The relative importance of these mechanisms varies across the M&A lifecycle. In the strategy phase, AI pri- marily creates value through information enrichment and predictive capabilities that support market analysis, target identification, and strategic fit assessment. In the transaction phase, all four mechanisms are prominent, reflecting the data-intensive nature of due diligence and deal execution. During integration, AI focuses on coor- dination, monitoring, and organisational support, while human judgement remains critical for cultural alignment, leadership, and stakeholder management. Overall, AI creates value in M&A by augmenting rather than replacing human decision-makers. It strengthens information processing, analytical depth, and workflow efficiency, while strategic judgement, negotiation, lead- ership, and cultural integration remain firmly human domains. This balance explains both the rapid adoption of AI and the enduring importance of human expertise throughout the deal lifecycle. 5. Discussion AI’s impact on M&A is most visible in data-intensive activities, particularly within due diligence and integra- tion governance, where large volumes of information must be processed, analysed, and coordinated effi- ciently. However, four structural limitations currently con- strain its effectiveness across the lifecycle. First, most AI solutions remain siloed. As a result, outputs often need to be transferred manually between virtual data rooms, communication platforms, and workflow systems, limit- ing the realisation of fully integrated, AI-enabled deal M&A REVIEW UK 2/2026 • Volume 1 7373

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REPORT • TECHNOLOGY & AI processes. Second, AI lacks legal and organisational agency: while it can generate analyses, recommenda- tions, and draft documents, it cannot assume account- ability for their consequences. Human review therefore remains indispensable, particularly in high-stakes deci- sions with legal, financial, or strategic implications. Third, the reliability of generative AI remains a critical concern. Hallucinations and factual inaccuracies may be tolerable in low-risk contexts but are problematic in M&A, where errors can translate directly into financial losses, contrac- tual disputes, or regulatory exposure. Approaches such as retrieval-augmented generation (RAG), grounded in curated domain-specific knowledge, can mitigate these risks but require robust data governance and quality assurance mechanisms. Fourth, regulatory and confiden- tiality requirements constrain the use of externally hosted AI systems. Sensitive transaction data is often subject to strict confidentiality obligations, while regulatory frame- works such as the EU AI Act further increase compliance requirements. Although on-premise and private-cloud deployments address many of these concerns, they also raise implementation costs and adoption barriers, par- ticularly for smaller firms. Beyond these limitations, the literature points to agentic AI as the next step of development: unlike today’s pre- dominantly task-oriented systems, agentic architectures can decompose objectives into sub-tasks, orchestrate multi-step workflows, and interact directly with enter- prise systems. In the M&A context, such capabilities could enable AI to prepare analyses, execute due diligence routines, coordinate integration activities, and support decision processes with substantially less user interven- tion. Yet greater autonomy does not diminish the need for human oversight. On the contrary, as AI systems assume increasingly complex analytical and coordination tasks, questions of governance, accountability, transpar- ency, and risk management become more important. The emerging trajectory therefore points not towards autonomous dealmaking, but towards hybrid human-AI operating models. In these configurations, AI increasingly augments information processing, analysis, and execu- tion, while humans retain responsibility for judgement, relationship management, ethical considerations, and final decision-making. 6. Conclusion AI delivers the greatest value in the data-intensive phases of the M&A lifecycle, particularly in target screening, due diligence, and integration governance. While these activi- ties can increasingly be augmented through advanced analytics and automation, strategic decision-making, negotiation, and the integration of people and cultures remain fundamentally human endeavours. The future of AI in M&A therefore lies not in replacing human judge- 7474 M&A REVIEW UK 2/2026 • Volume 1 ment but in complementing it. As agentic AI systems evolve, organisations that combine technological inno- vation with strong governance and human oversight will be best positioned to realise sustainable value creation across the M&A lifecycle. Michael Klawon is founder and CEO of smartmerger.com, an AI- native operating system for secure, end-to-end M&A execution, and brings extensive M&A expe- rience as an adviser and in senior M&A roles. Dr Alexander Herzfeldt is a management consultant/adviser and teaches at Munich University of Applied Sciences (HM Business School). Dr Sebastian Floerecke is an Enterprise Architect at Munich Airport. In ad- dition, he serves as a lecturer at Munich University of Applied Sciences (HM Business School). Prof. Dr Christoph Ertl is Professor of Business Information Systems at HM Business School, Munich University of Applied Sciences, and previously led commercial cont- rolling for the technical division at Munich Airport (2015–2022).

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REPORT • SECTOR FOCUS Arming Europe Cross-Border M&A and the Making of a Continental Defence Industry Dr Max Alles & Dr Nicole Englisch, Clifford Chance 1. A Continent Rearms Europe’s defence industry is undergoing the most conse- quential restructuring since the end of the Cold War. Russia’s war against Ukraine, the deteriorating security situation in the Middle East, and a US administration openly question- ing the durability of its security guarantees to Europe have combined to produce a demand surge for defence output that few observers would have predicted even a few years ago. For lawyers advising on cross-border transactions, the practical consequence is unmistakable: defence and security has moved from a niche, heavily regulated corner of the M&A market to one of its most active fields, drawing private equity houses, sovereign wealth funds and indus- trial conglomerates that would once have avoided the sector altogether. The headline commitment came at the NATO summit in The Hague in June 2025, where all 32 allies (with a carve- out negotiated by Spain) agreed to raise defence and security-related spending to 5% of GDP by 2035 – 3.5% on core defence requirements and 1.5% on broader security- related investments such as infrastructure, cyber resil- ience and industrial capacity.1 This represents more than a doubling of the 2% benchmark that had governed allied burden-sharing since 2014, and reflects both a genuine reassessment of the Russian threat and sustained pres- sure from the Trump administration for European and Canadian allies to fund a much larger share of their own defence. The European Union has responded with initiatives that go well beyond declaratory politics. The Commission’s White Paper for European Defence – Readiness 2030, published in March 2025, and the subsequent Defence Readiness Omnibus of June 2025, sketch out an ambitious defence- industrial policy: pooled procurement, faster and cheaper access to funding, and a deliberate loosening of state aid and competition constraints historically viewed as obsta- cles to consolidation. The centrepiece financing instru- ment, Security Action for Europe (SAFE), came into force on 29 May 2025 and allows the European Commission to 1 NATO, The Hague Summit Declaration, 25 June 2025, para. 3, available at: https://www.nato.int/cps/en/natohq/official_texts_236705.htm; Bundesregie- rung, NATO-Gipfel in Den Haag 2025, 24 June 2025, available at: https://www. bundesregierung.de/breg-de/aktuelles/nato-gipfel-den-haag-2025-2355974. 7676 M&A REVIEW UK 2/2026 • Volume 1

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borrow up to €150 billion on capital markets and on-lend it to participating member states for joint defence procure- ment, provided at least 65% of the value of funded compo- nents originates in the EU, EFTA or Ukraine.2 This is not merely a story about Brussels and Berlin. It is, increasingly, a European story with a distinctly transatlan- tic and cross-Channel dimension, and one in which London occupies an unusually delicate position, simultaneously indispensable to European defence-industrial capacity and formally outside the club now directing the largest wave of European defence spending in a generation. This article examines the structural features of the sector, the evolving European regulatory architecture, and the specific position of the United Kingdom and other non- EU allies, before setting out practical guidance for parties structuring cross-border defence transactions. 2. A Fragmented Industry Meets an Unprecedented Order Book Europe’s defence-industrial base remains strikingly frag- mented relative to the scale of demand which it is now fac- ing. Twenty-seven national procurement authorities, each with its own doctrine, budget cycle and industrial policy preferences, have produced a landscape in which the EU operates around 150 distinct major weapon systems, compared with roughly a sixth of that number in the United States.3 That fragmentation shows up starkly in the league tables: of the world’s fifteen largest arms-producing com- panies by 2024 revenue, only four are European. BAE Sys- tems of the United Kingdom is the highest-placed European company, in fourth position globally, with Leonardo of Italy the next European entrant ranking twelfth. Rheinmetall, the largest German producer, ranked twentieth worldwide in 2024 despite arms revenue growth of roughly 47% year- on-year to around $8.2 billion, a striking rate that nonethe- less leaves it far smaller than the three leading US primes, Lockheed Martin, RTX and Northrop Grumman.4 The consequence of this fragmentation is chronic under- realisation of scale economies: duplicated development programmes, shorter production runs, and a structural cost disadvantage relative to US and increasingly Chinese competitors. It is precisely this diagnosis that underlies the European Commission and High Representative of the Union for Foreign 2 Affairs and Security Policy, Joint White Paper for European Defence – Rea- diness 2030, 19 March 2025, JOIN(2025) 120 final; Regulation (EU) 2025/1106 establishing the Security Action for Europe (SAFE) instrument, OJ L, 2025/1106; Council of the EU, Press release, SAFE: Council adopts EUR 150 billion boost for joint procurement on European Security and defence, 27 May 2025. 3 Tagesschau, Europäische Rüstungspolitik. Klein-Klein statt Feuerkraft, avai- lable at: https://www.tagesschau.de/ausland/eu-ruestungspolitik-100.html. 4 Stockholm International Peace Research Institute (SIPRI), The SIPRI Top 100 Arms-Producing and Military Services Companies, 2024, 1 December 2025, available at: https://www.sipri.org/visualizations/2025/sipri-top-100- arms-producing-and-military-services-companies-world-2024; combined 2024 arms revenues of Lockheed Martin (USD 64.65bn), RTX (USD 43.60bn) and Northrop Grumman (USD 37.85bn) per the same source. REPORT • SECTOR FOCUS current wave of consolidation. Since 2025, M&A dealmak- ing has accelerated sharply. Rheinmetall completed its acquisition of Naval Vessels Lürssen on 1 March 2026, cre- ating what the company describes as a cross-domain sys- tem house spanning land, sea, air and space;5 Leonardo completed its acquisition of Iveco Group’s defence vehicles business on 18 March 2026, closing a long-standing capa- bility gap in armoured platforms;6 and the Franco-German group KNDS absorbed Texelis Defense and increased its stake in the German gearbox manufacturer RENK Group. Discussions about a possible satellite-sector combina- tion involving Leonardo, Airbus and Thales, dubbed Pro- ject Bromo, illustrate both the ambition and the political sensitivity of the consolidation now under way. European defence M&A deal value rose to $8.7 billion across 134 transactions in 2025, a 320% increase year-on-year,7 and global defence M&A deal volume climbed a further 56% in the first half of 2026, even as aggregate values held broadly stable, reflecting a market now characterised by high transaction frequency rather than a handful of very large deals.8 A further structural feature deserves emphasis: at the level of prime contractors and lead system integrators, the state is in many cases the only customer. Order backlogs and the durability of framework agreements, rather than conventional trading multiples, tend to drive valuation. Buyers must therefore scrutinise the quality and renewal probability of government contracts with particular care, alongside the transferability of the web of manufacturing licences, export authorisations and security accreditations without which a defence business cannot operate. 3. The United Kingdom: Indispensable Partner, Uncertain Insider No jurisdiction illustrates the tension between European defence integration and continued national sovereignty more clearly than the United Kingdom. British industry remains one of Europe’s genuine defence-industrial pow- erhouses – BAE Systems alone outranks every other Euro- pean producer – and UK-headquartered companies are 5 Rheinmetall AG, press release, Rheinmetall takes over NVL – Closing completed, 2 March 2026. 6 Leonardo, press release, Leonardo completes the acquisition of Iveco Group’s defence business, 18 March 2026. 7 Airforce Technology, Aerospace and defense M&A activity: strategic positioning amid robust growth, 27 April 2026, available at: https://www. verdict.co.uk/aerospace-and-defense-ma-activity-strategic-positioning- amid-robust-growth/. 8 DPRTE, Global Defence M&A Hits Record High, 16 July 2026 (available at: https://www.dprte.co.uk/2026/07/16/global-defence-ma-hits-record-high/) and European Security & Defence, Global defence M&A reaches half-year record as investors race to secure next-generation technologies, 15 July 2026 (available at: https://euro-sd.com/2026/07/news/exclusive-news/52343/ global-defence-ma-reaches-half-year-record-as-investors-race-to-secu- re-next-generation-technologies/) (global defence M&A: 42 transactions in H1 2026, up from 27 in H1 2025, aggregate value broadly stable at approx. GBP 2.7bn versus GBP 2.8bn in H1 2025); cf. also CMS, European M&A Outlook 2026, Fortress Europe – defence sector M&A; Bain & Company, M&A in De- fense: Why All Eyes Are on Europe, 2026 M&A Report; A&O Shearman, Rising geopolitical tensions ignite European defense M&A, 2025. M&A REVIEW UK 2/2026 • Volume 1 7777

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REPORT • SECTOR FOCUS deeply embedded in continental supply chains. Yet the UK sits outside the EU’s institutional architecture, and its exact place within the EU’s new financing and procurement structures is still being negotiated. Alongside its EU-facing efforts, the UK has also pursued closer bilateral defence- industrial cooperation with France: at the 37th Franco-Brit- ish summit in London on 10 July 2025, President Macron and Prime Minister Starmer signed the “Lancaster House 2.0” declaration, modernising the 2010 Lancaster House Trea- ties and establishing an “Entente Industrielle” intended to deepen joint development of complex weapons systems, including a successor to the Storm Shadow/SCALP cruise missile, alongside expanded cooperation in space, cyber and nuclear deterrence. This bilateral track, sitting outside the EU framework altogether, offers UK and French defence companies an additional avenue for industrial cooperation regardless of the outcome of the UK’s negotiations with Brussels.9 At the UK-EU summit of 19 May 2025, the two sides signed a Security and Defence Partnership committing to explore swiftly the possibilities for UK participation in SAFE. From the outset, SAFE’s design allowed third countries with a Security and Defence Partnership to participate in joint procurements,10 and the Commission indicated it hoped a UK arrangement could be concluded within weeks. That optimism proved premature. Negotiations broke down in November 2025 over the scale of the financial contribution the EU expected London to pay for access, with report- ing suggesting the EU sought a contribution in the billions of euros against a UK offer in the low hundreds of millions; France, protective of its own industrial base, was notably resistant to generous UK terms. As matters stand, the UK has not concluded a bespoke SAFE association agreement, though UK defence companies continue to have access to SAFE-funded procurements under the generic third-country terms available to any non-EU, non-EEA supplier, which cap non-EU content at 35% of a project’s value absent a spe- cific bilateral agreement. By contrast, Canada, which has no land border with the EU and a materially different industrial relationship with Brussels, concluded its own SAFE associa- tion agreement in December 2025, becoming the first non- European country admitted to the scheme11 – a comparison that has not gone unnoticed in London or Brussels. 9 UK Government, press release, Lancaster House 2.0: Declaration on Modernising UK-French Defence and Security Cooperation, 10 July 2025, avai- lable at: https://www.gov.uk/government/news/lancaster-house-20-decla- ration-on-modernising-uk-french-defence-and-security-cooperation; Élysée, Lancaster House 2.0: Déclaration sur la modernisation de la coopération de défense et de sécurité entre la France et le Royaume-Uni, 14 July 2025. 10 UK Government and European Union, UK-EU Security and Defence Part- nership, 19 May 2025, available at: https://www.gov.uk/government/publi- cations/uk-eu-security-and-defence-partnership; UK in a Changing Europe, Explainer: Security Action for Europe (SAFE), available at: https://ukandeu. ac.uk/explainers/explainer-security-action-for-europe-safe/. 11 House of Commons Defence Committee, The UK contribution to Euro- pean Security: Government Response, p. 5, confirming UK access to SAFE under standard third-country terms with UK content capped at 35%; Chat- ham House, The UK will not join the EU’s new defence fund. Can the UK–EU security reset still succeed?, December 2025; UK in a Changing Europe, After SAFE: Consequences for EU-UK defence industrial cooperation and potential ways forward; Council of the EU, press release, SAFE: member states endor- se agreement on the participation of Canada, 19 December 2025. 7878 M&A REVIEW UK 2/2026 • Volume 1 For M&A practitioners, this unresolved relationship has immediate practical consequences. A UK target’s ability to participate competitively in SAFE-funded procurement, and the terms on which it may do so, are live commercial diligence items that can materially affect valuation, par- ticularly for suppliers of platforms or components with a high European content requirement. Equally, UK acquirers of EU targets, and EU acquirers of UK targets, must navi- gate two separate foreign investment regimes in parallel: the German AWV (Außenwirtschaftsverordnung)-based FDI screening regime and its counterparts across the EU (25 of the 27 member states now operate a national screening mechanism, with the Commission retaining a coordinating role under Article 8 of the EU FDI Screening Regulation)12 on one side of the Channel, and the UK’s National Secu- rity and Investment Act 2021 (NSIA) on the other. The NSIA regime has become markedly more active: the govern- ment’s most recent annual report recorded 1,324 notifica- tions in the 2025-26 reporting period, up from 1,143 the year before, with the defence sector again the largest category, accounting for 58% of all notifications and 47% of the 60 call-in notices issued. Nine final orders were made in the period, eight imposing conditions and one prohibiting the transaction outright, though only two of the nine concerned the defence sector specifically (down from a larger share in the prior period), with advanced materials and data infra- structure accounting for most 2025-26 final orders. The comparison nonetheless illustrates a broader trend: notifi- cation volumes in both the UK and continental FDI regimes continue to rise, even as the proportion of transactions sub- ject to binding intervention remains modest.13 4. The EU’s Regulatory Recalibration: Competition, State Aid and Sustainable Finance The Defence Readiness Omnibus of June 2025 is best understood as an attempt to align competition and sus- tainability regulation with the EU’s industrial ambitions for the sector, without abandoning the underlying legal stand- ards. Three strands are of particular relevance to deal- makers operating across borders. First, merger control. The Commission has signalled that it will give materially greater weight to efficiency gains and the contribution of a transaction to European defence and security capability when assessing concentrations in the sector, a shift now being embedded in the broader revision of the EU’s merger guidelines. On 30 April 2026 the Com- mission published draft revised Merger Guidelines, the first comprehensive rewrite of the 2004 Horizontal and 2008 Non-Horizontal Guidelines in two decades, following the 12 Article 8 of Regulation (EU) 2019/452, OJ 2019 L 079I, 1. 13 UK Government, National Security and Investment Act 2021: Annual Re- port 2025-26; Dechert LLP, Insights from the Latest UK National Security and Investment Act Report, 17 July 2026; GOV.UK, Investment screening powers protect national security and support growth, press release, 14 July 2026.

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recommendations of the 2024 Draghi report on European competitiveness.14 The draft guidelines explicitly recognise that transactions increasing the scale, resilience and com- petitiveness of European industry, including in defence, can be viewed favourably, and introduce a more permis- sive framework for assessing merger-specific efficiencies, while maintaining the underlying significant impediment to effective competition test. A final text is expected later in 2026, but its principles are already shaping the Commis- sion’s approach to pending cases. Separately, the Commis- sion has confirmed that member states may rely on Article 346(1)(b) TFEU to exclude the purely military elements of a transaction from EU merger review altogether, confining the Commission’s jurisdiction to any non-military component.15 Second, cooperation agreements. The Commission has indicated greater tolerance under Article 101 TFEU for horizontal cooperation between defence companies – joint procurement, joint production and capacity-pooling arrangements – where these are necessary to meet capability requirements that no single company could satisfy alone.16 This materially widens the scope for struc- turing joint ventures and consortium arrangements of the kind already seen in KNDS’s Franco-German tank pro- grammes and Leonardo’s joint ventures with Rheinmetall and BAE Systems. Third, state aid and sustainable finance. The Commis- sion has confirmed that state aid supporting investment in defence production will typically qualify for the essen- tial security interests exemption under Article 346 TFEU and therefore fall outside the ordinary notification regime, reducing the clawback risk that has historically deterred state-backed defence transactions.17 On the sustainable finance side, a Commission Notice of 30 December 2025 clarifies that the EU sustainable finance framework, includ- ing the Sustainable Finance Disclosure Regulation (SFDR), the EU Taxonomy and the Corporate Sustainability Due Diligence Directive (CSDDD), does not prevent or limit financing of the defence sector, and recognises defence investment as a contributor to the European Union’s resil- ience and social sustainability, to be assessed case by case rather than excluded on a sector-wide basis.18 In parallel, amendments to the EU’s Paris-Aligned Benchmarks and Climate Transition Benchmarks Regulation, adopted at the end of 2025, replaced the concept of controversial weapons with the narrower and more precisely defined category of prohibited weapons (limited to anti-person- 14 European Commission, Draft Guidelines on the assessment of concentra- tions, published for consultation 30 April 2026; Cleary Gottlieb, EC Announces Wide-Ranging Reform of Merger Guidelines, 30 April 2026; Mario Draghi, The Future of European Competitiveness, September 2024. 15 Commission, Communication to the European Parliament and the Council, Defence Readiness Omnibus package, 17 June 2025, COM(2025) 820 final, p. 11 et seq.; Article 346(1)(b) TFEU. 16 Commission, COM(2025) 820 final, p. 12. 17 Commission, COM(2025) 820 final, pp. 13-14; Article 346 TFEU. 18 Commission Notice on the application of the sustainable finance fra- mework and corporate sustainability due diligence to the defence sector, C(2025) 3800, published in OJ C, C/2025/4950, 30.12.2025. REPORT • SECTOR FOCUS nel mines, cluster munitions, and biological and chemical weapons), giving institutional investors and lenders consid- erably greater clarity as to which defence exposures fall within restrictive sustainable-finance regimes. A parallel reform of the Corporate Sustainability Reporting Directive, adopted in 2026, has narrowed mandatory reporting to companies with net turnover above €450 million and more than 1,000 employees, while expressly permitting defence companies a wider margin of discretion to withhold clas- sified or commercially sensitive information from sustain- ability disclosures – a change of direct relevance to due diligence and post-merger integration.19 5. Financing the Rearmament: SAFE, EDF and the Wider Toolkit Beyond SAFE, the Commission amended the legal bases of several EU investment programmes in December 2025 to channel further resources towards defence. The European Defence Fund’s application process was simplified, its eval- uation criteria streamlined, and parallel funding from other EU programmes such as InvestEU was permitted for the first time. The STEP platform (Strategic Technologies for Europe) was expanded to prioritise defence technologies.20 Sepa- rately, the European Defence Industry Programme, adopted on 17 December 2025 and in force by the end of that year with a budget of €1.5 billion for 2025-2027 (of which €300 million is earmarked for a Ukraine Support Instrument), is intended to build shared production capacity across mem- ber states, subject to a rule that at least 65% of funded component costs must originate in the EU or associated countries.21 National fiscal space has also been widened: Germany and eleven other member states have activated the national escape clause under the EU’s Stability and Growth Pact, permitting additional defence expenditure of up to 1.5% of GDP outside ordinary budgetary constraints, which the Commission estimates could mobilise a further €650 billion for the European defence market.22 For acquirers of defence-related businesses, this expand- ing funding architecture has a direct valuation effect. Tar- gets that qualify as suppliers to SAFE-financed joint pro- curements, or whose research and development can draw on EDF funding, benefit from materially more visible and durable revenue streams than has historically been typi- 19 Delegated Regulation (EU) 2020/1818 (PAB/CTB), OJ 2020 L 406, 17, as amended (end of 2025); Directive (EU) 2026/470, OJ L, 2026/470, recital 14. 20 Articles 1-5 of Regulation (EU) 2025/2653, OJ L, 2025/2653 (amending, inter alia, Regulations (EU) 2021/695, (EU) 2021/697 and (EU) 2024/795 as regards incentivising defence-related investment in the EU budget). 21 Regulation (EU) 2025/2643 of the European Parliament and of the Council of 17 December 2025 establishing the European Defence Industry Program- me (EDIP); European Parliament, press release, Parliament greenlights first- ever European Defence Industry Programme, 25 November 2025; Council of the EU, press release, European Defence Industry Programme: Council gives final approval, 8 December 2025. 22 Commission, press release, Twelve Member States apply to activate the national escape clause in a coordinated action to boost defence spending, 30 April 2025, available at: https://ec.europa.eu/commission/presscorner/ detail/en/ip_25_1121. 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REPORT • SECTOR FOCUS cal in the sector – and the “Buy European” content require- ments embedded in SAFE create a further commercial incentive for acquirers to build sufficient European value- add into their supply chains through targeted acquisitions, including of UK and other third-country suppliers willing to relocate or expand production within the EU or EFTA. For UK targets and their acquirers in particular, this dynamic is best read together with the unresolved question of UK- SAFE association addressed in Section 3 above: absent a bespoke agreement, the 35% cap on non-EU/EFTA/Ukraine content means that relocating or expanding EU or EFTA production is, for now, the most direct route by which a UK- linked supply chain can exceed that ceiling and compete on equal terms for SAFE-funded work. A future UK-EU associ- ation agreement, of the kind already reached with Norway, Japan and Canada, could in principle reclassify UK-based content itself as qualifying, making relocation unnecessary; until then, however, that prospect should be factored into valuation and deal structure from the outset – for example through earn-outs or conditionality tied to relocation mile- stones – rather than treated as a contingency to be revis- ited only once an agreement is concluded. 6. Procurement Law: A Cautious Liberalisation that undertaking, the revised directive is unlikely to enter into force before 2027 or 2028.24 A related and, for M&A purposes, more consequential devel- opment is the EU’s drive towards collaborative procure- ment. Collaborative defence expenditure reached 24% of EU equipment procurement in 2025,25 up from 18% in 2022,26 though still short of the Commission’s 40% target by 2027.27 Companies positioned as suppliers across several national procurement programmes stand to benefit from structural competitive advantages and correspondingly higher acqui- sition values, while target companies whose contracts were awarded through a public procurement procedure require careful diligence: the Court of Justice of the European Union (CJEU) held in Pressetext that a genuine change of contract- ing party, as is typical of an asset deal outside a group, gen- erally constitutes a material modification requiring a fresh tender, whereas an internal reorganisation transferring the contract to a wholly owned subsidiary of the original contrac- tor does not, of itself, alter the contract’s essential terms.28 By analogy, a share deal, in which the contracting entity itself remains unchanged, is generally treated by German courts and commentators as procurement-neutral, save in cases of abusive structuring or where the incoming shareholder fails to meet qualification requirements.29 On the procurement side, the Commission’s proposal to revise the 2009 Defence and Security Procurement Direc- tive would raise the thresholds triggering the directive’s application from €432,000 to €900,000 for supply and ser- vice contracts and from €5.4 million to €7 million for works contracts, extend the maximum duration of framework agreements from seven to ten years, and integrate the innovation partnership procedure into the defence pro- curement toolkit. In its negotiating position of 26 Novem- ber 2025, the Council proposed going considerably further still, suggesting thresholds of €3 million for supply and ser- vice contracts and €15 million for works contracts. Political agreement between the Council and the European Par- liament on this package was reached in trilogue in June 2026, with formal adoption by both institutions expected in the second half of 2026 and implementation by member states anticipated in 2027-2028.23 This is a change of par- ticular relevance to SMEs and technology-focused sup- pliers whose contracts fall below the new thresholds, and whose attractiveness as acquisition targets is correspond- ingly enhanced. This simplification package should be dis- tinguished from a separate, more fundamental recast of the Defence and Security Procurement Directive (2009/81/ EC) as a whole, which the Commission has announced it will propose in the third quarter of 2026; given the scale of 23 Wolf Theiss, EU defence procurement reform – key developments for upcoming defence and security tenders, 2026, available at: https://www.wolft- heiss.com/insights/eu-defence-procurement-reform-key-developments-for- upcoming-defence-and-security-tenders/; INSIGHT EU Monitoring, Defence Omnibus: EU lawmakers agree provisional deal to speed up procurement, 10 June 2026, available at: https://ieu-monitoring.com/editorial/defence-omnibus- eu-lawmakers-agree-provisional-deal-to-speed-up-procurement/1243085. 7. Practical Guidance for Cross-Border M&A Transactions Several recurring themes should inform the structuring of any pan-European or UK-related defence transaction. Map every applicable screening regime from the out- set. A transaction with EU, UK and third-country dimen- sions may trigger German FDI screening under the AWV (Außenwirtschaftsverordnung)-regime, equivalent regimes in other member states, the Commission’s coor- dination role under the EU FDI Screening Regulation, and the UK’s NSIA simultaneously, each with its own thresh- olds, timelines and standard of review. Given the volume of parallel merger control and foreign investment filings now typical in European defence deals, illustrated by the Rheinmetall/NVL and KNDS/Texelis clearances, timeta- bles should build in adequate headroom for coordinated, rather than sequential, engagement with regulators. 24 Wolf Theiss, ibid. 25 European Defence Agency, Defence Data 2025-2026, published Sep- tember 2026, available at: https://eda.europa.eu/docs/default-source/eda- publications/2026-eda_defencedata_webpublic.pdf. 26 European Parliament, Briefing of 12 March 2026, available at: https:// www.europarl.europa.eu/RegData/etudes/BRIE/2026/785665/EPRS_ BRI(2026)785665_EN.pdf. 27 Commission, JOIN(2025) 120 final, p. 26. 28 Case C-454/06 (Pressetext Nachrichtenagentur), Judgment of 19 June 2008, ECLI:EU:C:2008:351, paras. 40-49, in particular paras. 44-45 and 47. 29 Higher Regional Court of Naumburg (Oberlandesgericht Naumburg), decision of 29.4.2010 – 1 Verg 3/10, NZBau 2010, 784; Greb/Stenzel, NZBau 2012, 404 (406); Müller, VergabeR 2015, 652 (656); Munich Commentary on Competition Law/Jaeger, GWB § 132 para. 53 with further references. 8080 M&A REVIEW UK 2/2026 • Volume 1

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Engage regulators early and transparently. Pre-noti- fication engagement with the German Federal Minis- try for Economic Affairs and Energy (Bundesministerium für Wirtschaft und Energie – BMWE), the UK’s Investment Security Unit and equivalent bodies elsewhere in Europe measurably shortens review periods and helps identify likely conditions, such as ring-fencing of sensitive technol- ogy or information barriers vis-à-vis a parent company, before they are imposed unilaterally. Treat SAFE and EDF eligibility as a genuine value driver. Acquirers should assess at the outset whether a target’s components meet the 65% European value-add thresh- old under SAFE, whether the target can plausibly qualify for EDF-funded research, and whether post-completion restructuring, for example relocating development activ- ity into the EU or EFTA, could materially improve funding access and, in turn, valuation. Do not assume UK-EU defence integration is settled. The collapse of the SAFE negotiations in late 2025 demon- strates that political commitments to closer UK-EU defence cooperation have not yet translated into a stable legal framework. Transaction planning should treat UK content restrictions, and the possibility of a future UK-EU agree- ment altering them, as a live commercial risk rather than a settled fact, and should monitor parallel bilateral tracks such as the UK-France Lancaster House arrangements as an alternative route to closer industrial cooperation. Choose transaction structure deliberately, not by default. The choice between an asset deal and a share deal in this sector carries procurement, export control and security clearance consequences that go well beyond the tax analysis that typically dominates the decision in other industries. Position ESG and sustainable finance considerations proactively. The Commission’s clarifications on the sus- tainability compatibility of defence investment, and the narrower definition of prohibited weapons under the revised Paris-Aligned and Climate Transition Benchmarks Regulation, give acquirers a genuine basis on which to engage ESG-conscious investors and lenders who might otherwise have been reluctant to finance the sector. 8. Conclusion Europe’s defence sector is being reshaped by a combina- tion of geopolitical necessity, an unprecedented mobili- sation of public capital, and a deliberate loosening of the competition, state aid and sustainability constraints that once made consolidation in this industry unusually diffi- cult. The result is a transaction environment more dynamic than at any point in decades, with major consolidation among Europe’s prime contractors, a rapidly expanding REPORT • SECTOR FOCUS funding architecture, and a Commission increasingly will- ing to treat scale and resilience as legitimate objectives of merger policy in their own right. Yet this is not a story of straightforward liberalisation. The unresolved question of UK participation in the EU’s flagship financing instrument, the parallel and still-diverging foreign investment regimes operated by the EU and the UK, and the residual complexity of procurement, export control and security clearance requirements mean that defence M&A remains one of the most demanding fields in which to advise. For acquirers and their counsel prepared to navigate that complexity with genuinely cross-jurisdictional expertise, the current environment offers a rare industrial necessity, and, with it, an unusually favourable window for building lasting pan-European defence-industrial champions. Dr Max Alles LL.M. (Columbia), MBA (Cambridge) is a Solicitor (England & Wales), Attorney-at-Law (New York) and German-qualified lawyer in the Munich office of Clifford Chance. He advises on national and cross-border M&A and private equity transactions, joint ventures, carve-outs and restructurings. Dr Alles teaches at the Ludwig Maximilian University of Munich, is a visiting lecturer on M&A at the University of Cambridge, and publishes regularly on topics related to M&A, corporate law, and capital markets law. Dr Nicole Englisch is a German-qualified lawyer, partner and Managing Partner of the Munich office of Clifford Chance. She advises domestic and international clients, including industrial and financial investors and private equity funds, on national and cross-border transactions, primarily mergers and acquisitions, takeovers, restructurings and joint ventures. M&A REVIEW UK 2/2026 • Volume 1 8181

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REPORT • SECTOR FOCUS Deals Under Duress: Healthcare M&A in an Age of Tariffs and Trade Barriers Kathrin Schroeder-Finckh, Dr Max Alles & Torsten Syrbe, Clifford Chance 1. Introduction The geopolitical developments of the past year and a half have put the healthcare and life sciences industry through a stress test. Volatile US tariff policies, Chinese trade restric- tions on rare earth elements, the EU’s first-ever use of the International Procurement Instrument and China’s counter- measures, as well as supply chain bottlenecks from escalat- ing military conflicts have exposed structural weaknesses in global supply chains, ranging from higher procurement costs to restrictions on market access. At the same time, strategic acquisitions and the divestiture of exposed busi- ness units can strengthen companies’ resilience. Companies must therefore revisit their supply chain strat- egies. Stability of supply and reduction of geopolitical risk are increasingly becoming independent drivers of M&A transactions. Acquiring local production capacity, inte- grating critical suppliers, and accessing markets with favourable regulatory conditions are gaining importance. The success of such transactions requires early-stage risk assessment and systematic contractual risk allocation. This article highlights which current developments are particularly relevant to healthcare M&A and how they must be factored into the transaction process. 2. Global Developments in the Healthcare & Life Sciences Industry A key development in recent months has been the impo- sition of tariffs on imports of patented pharmaceuticals into the US. The significance of US trade policy is not con- fined to US-headquartered businesses. The European life-sciences sector has substantial exposure to the US market, with 44% of EU exports of medicinal and pharma- ceutical products going to the US in 2025.1 Medical devices 1 Eurostat, International Trade in Medicinal and Pharmaceutical Products, Mar. 2026. 8282 M&A REVIEW UK 2/2026 • Volume 1

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were brought within stricter US tariff measures from April 2025, whereas pharmaceuticals were initially excluded but became subject to a separate, sector-specific Section 232 regime, with duties taking effect in stages from July 2026. This regime was implemented through Proclamation 11020,2 under which the US imposes a 100% ad valorem tar- iff on patented pharmaceuticals and active pharmaceu- tical ingredients, subject to certain carve-outs and tran- sitional relief. Companies with an approved US onshoring plan benefit from a reduced transitional rate of 20%, while those that have in addition made Most-Favoured-Nation pricing commitments towards the US (i.e. an undertaking not to charge the US more than other developed markets for the relevant products) benefit from a zero tariff rate until 19 January 2029. The US Biosecure Act, passed in December 2025, is of par- ticular relevance to the industry. It restricts US federal pro- curement and funding involving biotechnology equipment or services supplied by so-called “Biotechnology Compa- nies of Concern” (BCCs) and may also affect companies outside the biotechnology sector where covered equip- ment or services are used in the performance of US federal contracts. The legislation thus has broader implications for supplier and service-provider relationships across global life sciences value chains. Trade-policy tensions are not limited to the US. In medi- cal technology, the EU–China dispute over public procure- ment access illustrates the growing use of market-access measures in strategically important healthcare markets. Following concerns over European manufacturers’ access to tenders in China,3 the European Commission initiated proceedings in April 2024 under the International Procure- ment Instrument (IPI).4 In June 2025, it excluded 350 prod- uct categories from Chinese manufacturers from EU-wide public tenders for medical devices valued at €5 million or more.5 China responded with mirror measures a few days later.6 and German Markets 3. Specific Developments for the UK The UK and German healthcare markets are currently experiencing distinct but interconnected regulatory and trade-related developments. The United Kingdom has International Procurement Instrument pursuant to Regulation (EU) 2 The White House, Fact Sheet: President Donald J. Trump Bolsters National Security and Strengthens U.S. Supply Chains by Imposing Tariffs on Patented Pharmaceutical Products, 2 April 2026. 3 European Commission press release, 14 Jan. 2025 (IP/25/252). 4 2022/1031; European Commission, Report pursuant to Art. 5(4) of Regulation (EU) 2022/1031 on the IPI investigation concerning medical devices procure- ment in the PRC, COM(2025)5 final, 14 Jan. 2025, p. 5. 5 Commission Implementing Regulation (EU) 2025/1197 of 19 June 2025 imposing an International Procurement Instrument measure restricting the access of economic operators and medical devices originating in the Peo- ple’s Republic of China to the European Union public procurement market for medical devices, OJ L, 2025/1197, 20.6.2025. 6 Statement by the State Council of the People’s Republic of China, 6 July 2025. REPORT • SECTOR FOCUS obtained a time-limited and conditional degree of pro- tection from US pharmaceutical and medical-technology tariffs, while Germany is facing a US trade investigation directed at German pharmaceutical pricing and reim- bursement. Under the UK-US pharmaceutical arrangement reached in April 2026, the US committed, subject to stated con- ditions, not to apply Section 232 pharmaceutical tariffs to covered UK pharmaceutical products and specified medical-technology products until 19 January 2029, nor additional Section 301 tariffs to UK pharmaceuticals or medical technologies during the periods specified.7 The arrangement is subject to annual review and can be ter- minated on six months’ notice. It also provides for a US-UK Pharmaceutical Supply Chains Partnership focused on shortages, surge manufacturing and reducing reliance on non-market economies for key pharmaceutical inputs.8 The arrangement therefore provides a degree of current tariff certainty while remaining contingent on continued implementation and compliance with its conditions. Germany, by contrast, is currently the subject of a Section 301 investigation initiated by the US Trade Representa- tive (USTR) on 18 June 2026 pursuant to the US Trade Act of 1974. The investigation looks into what the USTR describes as Germany’s “persistent underpayment for innovative pharmaceutical products”. The investigation is a US domestic-law proceeding examining whether German acts, policies or practices are unreasonable or discriminatory and burden or restrict US commerce. The USTR’s notice initially identifies two areas: conditions for confidential pharmaceutical reimbursement amounts, including what the notice describes as a 9% discount and additional administrative costs; and certain measures related to the Statutory Health Insurance Contribution Rate Stabilisation Act, which relate to a further increase in the currently applicable mandatory rebate for patent- protected pharmaceuticals. A separate connection with US policy which is relevant for both markets arises from the US Biosecure Act, restrict- ing specified US federal bodies, contractors and federal- funding recipients from using equipment or services from designated BCCs.9 The Act’s prohibitions are not imme- diate. The Office of Management and Budget (OMB) is expected to publish the first list of covered companies by December 2026, with implementing guidance and Federal Acquisition Regulation (FAR) revisions expected to follow into 2027 and 2028. Depending on the category of desig- nated company, the restrictions are generally expected to 7 UK Department for Science, Innovation & Technology, Arrangement bet- ween the United States of America and the United Kingdom on Pharmaceu- tical Pricing, 2 April 2026. 8 tical Ingredients into the United States, 2 April 2026. 9 BIOSECURE Act, enacted as § 851 of the National Defense Authorization Act for Fiscal Year 2026, Pub. L. No. 119-60 (2025). Ibid.; White House, Adjusting Imports of Pharmaceuticals and Pharmaceu- M&A REVIEW UK 2/2026 • Volume 1 8383

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REPORT • SECTOR FOCUS take effect within two to three months after the FAR revi- sion, subject to a five-year grandfathering period for pre- existing contracts.10 UK- and Germany-based businesses can nonetheless be affected well before then, indirectly, where a US customer, collaborator or investor requires a supply chain free of designated providers. This may bring supplier-level diligence into focus, particularly in relation to China-linked Contract Research Organisations (CROs), sequencing providers and Contract Development and Manufacturing Organisations (CDMOs), as well as con- tractual substitution rights. UK policy towards China is not one of comprehensive decoupling: the January 2026 UK-China trade package welcomed Chinese approvals for UK vaccines and medical devices and broader market access for certain medicines and healthcare services.11 Yet concerns regarding supply- chain resilience remain pronounced. Government assess- ments continue to identify China as the UK’s largest source of goods for which the UK has limited alternative supply, including helium, rare earth elements and tantalum used in MRI and CT scanners, X-ray tubes and ultrasound equip- ment.12 Concerns relating to critical technologies and sup- ply-chain resilience also increasingly intersect with foreign investment screening. Healthcare is not one of the seven- teen standalone mandatory sectors under the National Security and Investment Act 2021,13 but many healthcare targets engage specified sectors such as synthetic biology, AI, data infrastructure, advanced materials and critical suppliers to government. The common thread running through all the devel- opments in both markets is the growing intersection between healthcare policy, trade relations and national security. Whether through tariff arrangements, pricing disputes, supply-chain restrictions or foreign investment controls, geopolitical considerations are becoming an increasingly significant feature of healthcare M&A on both sides of the Channel. 4. Considerations in Transaction Structuring The developments described make supply chain resil- ience a strategic priority. Tariffs, blocked transport routes and regulations such as the US Biosecure Act demonstrate that supply chain risks are no longer merely operational but are directly relevant to transactions. They influence nearly every phase of the M&A process: target selection, 10 National Defense Authorization Act for Fiscal Year 2026, Pub. L. No. 119-60, § 851(c)-(d) (2025), available at: congress.gov/bill/119th-congress/house- bill/3838. 11 UK Government, Prime Minister visit to China: trade and investment facts- heet, 30 January 2026. 12 UK Government, Critical Imports and Supply Chains Strategy, 17 January 2024. 13 UK Government, National Security and Investment Act 2021, c. 25. 8484 M&A REVIEW UK 2/2026 • Volume 1 due diligence, valuation and contractual risk allocation. The following section addresses due diligence, contract review, carve-out structures, warranties and indemnities, and transition agreements. 4.1 From Risk Analysis to Contract Drafting Buyers and sellers must consider trade-conflict implica- tions throughout the transaction: the target’s exposure to tariffs, import quotas and export controls, and the dependence of key suppliers and distribution channels on political change. Early analysis lays the foundation for operational remedies and contractual risk allocation. 4.2 Preparation on the Seller’s Side (“Dressing the Bride”) Sellers should systematically identify and document sup- ply chain risks before the sales process begins. Remedi- able deficiencies should be addressed in advance, and remaining risks presented transparently for due diligence: dependencies on critical raw materials and suppliers, the contractual allocation of customs and procurement risks, and measures for dealing with supply bottlenecks and trade restrictions. 4.3 Selection of the Target Company and Buyer Due Diligence When selecting the target company, production locations, geopolitical exposure and regulatory frameworks should be considered alongside strategic and economic criteria. Local production capacity can reduce customs risks and supplier dependencies. Two areas take centre stage in due diligence: 4.3.1 Supply Chain Stability and Applicability of Exemptions under the UK-US Pharmaceutical Arrangement Buyers must have a detailed understanding of the prod- uct portfolio, components and raw materials – particu- larly rare earth elements in medical technology and active pharmaceutical ingredients (APIs) in pharmaceuticals – and verify whether these are subject to import restrictions or tariffs. Strict price regulation combined with inflexible tender contracts makes cost increases along the supply chain particularly burdensome, especially in structurally low-margin segments such as generics. Practical Q&A questionnaires should be product-specific and address each key component or raw material, including availabil- ity of alternative sources of supply. Beyond origin-based exemptions, buyers should also verify whether the target

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has made, or could make, a Most-Favoured-Nation pric- ing commitment, as this can independently eliminate Sec- tion 232 tariff exposure on patented products. The practical availability of the benefits under the UK-US pharmaceutical arrangement will often depend on whether individual products qualify as “of the United King- dom” under the applicable US rules of origin, rather than on the existence of manufacturing activities in the UK alone. Determining eligibility typically requires a product-specific analysis of the origin of APIs and key starting materials, as well as the nature and significance of the manufacturing steps performed. In transactional contexts, this assess- ment is commonly informed by documentation such as bills of materials, supplier declarations, batch records and customs filings. Any identified uncertainties may become relevant to deal structuring and risk allocation mecha- nisms, including pre-closing remediation measures, tai- lored customs-related protections and, where appropri- ate, purchase price adjustments. 4.3.2 Customs Refunds Buyers should determine which customs duties the tar- get company can reclaim, as this affects valuation. The US Court of International Trade ordered the refund of approximately $166 billion in duties under the IEEPA after the Supreme Court ruled in Learning Resources, Inc. v. Trump that the duties were unlawful.14 By the end of July 2026, approximately $100 billion had actually been paid out. By way of example, Siemens Healthineers received refunds of more than $200 million in Q3 of its 2025/26 fiscal year and raised its earnings forecast on 31 July 2026.15 Buy- ers should also examine whether reimbursement claims from earlier transactions were sold off and how customer and supplier contracts address customs surcharges. 4.4 Recent Transactions and Business Valuation The strategic importance of trade conflicts for healthcare M&A is evident in recent transactions. Celltrion acquired a US manufacturing facility from Eli Lilly, citing elimination of tariff risks and the expansion of US manufacturing capac- ity as key reasons.16 Reflecting pressures associated with the US Biosecure Act, several life sciences companies have reviewed or restructured China operations: GE Healthcare explored a sale of its China business,17 Bristol-Myers Squibb 14 Supreme Court of the United States, Learning Resources, Inc. v. Trump, 607 U.S. 229 (2026), available at: supremecourt.gov. 15 Siemens Healthineers AG, Interim Report Q3 Fiscal Year 2025/26, 31 July 2026. 16 Celltrion, Letter to Shareholders [Update on the Acquisition of Eli Lilly’s U.S. Manufacturing Facility], 11 Nov. 2025. 17 Wu, K., “GE Healthcare Exploring Sale of China Unit, Source Says,” Reuters, 19 Sept. 2025. REPORT • SECTOR FOCUS sold its 60 percent stake in a Chinese joint venture,18 and WuXi Biologics sold a vaccine plant in Ireland to Merck & Co.19 These examples illustrate two patterns: acquisition of tariff-privileged capacity, and divestiture of exposed business units. Location and supply chain exposure thus become value-determining parameters, for example through differentiated discount rates. 4.5 Contract Review: Incoterms, Force Majeure, and Price Adjustments Buyers must thoroughly analyse contracts with key cus- tomers and suppliers – Incoterms® 2020, force majeure and hardship clauses, and price adjustment mechanisms govern the allocation of costs and risks and are gaining importance against the backdrop of recent trade con- flicts. Under the eleven Incoterms, with the exception of the “Delivered Duty Paid” (DDP) term, the buyer bears import duties, while under ten of the eleven terms, the seller bears the export duties; the sole exception is the “Ex Works” (EXW) term, under which the buyer also bears export costs. An unfavourable allocation of costs and risks can be factored into the transaction documentation and purchase price valuation – this becomes particularly challenging when Incoterms change within a chain of contracts. Force majeure and hardship clauses do not automatically cover supply chain disruptions. Older contracts in particular are often not tailored to export bans, raw material short- ages or the closure of transport routes, giving rise to inter- pretation and litigation risk. Exclusivity agreements for raw materials and active ingredients should also be reviewed. Price adjustment mechanisms should be assessed for trig- gers, calculation methods, thresholds and pass-through options, as well as indirect consequences such as contrac- tual penalties or regulatory sanctions resulting from supply failures of critical pharmaceuticals. 4.6 Risk Allocation in the Transaction Documentation The results of customs and sanctions due diligence can be incorporated into the transaction documentation at several levels: through an adjustment of the transaction scope, the purchase price mechanism, covenants between signing and closing, as well as specific warranties, indemnities, and post-closing undertakings. The appropriate instrument depends in particular on whether a risk is already known, can be remedied before closing, or remains uncertain only with regard to its economic impact. 18 Reuters, “Bristol Myers to sell 60% stake in China joint venture,” 17 Sept. 2025. 19 Sneha, “China’s WuXi Biologics to sell Irish vaccine facility to Merck as U.S. curbs loom,” Reuters, 6 Jan. 2025. M&A REVIEW UK 2/2026 • Volume 1 8585

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REPORT • SECTOR FOCUS 4.6.1 Scope of the Transaction In the healthcare sector, activities in sanctioned countries sometimes continue, as certain sanctions regimes provide exceptions or authorisation options for pharmaceutical and medical purposes; permissibility depends on the products, business partners, cash flows and required authorisations involved. Where the buyer, its banks or the W&I insurer can- not or will not assume, finance or insure such a transaction, a carve-out – or, where structures can be sufficiently sep- arated, ring-fencing – may be considered, with remaining risks mitigated through specific guarantees or indemnities. Separation before signing must be specified in the binding offer or as a closing condition, including implementation obligations and consequences of non-compliance. 4.6.2 Earn-out Mechanisms If the economic consequences of potential tariff changes cannot be reliably quantified when determining the pur- chase price, an earn-out can bridge the valuation gap. In EBITDA-based models, adjustments to key metrics must be clearly defined; where risks are product- or region- specific, net revenue, gross margin or product-specific manufacturing costs may be more appropriate. The cal- culation should account for pass-through of customs costs, exchange rate effects, supplier or location changes, and changes in transfer prices and reimbursement terms, rul- ing out double counting or unilateral influence on the cal- culation basis. A dispute resolution mechanism with access to relevant operational and accounting records is likely to be essential. 4.6.3 Covenants between Signing and Closing For the period before closing, material customs and sanc- tions-related events should be covered by clearly defined information and notification obligations, with trigger events including changes in customs rates, classifications or origin determinations, authority inquiries, and loss of essential permits. The seller may also be required to continue oper- ating in compliance with the law and to remedy identified deficiencies. The buyer’s right to withhold consent must be limited to exceptional measures affecting transaction value and must not confer premature control or interfere with normal operations. In transactions between competi- tors, “clean team” structures must also be provided for. 4.6.4 Specific Customs-Related Warranties Given the US Trade Fraud Task Force established in 2025 by the Department of Justice and Department of Home- land Security – which generated over $1 billion in civil and criminal recoveries, penalties, forfeitures and publicly 8686 M&A REVIEW UK 2/2026 • Volume 1 charged losses within one year20 – customs-related risks should not be covered solely by a general “compliance with laws” warranty. A standalone guarantee aligned with the tax definition and tax guarantees is more appropriate, covering customs value, non-preferential and preferential origin, accuracy of customs declarations, and ongoing or announced audits, with known issues addressed through specific exemptions. 4.6.5 Customs Refunds and Exemptions The purchase agreement should expressly stipulate which party is economically entitled to customs refunds – decisive factors being the period during which duties were paid and who bore the original economic burden. If refunds for periods prior to closing are to benefit the seller, customs duties must be included in the tax definition or reflected through a separate post-closing refund obliga- tion, addressing control over the refund process, filing and cooperation obligations, cost allocation, and treatment of interest, taxes and pass-through obligations. Identified but uncertain payment risks may warrant specific customs- related exemptions. 4.6.6 W&I Insurability Historical customs compliance risks must be distinguished from the future economic consequences of new customs duties. Breaches of specific warranties relating to previ- ously unknown historical facts can generally be included in W&I coverage, provided the area has been sufficiently reviewed and the insurer accepts the risk during under- writing. Forward-looking margin or cost risks from duties introduced only after signing generally fall outside core W&I scope. Risk-appropriate customs due diligence, docu- mented classification and origin positions, and consistent data on goods flows and prior audits support the most robust coverage; known or excluded risks must be covered through seller liability or a specific indemnity. 4.7 Transition Agreements: Production and Supply Agreements In carve-outs of product portfolios initially continuing to be manufactured by the seller after closing, a temporary manufacturing and supply agreement is typically required to ensure continuity of supply and give the buyer time to establish alternative capacity. Beyond production, delivery and compensation, the agreement should cover the trans- fer of technology, know-how and manufacturing docu- mentation, and a binding exit and transfer plan. 20 U.S. Department of Justice, Departments of Justice and Homeland Security Partner on Cross-Agency Trade Fraud Task Force, press release, 29 August 2025.

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In the healthcare sector, the agreements must be closely integrated with regulatory and quality-related require- ments – GMP compliance, batch release, complaints, audits, recalls, and communication with regulators – and the contractual division of responsibilities cannot override the parties’ statutory obligations. Operational parameters also deserve attention: forecasting and ordering mecha- nisms, minimum and maximum quantities, capacity res- ervations, safety stock levels, and contract terms and renewal options, with pricing covering not only the manu- facturing margin but also raw material, energy and cus- toms costs. The choice of Incoterms should specify the place of deliv- ery, generally in accordance with Incoterms 2020, and align with the actual supply chain, particularly regarding which party acts as exporter or importer and bears import duties; Incoterms allocate costs and risks but do not replace separate provisions on transfer of title and tax treatment. Force majeure and price adjustment clauses should be distinguished functionally: a force majeure clause exempts a party from performance in the event of uncontrollable circumstances, whereas mere cost increases do not auto- matically trigger a price adjustment, so changes in cus- toms duties and import bans should be expressly accom- panied by notification obligations or a right to terminate the contract. 5. Conclusion and Outlook The geopolitical upheavals of the past year and a half – IEEPA tariffs and their partial repeal, export controls on rare earths, the EU IPI, and the US Biosecure Act – have exposed the vulnerability of global supply chains. Resil- ience and regulatory robustness are gaining importance over pure cost optimisation; M&A transactions increasingly serve not only expansion or portfolio optimisation, but also the securing of strategic supply chains. The acquisition of local production capacity, critical sup- pliers, or target companies with resilient, regulatory-com- pliant supply structures can reduce dependence on geo- political risks and secure access to strategically important intermediate goods, while targeted divestitures of exposed business units enable a focus on more resilient market seg- ments. In practice, this means expanding traditional due diligence to include a systematic analysis of customs, trade and supply-chain risks, including customs exposures (and potential refund claims), dependencies on critical raw materials and active ingredients, and the contractual allocation of risk across the supply and sales chain. Identi- fied risks should then be addressed through an appropri- ate combination of structural and contractual protections, including carve-outs or ring-fencing measures, earn-out mechanisms, specific warranties and indemnities, and tar- geted post-closing obligations. REPORT • SECTOR FOCUS The increasing use of restrictions on trade as a geopoliti- cal steering instrument is unlikely to be temporary. Health- care companies should treat supply chain resilience as integral to strategy. M&A can enable growth while also strengthening operational resilience and managing geo- political risk. Kathrin Schroeder-Finckh is a Senior Associate in Clifford Chance’s Düsseldorf office, a member of the firm’s Global Healthcare & Life Sciences Group, and a certified Healthcare Compliance Officer. She advises companies on trans- actions in the healthcare sector; her practice focuses in particular on transaction-related commercial agreements and the structuring of long-term ma- nufacturing and supply arrangements in regulated industries. Dr Max Alles LL.M. (Columbia), MBA (Cambridge) is a Solicitor (England & Wales), Attorney-at-Law (New York) and German-qualified lawyer in the Munich office of Clifford Chance. He advises on national and cross-border M&A and private equity transactions, joint ventures, carve-outs and restructurings. Dr Alles teaches at the Ludwig Maximilian University of Munich, is a visiting lecturer on M&A at the University of Cambridge, and publishes regularly on topics related to M&A, corporate law, and capital markets law. Torsten Syrbe is a Partner and Co-Head of Clifford Chance’s Global Healthcare & Life Sciences Group. He advises corporates, investors and public institutions on complex strategic projects across Europe, the Middle East and beyond. His practice focuses in particular on transactions, regulatory transfor- mation projects, and the structuring of long-term collaborations and investment models in regulated industries. M&A REVIEW UK 2/2026 • Volume 1 8787

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REPORT • BRISTOL M&A SOCIETY The Recent Deals Shaping UK M&A Erik Pavlovskyy & Jai Chauhan Erik Pavlovskyy & Jai Chauhan UK M&A recently has been a story of fewer deals but big- ger ones. Deal value more than doubled to £124.2 billion in the first half of the year, even as the number of trans- actions fell. Behind that headline, a few clear trends are shaping the market, and the three deals in this edition capture most of them. The first is continued consolidation, as buyers pay for scale and the cost savings that come with it, as Santander’s pur- chase of TSB shows. The second is the pull of cheap valua- tions. Years of underperformance have left British compa- nies looking like bargains to overseas buyers, and Prologis was willing to pay a 39% premium for SEGRO. Those buyers are also facing tougher negotiations. SEGRO turned down three offers before accepting the fourth, and easyJet sparked a summer bidding war between two American investors. The result is a London market that keeps shrink- ing, with companies leaving through takeovers faster than new listings arrive to replace them. SEGRO and easyJet are the latest names set to go. Santander / TSB Few banks have had a rougher ride than TSB. In 2018, a botched technology upgrade locked thousands of cus- tomers out of their own accounts. Eight years later, it has changed hands in a £2.65 billion cash deal, and both sides are calling it a win. TSB at about five times its expected 2026 earnings once cost savings are counted and 1.45 times its tangible book value. The deal makes Santander UK the country’s third-largest bank by personal current account balances and fourth in mortgages, serving close to 28 million customers alongside TSB. More customers mean cheaper funding, more lend- ing and more chances to sell extra products to people who already bank with you. Santander expects at least £400 million in annual savings and is targeting a 16% return on tan- gible equity by 2028. Most of that should come from moving TSB onto Santander’s technology and trimming duplicated back-office work, with the two banks due to merge in the first half of 2027. For Sabadell, the sale made just as much sense. It bought TSB in 2015 and never quite turned it into a star. Selling let it walk away from a UK distraction and return cash to shareholders, at a moment when it was also fending off a takeover approach from BBVA. Santander UK’s chief executive called it the sector’s largest investment in over 15 years, a sign that size matters more than ever in British banking. Yet bigger banks raise fair questions about competition and customer choice, and for now TSB keeps its own brand. The biggest risk is execution. The £400 million only materialises if the integration goes smoothly, and TSB’s own history is a reminder of how badly that can go wrong. Prologis / SEGRO Santander UK completed the purchase from Spain’s Sabadell on 30 April 2026, paying £2.65 billion plus roughly £213 million to reflect growth in TSB’s net assets. It values Prologis has agreed to acquire SEGRO in a deal valuing the company at around £13.9 billion. SEGRO is Britain’s biggest listed property company, and Prologis is the world’s big- 8888 M&A REVIEW UK 2/2026 • Volume 1

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gest warehouse landlord, based in the US. Together, they form a logistics giant. SEGRO shareholders voted in favour of the deal on 28 September, and completion is expected in the first half of 2027, subject to regulatory clearances. Prologis gets scale where it wants it. Its European footprint grows significantly, and its European land bank grows as well. Land matters because good warehouse sites near cities are relatively scarce and buying them one plot at a time is slow. SEGRO’s existing land and customer rela- tionships give Prologis a shortcut. Prologis gains a ready- made, high-quality portfolio. SEGRO’s shareholders get a stake in a much larger, globally diversified business, plus cash if they want it. SEGRO’s chief executive said both firms share a belief in long-term demand for modern logistics and data centres. The cost savings from combining should come from spreading Prologis’s global operations and financial strength across SEGRO’s assets. This deal is the latest in a run of prominent departures, with 11 companies valued above £1 billion taken over this year. It is also the fourth listed Real Estate Investment Trust (REIT) to be absorbed into a larger international REIT in recent years. The takeover arguably shows that London under- values its property companies, which is why foreign buyers can pay a large premium and still get a good deal. The concern is less about any single deal than about London steadily hollowing out. There are mitigating factors. Prologis has agreed to explore a secondary London listing so UK investors can still hold shares. But a secondary listing is a lot weaker than a primary one: the company is run and valued from the US, and a sec- ondary listing in London does not bring the same trading activity, index weighting or prestige. However, it is not all bad news for the London market as it could make the UK REIT market more dynamic and bring more investment to the UK. Apollo / easyJet Although not completed, Apollo’s potential takeover of the budget airline easyJet is one of the most interesting deals of the past quarter. For most of the summer, two large American investors fought over easyJet, with the winner only confirmed at the beginning of August. easyJet’s board accepted a £7.15 per share cash offer, valuing the airline at approximately £5.7 billion. Castlelake, a US investor that specialises in aviation, was the first to bid. After easyJet rejected its early bids, Castle- lake came back multiple times, and the board eventually agreed in principle to an offer of 690p a share. Days later, Apollo came in at 715p. The board switched its support, and on 6 August Castlelake walked away, although it has kept the right to return in certain circumstances. For sharehold- ers, the contest paid off. The final price is an 81% premium to where easyJet traded before takeover talk began. REPORT • BRISTOL M&A SOCIETY So why fight over a budget airline? The answer lies mostly in what easyJet owns. It holds valuable landing slots at busy airports including Gatwick, Paris and Geneva, and slots are scarce and almost impossible to buy in bulk. The airline has also trailed Ryanair on profitability for years, which gives a new owner room to add value. Apollo says it will build on the existing strategy rather than replace it, particularly by growing ancillary revenue (the money made from bags, seats and extras) and loyalty schemes. The deal struc- ture is also unusual. UK and EU rules limit foreign control of airlines, so Apollo will own no more than 49.9%. easyJet founder Sir Stelios Haji-Ioannou, whose family holds about 15%, is backing the deal and rolling his entire stake into the new private company rather than taking cash. However, this deal still has hurdles to clear. Shareholders vote in November, with completion expected by the end of Q1 2027. The more prominent risk is regulatory: as the EU reviews its airline ownership rules, stricter rules could unpick Apollo’s carefully built structure. Also, Apollo has not said how much debt it plans to put on easyJet. Private equity lev- erage works well in a steady business, but aviation is rarely steady for long. Overall, if it completes, easyJet becomes another household name to leave the London market. Outlook Together, these three deals capture the state of UK M&A this year, with bigger deals, foreign buyers willing to pay up, and shareholders holding out for more. For sellers, these premiums are welcome. For London, each takeo- ver leaves the market a little smaller. We feel the outlook depends on a few things. Rising interest rates will make deals more expensive to finance, particularly for private equity, as the Bank of England edges towards a hike. The valuation gap with the US, however, shows little sign of closing, so UK companies will remain attractive to foreign buyers. Regulators may also take a harder line on foreign control of strategic assets, as the EU’s airline review sug- gests. Overall, we expect activity to slow slightly but stay strong into 2027, with strategic buyers doing more of the work than private equity. Erik Pavlovskyy Studying BSc Economics and Finance, summer intern at ICON Corporate Finance, work experience at Rothschild & Co. Jai Chauhan Studying BSc Economics and Finance, work experience at Morgan Stanley. M&A REVIEW UK 2/2026 • Volume 1 8989

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IMPRINT Issue 2/2026 | Volume 1 www.ma-review.uk Editor Prof. Dr Florian Bauer • University of Bristol Business School • University of Bristol M&A Observatory • University of Bristol, Bristol, United Kingdom • www.bristol.ac.uk Editorial Office M&A Media Services GmbH • Stefan Schneider (Project Lead & Publisher) • Habenschadenstr. 16, 82049 Pullach, Germany hello@manda.co • www.manda.co Publisher M&A Media Services GmbH • Habenschadenstr. 16, 82049 Pullach, Germany • hello@manda.co • www.manda.co Managing Director: Stefan Schneider Academic Partner University of Bristol Business School • University of Bristol M&A Observatory, Bristol, United Kingdom Publication M&A REVIEW UK is an international publication focusing on mergers & acquisitions, private equity, transformation, restructuring, entrepreneurship through acquisition and strategic corporate development. The publication serves as a platform connecting academia, advisory, corporates, investors and future talent within the European M&A ecosystem. Subscription Management M&A Media Services GmbH • Subscription Management M&A REVIEW UK • Habenschadenstr. 16, 82049 Pullach, Germany • hello@manda.co Cover & Visual Identity Layout & Realisation Henrike Tack ht.design.marketing • Schulstraße 17, 17194 Moltzow, Germany • Mail: info@ht-design-marketing.de • www.ht-design-marketing.de Printing Joh. Walch GmbH & Co. KG, Im Gries 6, 86179 Augsburg, Germany Liability & Notices Articles, recommendations and information published in M&A REVIEW UK are based on sources considered reliable by the editorial team. However, no guarantee can be given regarding completeness or accuracy. The editorial office reserves the right to shorten, edit or reject unsolicited submissions. Opinions expressed in signed articles are those of the respective authors and do not necessarily reflect the views of the publisher, editor or academic partners. Copyright © 2026 M&A Media Services GmbH, Pullach, Germany. All rights reserved, including translation rights. No part of this publication may be reproduced, stored or transmitted in any form or by any means without prior written permission of the publisher. Photography & Media Notice Photography and video recordings may take place during related M&A REVIEW UK events and activities. Participation may imply consent to the use of visual material for editorial, promotional and community communication purposes unless otherwise stated in writing. Contact hello@manda.co • www.ma-review.uk AD IIIIII M&A REVIEW UK 2/2026 • Volume 1

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Not every lamp has a genie Savvy deal-makers know that stories don’t always have happy endings. That’s why they need transactional risk insurance from trusted advisers. Wish wisely. Your world is our world www.libertygts.com Liberty Global Transaction Solutions (GTS) is a trading name of the Liberty Mutual Insurance Group (LMIG). Policies are underwritten by LMIG companies or our Lloyd’s syndicate. When we offer insurance products we will state clearly which insurer will underwrite the policy. Any description of cover in this document does not include all terms, conditions and exclusions of any cover we may provide, which will be contained in the policy wording itself. For policies issued in USA, some policies may be placed with a surplus lines insurer; surplus lines insurers generally do not participate in state guaranty funds and coverage may only be obtained through duly licensed surplus lines brokers. © 2024 Liberty Mutual Insurance, 175 Berkeley Street, Boston, MA 02116.

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