UK-dependent U.S. companies downplay 'Brexit' worries

Tue Jun 21, 2016 7:01am EDT
 
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By Noel Randewich and Nick Carey

(Reuters) - U.S. companies which depend on the United Kingdom for sales are downplaying the risk that a vote by Britain to leave the European Union could seriously harm their businesses, even as economists and Wall Street have expressed concerns about the trans-Atlantic economic impact.

Britain, the fifth-largest buyer of U.S. exports last year with an estimated $56 billion in purchases according to the U.S. Census Bureau, is scheduled to vote on Thursday to determine whether it should stay in the European Union or withdraw.

Leaving the EU could hit the $2.9 trillion British economy with a sharp economic slowdown, some economic forecasters say, and bring a devaluation of the pound GBP= - a scenario that would inevitably hit U.S. exporters.

But American companies relying on UK sales, including Molson Coors (TAP.N: Quote), Penske Automotive Group Inc (PAG.N: Quote) and PPL Corp (PPL.N: Quote), a Pennsylvania-based power company, have downplayed the impact a so-called Brexit vote would have on their business.

After polls a week ago indicated dramatic gains by the "Leave" camp, Brexit has become a central question posed on calls and at investor conferences.

Campaigning for the June 23 referendum resumed on Sunday after a three-day suspension following the killing last week of British lawmaker Jo Cox, and three polls at the weekend showed the "Remain" camp gaining momentum. The killing of Cox has shocked Britain and could yet prove a defining moment in a vote that will shape the nation's role in world trade and also determine the future of the bloc.

In the first two weeks of June, the British referendum was discussed at least 20 times on quarterly conference calls and events held by publicly-listed U.S. companies, double the amount the previous week, according to Thomson Reuters data.

During those appearances, U.S. corporate executives have said the effect would be mainly one of temporary or hedgeable currency risk, and that they would have plenty of time - estimated at two years - to plan for an actual exit.   Continued...

 
A branded balloon and mug are seen in the office of pro-Brexit group pressure group "Leave.eu" in London, Britain February 12, 2016. REUTERS/Neil Hall