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Changes to UK M&A Trends

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Figures from EY state the volume of M&A deals in the UK, in the first nine months of 2017, fell 11% compared to last year. However, the value of these deals was up 9% at £122bn.

 

The figures also show a rise in domestic M&A, making up almost £60bn of total deals, compared with £23bn the same time last year.

 

Considered reasons for a fall in the number of deals include ongoing uncertainty from foreign buyers. Brexit saw a fall in the value of Sterling, resulting in a rise in foreign investment and takeovers. Since the initial surge, Britain’s political and economic future remains unclear, and the outcome of the general election of 2017 and ongoing Brexit negotiations could be contributing factors.

 

Conversely, a rise in domestic M&A could be attributed to an increase in cash among strategic buyers. Corporate strategy may also be defensive measure, where corporates are acquiring rivals and reducing competition in the midst of future economic uncertainty. Another motivation for domestic M&A is the purchase and integration of tech enabled rivals as a potentially more efficient option than R&D for automation and transformational growth.

 

EY also noted that outbound M&A was down “unexpectedly” compared to recent quarters, despite the rise in global growth providing a potentially attractive contrast to uncertainty of the domestic market. However, it may be too early to read too much into this change.

 

So, this article has provided a macro summary of M&A in the UK, but The Corporate M&A Exchange is hosting a panel session on Growth Strategy, where Corporates AXA, Callcredit and Qiagen will discuss their focus on acquisition, partnering and how to grow their strategy is addressing disruptive technologies. The Exchange is also hosting an emerging markets panel, where corporates and equity investors will offer their perspectives on the potential markets for outbound M&A growth.

 

 

 

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