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The Deloitte US/UK M&A Deal Monitor 1H 2017

The attraction is still mutual

Technology remains the driving force in M&A

Overview

The Deloitte US/UK M&A Deal Monitor follows trends and analyses underlying driving forces in the most active merger and acquisition arena in the world economy today. In our fourth edition we focus on the latest half year of M&A activity (January 2017 to June 2017) between the US and the UK, set in the context of the most recent 8 quarters in the US/UK ‘corridor’.

The level of M&A deal flow between the UK and North America means this is still the biggest bilateral deal corridor in the world by volume. However, for the first time in eight quarters divergent expectations for the near to medium term are emerging. There remains a high degree of confidence that the wider M&A market will remain strong over the next half year, due to high structural demand and supportive financial conditions. However, data show that US dealmaking into the UK has taken a step down.

US/UK cross-border M&A deals

  • Source: Thomson One Banker

US/UK deal volume and value by industry Q3 2015-Q2 2017

  • Source: Thomson One Banker

Corporate and private equity deals by volume

  • Source: Thomson One Banker
N.B Deal value calculations are based on M&A deals for which value is disclosed – values are not disclosed for a significant proportion of M&A deals. Volume calculations are based on all announced deals whether or not value is disclosed.

US outbound deal volume by UK regions since Q3 2015

UK outbound
London
201
South East
71
North West
21
East
20
Scotland
16
South West
16
East Midlands
6
Yorkshire & The Humber
6
West Midlands
5
Wales
2
North East
1
Northern Ireland
1
Offshore
1
Others
50
US outbound
London
200
South East
115
East
55
North West
38
East Midlands
30
South West
20
West Midlands
28
Scotland
25
Yorkshire & The Humber
23
Wales
14
North East
6
Northern Ireland
6
Offshore
1
Others
117
  • Source: Thomson One Banker

UK outbound deal volume by US States since Q3 2015

US outbound
New York
149
California
117
Illinois
45
Texas
37
Massachusetts
34
Connecticut
27
Georgia
25
Florida
24
New Jersey
24
Colorado
21
Others
183
UK otbound
California
78
New York
63
Texas
32
Massachusetts
22
Delaware
19
Florida
18
New Jersey
18
Illinois
15
Georgia
13
Pennsylvania
13
Others
126
  • Source: Thomson One Banker
N.B Deal value calculations are based on M&A deals for which value is disclosed – values are not disclosed for a significant proportion of M&A deals. Volume calculations are based on all announced deals whether or not value is disclosed.

Key themes

  • US dealmaking into the UK has fallen by almost 15% in 1H 2017, with several dealmakers pointing to the Brexit effect.
  • UK dealmaking into the US has risen by almost 10% in 1H 2017, with UK investors keen to secure revenue growth in the US.
  • Confidence over M&A volumes is high in the US, but more guarded in the UK.
  • Technology sector deals continue to provide most of the volume in the corridor, with companies attempting to capture opportunities in ‘Big Data’ and growth in cloud-based services 
  • California, New York and London remain primary locations for transatlantic dealmakers, but US buyer interest in the UK regions outside London is growing.
  • Private equity share of deals versus corporates is falling.
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