Foreign buyers flock to UK as inbound M&A deal values highest for over a decade
9 July 2015
UK companies are attracting strong interest from overseas buyers, with inbound M&A deal values nearly trebling to (US) $145.7 billion for the first half of the year, and the highest figure for well over a decade, according to analysis from Deloitte. This is up by $96.1 billion over the first half of 2014, when inbound deal values stood at $49.5 billion. There has also been an increase of 11% for inbound deal volumes in the first half of 2015, compared to the first half of 2014.
Iain Macmillan, head of M&A at Deloitte, commented: “Overseas buyers are finding UK assets attractive and are confident about the economic recovery, with highly liquid debt markets. This is underlined by recent deals in the energy, TMT and consumer business sectors. While US companies remain the major inbound investor by volume, there has been a sharp pickup this year of inbound investments into UK from continental Europe.”
US companies continue to be active investors into the UK assisted by the strengthening of the US dollar. In the six quarters since the beginning of 2014, there has been a 23% increase in US inbound deal volumes into the UK, compared to the previous six quarters. Tracking activity the other way, UK outbound deal values to North America have nearly doubled from $8.9 billion to $14.8 billion.
Cahal Dowds, chairman Advisory Corporate Finance at Deloitte, added: “The US/UK M&A deal corridor remains one of the most important globally and we’ve seen strong buyer interest from US investors that don’t have existing European offices. They are drawn to robust businesses with predictable revenue streams, particularly where an element is dollar based. In the second half of this year, we anticipate continued growth of US investment into the UK and equally strong UK buyer activity in the North American markets. UK companies looking to deploy cash are identifying the US as a high growth market over Europe.”
Focussing on activity inside the UK, in the first half of 2015 outbound UK deal volumes decreased by 5% compared to the first half of 2014, while domestic deal volumes were also marginally down by at 2%.
Iain Macmillan concluded: “It seems the recent UK elections and the uncertainties surrounding Europe may have impacted confidence and any pick-up in deal momentum here. However, Deloitte’s CFO Survey suggests, the risk appetite remains high among CFOs, and 23% of CFOs identified expansion by acquisition as a corporate priority for the next 12 months.”
Note to editors
Cahal Dowds has just been appointed as head of a new Deloitte executive committee, charged with looking at all corporate finance activity across the US/UK corridor.
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
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The information contained in this press release is correct at the time of going to press.
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