UK M&A deal values fall amid market uncertainty
21 March 2016
Foreign buyers have spent US $24.4 billion on acquiring British companies so far this year (1 January to 8 March 2016), down by nearly a third on the $34.9 billion of inbound deals recorded during the same period last year.
Meanwhile domestic M&A deal values in UK have halved from $12.6 billion to $6.1 billion this year. Outbound M&A by UK companies have also plummeted from $6.1 billion to $1.7 billion. This pattern is reflected by decreases in deal volumes, with 141 inbound deals (down on the 174 last year), 183 domestic deals (down from 304 last year) and 119 outbound deals so far (168 last year).
Iain Macmillan, head of global M&A at Deloitte, commented: “Interest from overseas buyers in UK businesses remains. However, market volatility, the weakening of the pound and the upcoming European referendum are causing a major pause in domestic and outbound dealmaking.”
So far this year, European buyers have led inbound activity in the UK, recording $15 billion of deals, treble the $4.9 billion during the same period last year. North American buyers managed $5.6 billion worth of deals this year, down on the $8.3 billion for last year. Overall, 2015 was a stellar year for inbound M&A activity, when the value of deals more than trebled from $90 billion in 2014, to $328 billion in 2015.
Iain Macmillan concluded: “2015 saw the highest inbound M&A deal values this century, with UK assets acting as an attractive proposition, especially listed companies with a solid portfolio globally. This year it should be expected that high levels of uncertainty, both market and political, would cause a temporary pause in the M&A markets. For now, European buyers are still investing heavily in UK companies, but whether we return to the previous levels of M&A remains to be seen.”
Data are based on deal volumes and values in Thomson One Banker and Deloitte analysis, run on 8 March 2016. Note, deal value calculations are based on M&A deals for which value is disclosed – deal values are not disclosed for a significant proportion of M&A deals.
Notes to editors
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
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