Royal Mail takeover and Carlsberg’s swoop on Britvic in year of mega deals

From mobile phone mega mergers to foreign takeovers of historic British institutions, 2024 has seen a raft of mammoth deals in the corporate sector.

As the value of UK stocks have tumbled, UK equities have been firmly in the crosshair of foreign suitors and private equity buyout specialists.

In the third quarter of 2024 alone, foreign firms spent £7.8 billion buying up UK businesses, up 16% on the previous three months, according to the most recent official figures.

The year saw Czech billionaire Daniel Kretinsky swoop in with an audacious bid to buy Royal Mail owner International Distribution Services in what is set to see the more than 500-year-old postal service fall into foreign ownership for the first time.

And 18 months after first being announced, the £15 billion merger between Vodafone and Three UK was eventually given the green light by the Competition and Markets Authority (CMA) in December, paving the way for a tie up of two of the sector’s biggest players.

Investment bank Peel Hunt said one in 20 of all UK-listed companies were put under offer publicly in 2024, but said 2025 would see a “major and sustained” deluge of swoops on UK stocks.

It predicts that up to a third of small and mid-cap firms listed on London’s junior Aim market are “vulnerable to acquisition” in 2025, thanks in part to depressed valuations.

Here we look at some of the 2024’s most memorable UK takeovers and tie-ups:

– Royal Mail – £3.6 billion, May

Daniel Kretinsky’s £3.57 billion takeover bid for Royal Mail owner International Distribution Services (IDS) was arguably the year’s most controversial deal announcement.

It raised more than a few eyebrows, in light of the intense political and public scrutiny the deal would face, given the importance of Royal Mail and the postal service in the UK and its past struggles with trade unions.

Mr Kretinsky’s EP Group managed to secure government clearance in December after making a number of commitments to protect Royal Mail’s universal postal service obligations and assurances to trade unions.

This included giving the Government a “golden share” in the postal service, meaning it will need to approve any key changes to Royal Mail’s ownership, headquarters location and tax residency.

The deal came at a crucial time for Royal Mail, which had just put forward plans to regulator Ofcom to scrap second-class letter deliveries on Saturdays and cut the service to every other week day as part of turnaround efforts.

The company had already undergone a major overhaul which saw it axe thousands of jobs since 2022, but it warned that more needed to be done and the deal was seen as a timely solution.

Known as the “Czech Sphinx”, Mr Kretinsky already has a raft of investments, including stakes in London football club West Ham United and supermarket giant Sainsbury’s, and already owns a 27% stake in IDS.

– Darktrace – £4.4 billion, April

One of the year’s biggest blockbuster deals was the takeover of cybersecurity firm Darktrace after it was snapped up by US private equity group Thoma Bravo for almost 5.3 billion US dollars (£4.4 billion).

A prominent company in the UK tech landscape, Darktrace left the FTSE 100 on October 1 as the deal saw yet another blue chip stock disappear from the London market.

Thoma Bravo – a software-focused investor – had previously approached Darktrace about a possible acquisition in 2022, but talks at the time did not result in an offer.

It came as a particular blow for the UK tech sector after chip maker Arm was bought by Japanese tech investor SoftBank for nearly £27 billion in 2016, with Arm then choosing New York over London for its blockbuster 55 billion US dollar (£43.1 billion) flotation last year.

Founded in 2013, Cambridge-based Darktrace is best known for using artificial intelligence to scan for hacks and data leaks inside IT networks.

The group was co-founded in 2013 by former chief executive Poppy Gustafsson and the late Autonomy founder Mike Lynch.

Mr Lynch, and his daughter Hannah, were among seven people to die after the Bayesian superyacht sank off the coast of Sicily in August.

– Britvic – £3.3 billion, July

Robinsons squash maker Britvic finally succumbed to the takeover advances of Danish brewing giant Carlsberg when it agreed to a £3.3 billion deal in the summer.

The UK soft drinks firm, which also makes J2O and Tango, had rebuffed a previous £3.1 billion approach before agreeing to the buyout.

On announcing the deal, Carlsberg also said it would buy out Wolverhampton-based Marston’s from the joint venture brewing business run by the two firms for £206 million.

The CMA cleared the deal in December after a brief initial probe, smoothing the path for it to complete on January 16.

Carlsberg – which also owns brands including 1664 and and Brooklyn – said it believes the integration with Britvic can secure it £100 million in cost efficiencies a year.

Britvic, which is based in Hemel Hempstead, Hertfordshire, employs around 4,500 people.

– Virgin Money –  £2.9 billion, March

While foreign buyers were picking off UK stocks in an opportunistic spree, there were also some big domestic deals, with Nationwide Building Society’s £2.9 billion takeover of Virgin Money marking Britain’s biggest banking merger since the financial crisis.

Announced in March and completed seven months later, the deal brought together two of Britain’s largest banking groups, creating a lender with around 24.5 million customers, more than 25,000 staff and nearly 700 branches.

It will eventually see the Virgin Money brand disappear from UK high streets, but it will not happen automatically and the process of combining two of the country’s largest lenders is expected to take several years.

The bank was founded by billionaire businessman Sir Richard Branson in 1995.

Sir Richard’s Virgin Group was thought to be in line to net more than £400 million from the sale, as he still had a 14.5% stake in the bank.

The deal was one of a number in 2024 to reshape the UK banking landscape, followed soon after by Coventry Building Society’s £780 million deal to take over the Co-operative Bank.

The tie-up, announced in May and set to complete in January 2025, will create a combined group with millions of customers and about £89 billion worth of assets.