Takeovers of UK firms soar to highest point since 2018
7 September 2021, 10:54
Big acquisitions of G4S and RSA led a takeover boom in the second quarter of this year.
Takeovers of UK companies by new foreign owners spiked between April and June, led by increased interest from North America.
Inward mergers and acquisitions (M&A) – which means foreign companies buying UK firms – increased from £8.3 billion in the first quarter of 2021 to £27.7 billion in the second.
Data from the Office for National Statistics (ONS) shows that inward M&A reached its highest point since the last three months of 2018 – when Comcast’s £30 billion takeover of Sky pushed the quarter’s total to to £33.3 billion.
After reaching a peak of 246 in March 2021, the total number of mergers and acquisitions (M&A) deals fell considerably in April 2021 and has continued around that level, reaching 131 in June 2021 https://t.co/4UAXwdoe4M pic.twitter.com/WXmw8Lnd7X
— Office for National Statistics (ONS) (@ONS) September 7, 2021
By comparison, inward M&A reached just £35.3 billion in the whole of 2017, which was higher than at any point between 2011 and 2015.
Between April and June this year there were two big deals, both run in part out of North America.
Intact Financial Corporation of Canada teamed up with Scandinavian insurer Tryg to buy London’s RSA for £7.2 billion.
And in April, US company Allied Universal beat Canada’s GardaWorld in the race to buy London-listed security company G4S for £3.8 billion.
Outward M&A was valued at £6.0 billion in April to June 2021, £4.3 billion higher than in the previous three months, when it was £1.7 billion https://t.co/zqshcyTj2N pic.twitter.com/B0ssNbgwt4
— Office for National Statistics (ONS) (@ONS) September 7, 2021
But a series of more recent deals, some of which have been agreed but have yet to complete, and others that are still in the bidding process, are not included in this data.
This includes the potential £7 billion sale of Morrisons to a US private equity company, and the controversial £1 billion deal for cigarette giant Philip Morris to buy inhaler-maker Vectura.
Bids are also in for two defence contractors – Ultra Electronics has agreed to be bought for £2.6 billion, while Meggitt has received a bid for around £7 billion.
John Laing has accepted a £2 billion offer from US private equity companies, while CVC has agreed a £767 million takeover of Stock Spirits.
The value of domestic M&A was £10.6 billion in April to June 2021, up £6.1 billion on the previous quarter’s figure, which was £4.5 billion https://t.co/nbvmUVQgN9 pic.twitter.com/WcZ0zWTlI3
— Office for National Statistics (ONS) (@ONS) September 7, 2021
According to data from Refinitiv, buyout companies across the world have been heavily targeting UK firms, putting around 10% of their total spend here over the first six months of the year.
According to the ONS data, outward M&A – UK companies buying foreign firms – reached £6 billion in the second quarter, up from £1.7 billion the quarter before.
Domestic M&A – UK firms buying other UK firms – hit £10.6 billion, up from £4.5 billion.
