Billion pound deals including Vantiv Inc’s purchase of Worldpay Group and GVC Holding’s acquisition of Ladbrokes Coral helped drive a £18.2bn quarter-on-quarter leap in the value of UK firms being bought.
In the three months to March this year foreign firms’ investment in UK companies reached £21.7bn thanks to 75 transactions, up from 44 transactions worth £3.6bn in from October to December 2017.
Deals valued at more than £100m included South Africa’s FirstRand’s purchase of Aldermore Group, and the Dutch Refresco Group’s acquisition of Cott’s Bottling Activities.
Values for both inward and domestic mergers and acquisitions (M&A) from January to March were above all those recorded for individual quarters in 2017, according to the Office for National Statistics (ONS).
However, one exception was outward M&A activity, the ONS noted. This fell to the lowest quarterly value seen since the three months to September in 2013. This could suggest that political uncertainty has weighed on UK firms’ plans for international expansion and investment.
Sales of UK firms by foreign owners reached £6.9bn from January to March this year. The was highest level since records began in 1987. Just eight deals accounted for this figure suggesting it was driven by a few very large sales. The ONS said further details on the transactions had been “suppressed” in order “to mitigate disclosure”.
Appetites for advice on buying from prospective overseas buyers has been increasing, according to the UK’s central bank.
“UK-based professional services firms saw growth in demand for mergers and acquisitions (M&A) advice from overseas clients,” according to the Bank of England’s Agents’ May summary of business conditions.
Quarterly figures on M&A can be very volatile thanks to the timing of large deals being closed. However, activity in 2017 was “generally higher” when compared to historic averages from the period 2012 to 2016.