Carillion fallout pushes UK M&A deals to all-time lows - but values have risen

Jessica Morris
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Carillion gave up trying to to buy Balfour Beatty (Source: Getty)

A dry summer for UK mergers and acquisitions, in which Carillion gave up its £2.1bn attempt to to buy Balfour Beatty, has helped to ensure volumes remained at historic lows.

The number of deals involving UK companies fell to 67 in the third quarter of 2014, according to figures from the Office of National Statistics released today.

Of those, 30 were UK companies being taken over by domestic firms; 17 were overseas businesses bought by UK companies, and 19 were foreign takeovers by UK businesses.

This represents a 26 per cent fall on the previous quarter - the number has halved since the same quarter last year.

Rob Cherry, Corporate Partner at law firm Blake Morgan said:

These statistics reinforce the anecdotal evidence that banks remain, by historical standards, extremely cautious about acquisition funding.

High value deals

The total value of domestic mergers and acquisitions was £5.8bn for the first three quarters of 2014. This has fallen 9 per cent, from £6.4bn during the same time period a year earlier.

However, if you look at the decrease in the number of acquisitions during the dame period, then the difference is much greater at 35 per cent. This suggests that while fewer deals are being completed, they are actually higher in value.

According to the Office of National Statistics:

This may indicate that although fewer domestic acquisitions completed between these periods, the transactions which did were of a higher monetary value

Let's hope Aviva, the multinational insurance company who agreed to buy Friends Life in a £5.6bn deal today, has better luck.

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