British dealmakers considerably increase their activity overseas

Joseph Millis
WHILE deal making in Britain has seen a small increase in activity this year, domestic dealmakers acquiring assets overseas have increased considerably, according to data analysis by EY released today.

The acquisitions have been driven by corporates ­ across a few sectors ­ keen to reposition their business models in a low-growth world.

The volume of deals in 2014 was up 5.3 per cent to 2,726 when compared with last year. However, overseas deals completed by UK companies saw a 16 per cent increase over the same period, from 641 to 766, with values increasing by nearly 60 per cent from $44.5bn (£28.3bn) to $105.5bn, catapulting Britain to second most active overseas acquirer ahead of Germany, Japan and China, and second only to the US.

The cumulative value of all deals completed over 2014 has also risen by nearly 70 per cent to $260.7bn, driven primarily by consumer products and retail, life sciences, property and telecommunications sectors.

Mark Gregory, EY’s chief economist and transaction partner, said: “Confidence in the economy is certainly ahead of action and this is demonstrated by the low levels of M&A this year. Globally, across all markets and sectors there are risks and potential shocks that have dented corporate confidence.”

He added: “Telcos have been acquiring assets to grow their revenues globally and to steal a march in the race for technology convergence. Those in life sciences have taken advantage of the benefits offered by tax inversions and many deals have been driven by the need to find the next blockbuster drug. And consumer products have been repositioning their business models in the face of lower growth in more mature markets, with investments in new products and higher growth new markets.”