Foreign M&A interest in UK dies down after post-Brexit hype, but UK bolsters activity abroad

Lucy White
But US investment in UK tech was on the rise (Source: Getty)

Interest in UK companies from foreign buyers died down last year from its post-Brexit surge, while the UK boosted its spending abroad.

According to data from the Office for National Statistics, inward mergers and acquisitions (M&A) to the UK fell massively by value from £190bn to £35.3bn.

But the combined total of UK-led deals involving foreign targets jumped to a 17-year high of £76.6bn.

Read more: British firms set for M&A buying spree on scale not seen for a decade

“The UK has further reinforced its position as the M&A capital of Europe,” said Jeremy Furniss of corporate finance advisor Livingstone.

“We should take comfort from the fact that we clearly remain an attractive destination for international buyers, as well as having considerable investment clout in our own right.”

The boosted value of outbound deals was mainly due to two mega transactions – Reckitt Benckiser’s £13bn acquisition of Mead Johnson and British American Tobacco’s £38bn purchase of Reynolds American.

Read more: UK M&A deals tail off as post-Brexit vote reality causes sentiment to weaken

“2017 may have lacked standout [inbound] deals, but potential tie-ups such as Comcast and Sky this year could see UK M&A activity at record highs,” Furniss added.

Meanwhile in a separate study, tech investment bank GP Bullhound found that UK has strengthened its title as the US’s favourite European country for tech funding.

Between January 2015 and February 2018, the UK attracted 32 per cent of all US tech investments in Europe by number and 38 per cent by value.

Added to that, US investment in UK tech increased dramatically in 2017 with $22.8bn (£16.4bn) invested compared to $6.2bn a year prior.

In contrast, the amount of money from across the pond ploughed into both Germany and France fell. France nabbed $1.3bn and Germany $1.1bn.

Read more: A fintech M&A bonanza drove deal value to its highest level last year, as the UK led the way

Related articles