Cross-border M&A activity gets lift from handful of big deals

Ben Southwood
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THE VALUE of cross-border mergers and acquisitions (M&A) activity jumped in the third quarter, despite a plunge in the number of deals.

The total value of all M&A involving UK-based firms climbed from £9.8bn in the second quarter to £16.9bn in the third quarter of 2012, the Office for National Statistics (ONS) revealed yesterday, also above the level seen in the same period of last year, which was £13.4bn.

But the total number of deals plummeted from 178 in the second quarter, to just 87 in the third – and the third quarter last year saw some 242 deals.

Of the 87 seen last quarter, some 47 were wholly domestic, but these were only worth around £500m taken together, the lowest figures since the third quarter of 1992.

The ONS said the Bank of England’s trends in lending report suggested firms “may still be adopting defensive strategies in the face of economic uncertainty,” as UK growth threatens to go back into the red once again.

UK companies made just big nine acquisitions abroad in the quarter, but these totalled £7.8bn, making the quarter the fourth most active in the last eighteen quarters since the UK dived into recession. To explain this exceptionally high average deal value the ONS pointed to Anglo American’s acquisitions of De Beers and DB Investments, as well as GlaxoSmithKline’s deal with Human Genome Sciences.