M&A deals at lowest since 2003

THE UK’s share of mergers and takeovers globally has slumped to the lowest on record as just five per cent of world deals now involve UK target companies, data from Dealogic yesterday showed.

Dealmaking in the UK this year has been worth only $116.3bn (£72.6bn), 14 per cent lower than in the same period in 2010 and the lowest M&A value since 2003.

Both deal size and frequency have fallen, with average deal size down 12 per cent on 2010 at $142m, the lowest since 2004.

Failed deals such as G4S’ aborted attempt to buy Danish group ISS for $5.2bn earlier this month will have reduced the M&A statistics for the year still further.

The low level of global deal share continues a downward trend seen since 2008 as the UK’s share has slipped for three consecutive years, the data provider warned.

It is losing share to both the US and China, with the Asian giant announcing 68 per cent more deals than the UK this year – the widest gap ever seen – as it continues to plough investment into foreign acquisitions.

The US has attracted $933.2bn of merger and takeover interest this year so far, while Chinese companies saw $155.2bn of foreign interest in buying its firms this year.

But over the past decade on average, the UK still outperforms China in M&A terms – it has seen almost 1.5 times the number of deals in 10 years than Asia’s biggest economy.

Among investment banks, Goldman Sachs is the leading UK adviser to M&A deals – it advised on $109.7bn of the total this year, Dealogic said. It is followed by JPMorgan, which advised on $70.1bn of deals and Barclays Capital on $61.3bn.