UK firms hit three year low for overseas M&A

Michael Bow
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BRITAIN is close to losing its crown as the second largest buyer of foreign companies in the world amid plunging overseas volumes for UK firms, figures out yesterday show.

Mergers and acquisition deals involving a British firm buying an overseas company fell 35 per cent to 63 in the first three quarters of this year – a three year low. Japan is closing in on the UK’s position after boosting its overseas deal volumes from 49 last year to 59 over the first three quarters of the 2012. The US has retained its top spot despite a reduction in deal volumes from 179 to 158 over the year.

The figures, compiled by City law firm Allen & Overy, show the UK remained the second most popular country for foreign buyers. Overseas acquirers closed 74 deals to buy UK firms, well ahead of the third most popular territory of Canada, which had 43 deals.

Richard Browne, managing partner of Allen & Overy’s UK corporate practice, said: “Given the impact of the Eurozone crisis and general state of equity markets it’s little surprise that UK businesses are shying away from pursuing opportunities abroad.”

Globally, Germany was the only country to increase acquisitions while interest from overseas buyers in snapping up Chinese firms fell dramatically, with inbound deal volume down from 47 to 24.

The US remained top place for foreign firms to buy, with 105 deals.