UK groups buy abroad amid slump

HOPES of a long-term recovery in Britain’s global buying power are boosted today with the publication of figures showing it has held on to its position as the second-most active nation in mergers and acquisitions.

British companies made $83.26bn (£52.82bn) of acquisitions overseas so far this year while foreign firms spent $64.35bn on buying British businesses, according to research from law firm Allen & Overy.

Only US firms carried out more M&A work abroad, according to the figures, which cover the first three quarters of the year.

The close transatlantic trading relationship was underlined by the fact that the US was the top target market for British companies, followed by India, Germany France and Canada.

Deals for companies in utilities, financial services and infrastructure led the expansion overseas.

One of the most high-profile deals came in June, when Pizza Express founder Hugh Osmond bought US temporary power provider APR.

Richard Browne, head of the UK corporate practice at Allen & Overy, said: “Given the relatively stagnant state of the UK economy, it’s not surprising that UK based companies are looking abroad for growth and that we remain a net acquirer of foreign assets.

“However, we’re unlikely to see a return to the frothy levels of M&A activity witnessed a few years back any time soon. Steady growth for the next few years would be welcome, but we’ll only see that once issues with the euro can be put to bed.”

The value of private equity deals is up 51 per cent so far this year, with the number of transactions up 14 per cent.