Dealmaking in the UK has cratered to a 14-year low this year as rising interest rates and volatile prices scuppered a predicted wave of takeovers.
Mergers and acquisitions with any UK involvement came in at $176.1bn (£144.7bn), down 45 per cent on a sluggish 2022, according to LSEG Deals Intelligence.
The figures mark the worst period for deal makers since 2009 when markets were reeling from the fallout of the global financial crisis.
Rising interest rates have piled pain on the market by pushing up the cost of financing deals.
Volatile markets in the wake of war in Ukraine have also played havoc with price expectations.
Lucille Jones, senior manager at LSEG Deals Intelligence, said fears of a recession had also weighed on the appetite for deals.
“We are seeing double-digit percentage declines for both the domestic and cross-border deal categories, and declines have been recorded across all sectors,” she added.
The value of deals announced during the first quarter of the year fell to the lowest quarterly level since the end of 2009.
M&A increased 60 per cent in the second quarter of 2023 but fell 13 per cent between June and September.
However, a predicted wave of takeovers of UK firms has failed to materialise. Analysts were braced for London-listed companies to be picked off as buyers capitalised on cheap prices.
M&A involving a UK target has reached $93.7bn so far in 2023, just over half the value recorded during the same period in 2022 following a 48 per cent decline in domestic M&A and a 49 per cent drop in inbound deals.
The United Kingdom is the third most targeted country globally this year, after the United States and China.
Yet some bumper deals have been struck in the UK. The $6.1bn takeover offer for Dechra Pharmaceuticals by Swedish buyout group EQT is the largest deal involving the UK announced so far.