Tuesday 3 September 2019 12:35 pm

Brexit bargains: Foreign buyers snap up UK companies in M&A frenzy

The value of foreign takeover deals in the UK have jumped over the last quarter, nearly doubling on the previous three-month period after several notable mergers were inked in the City.

Read more: UK M&A deal values more than halve amid global tensions

Inward mergers and acquisitions, whereby an overseas company acquires a UK firm, rose in value to £18.4bn between April and June this year, climbing from £10.8bn when compared with the previous quarter.

Marsh & McLennan’s $5.6bn (£4.6bn) insurance deal to acquire Jardine Lloyd Thompson largely fueled the rise, according to today’s new findings from the Office for National Statistics (ONS).

Deals involving UK companies acquiring fellow domestic firms also jumped in value, rising from £1.8bn in the first quarter of 2019 to £2.8bn in the second quarter.

However, the value of outward M&A, in which a UK company takes over a foreign one, plunged from £6.1bn to £1.5bn quarter-on-quarter.

Some of the biggest inward M&A deals of Q2 2019Value of deal
1. Marsh & McLennan acquisition of Jardine Lloyd Thompson£4.6bn
2. Vinci acquisition of majority stake in Gatwick airport £2.9bn
3. Roper Technologies acquisition of Foundry £451m
4. Asahi acquisition of Fuller, Smith & Turner£250m
5. Entertainment One acquisition of Audio Network£178m

Read more: US and UK deals outpace Europe

“UK assets remain highly regarded by foreign bidders with the impact of Brexit on sterling helping to ensure that deals are relatively cheap. Many will see this period as the perfect time to snap up a bargain, not least private equity funds which are sitting on huge cash piles,” said Julian Stanier, a corporate finance partner at Pinsent Masons.

He added: “As interest in UK assets grows, the government’s lack of intervention into takeover bids for strategically important assets is prompting concern in certain quarters. Stricter regulation has made it easier for officials to intervene if a takeover is a threat to the UK’s national security but this power has remained largely under-utilised by the government. Many will be relieved that deal flow is not being stifled by protectionism.”