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UK mergers and acquisitions

View profile for Tim Field
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The Office for National Statistics (ONS) has released its latest figures relating to mergers and acquisitions involving UK Companies for Q2 (April to June 2018).

The figures produced by the ONS only looks at those transactions with a value greater than £1m, and divides the data in to 3 sub-sets. Domestic transactions, where one UK based company takes over another UK based company; Outward, whereby one UK based company gains control of a non UK based company; and Inward, where a non UK based company takes control of a UK based company.

The general trend across all three sub sets was a significant decrease in the value of mergers and acquisitions for Q2.

The value of domestic transactions was £2 billion lower than the previous quarter, and represented the first quarterly decline since Q4 of 2016. Outward deals fell to £1.9 billion, their lowest level since Q4 2016 and domestic deals fell from £22.3 billion in Q1 to £6.5 billion.

Whilst statistics can tell a variety of different stories, there does seem to be an overall trend showing a decline in merger and acquisitions involving UK companies. Is this due to uncertainty over Brexit, a slow down in the economy, political uncertainty or other concerns? At present it is too early to say, and judging by Coca Cola’s intention to purchase Costa Coffee from Whitbread for £3.9 billion, this may simply be a blip and figures will perk up again in Q3.

A slow down in mergers and acquisitions may, however, present an opportunity for businesses to grow as better deals and more opportunities present themselves with more commercial value. Mergers and acquisitions can present a great opportunity for a business to grow, either by entering a new sector or through swallowing up a competitor or complementary business.

If you would like to discuss growing your business, please do not hesitate to contact me on 01206 217366 or you can email me at tim.field@birkettlong.co.uk

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