Sales of UK companies to other British companies were the highest in a decade in 2018, the strongest year for M&A since the financial crash in 2008.
According to the Office of National Statistics (ONS) the value of UK mergers and acquisitions was £26.5bn, and the number of domestic deals reached 842, the highest since 869 transactions were achieved in 2007.
The weaker pound has made UK assets more attractive to overseas buyers and foreign firms shelled out £71.1bn on UK companies in 2018, twice the £35.2bn the previous year. Conversely, the value of UK companies buying firms abroad fell to £22.7bn last year, down from £77.5bn in 2017.
Strong demands for deals from private equity firms underpinned M&A activity with private equity houses under pressure to deploy their “dry powder” and this has meant that it is a good time for UK firms to seek investment or an exit.
Looking at the trend for deals in 2019, the Bishopsgate team entered the year with their highest level of Work-in-Progress although they have several projects “on hold” waiting for the Brexit cloud to lift. Q1 and Q2 of 2019 is likely to be more subdued for deal making with a bounce in the second half of the year assuming our politicians can sort themselves out.