Domestic M&A deal value reaches decade high in 2018 despite Brexit uncertainty

Domestic merger and acquisition (M&A) value hit a ten-year high in 2018 despite Brexit uncertainty, according to the latest data.

Acquisitions of UK companies by other UK firms rose from £18.8bn in 2017 to £26.5bn last year, the highest value since deals reached £36.5bn in 2008, research from the Office for National Statistics (ONS) found.

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The value of takeovers of UK companies by foreign firms last year was £71.1bn, compared to £35.2bn in 2017 driven by Comcast’s £30bn acquisition of Sky which accounted for more than two-fifths of inward acquisitions.

Outward M&A deal value – when a British company acquires a firm based outside of the UK – fell from £77.5bn in 2017 to £22.7bn last year as no “mega deals” were completed in 2018.

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Rob Donaldson, head of corporate finance at RSM, said: 'Despite all the Brexit uncertainty, the UK M&A market has had a pretty good year, driven in part by high domestic demand as well as continued interest from overseas buyers.

'Favourable exchange rates have made UK assets very attractive to overseas buyers. We have also seen sustained interest from the private equity market, keen to make decent returns in a low interest rate environment.”