M&A quarterly transactions down as investors nervy amid war in Ukraine
The number of merger and acquisition transactions in the UK has plunged in the first quarter of the year, versus the end of last year.
According to fresh figures published by the Office for National Statistics, there were some 370 completed M&A deals in the first quarter of the year.
This was a significant drop on the 199 deals clinched in the last quarter of last year, when some 570 transactions were completed.
There were 138 deals in January, 113 in February and 120 in March.
It was also 239 fewer than the 610 inked in the first quarter of 2021.
Foreign firms’ takeovers of UK companies totalled around £11.2bn in the first quarter, a drop of some £51.bn compared to the previous quarter.
There were 145 inward M&A deals in the first quarter, a decrease of 51 transactions on the previous quarter and 76 fewer than the first quarter of last year.
Takeovers that completed in the period include US construction engineering firm API’s purchase of Chubb and the US ICU Medical’s takeover of Smiths Medical.
There were some 159 domestic acquisitions, involving a change in majority share ownership, in the first quarter. This was 144 fewer than the prior quarter.
Big name deals in the period included construction giant Berkeley Group’s acquisition of St William Homes, with the value of domestic M&As totalling £4bn in the quarter.
According to the Bank of England’s Agents’ summary of business conditions report for the first quarter of 2022, “investment intentions improved across a range of sectors in response to increased demand, and as companies restarted projects that had been paused during the pandemic.”
However, experts suggested that “the Russia-Ukraine conflict would weigh on sentiment and could lead to investment decisions being delayed”.
It comes as overseas private equity firms have shown considerable interest in the UK as it recovers from the Covid pandemic, with many UK names representing a relatively cheap deal.
Big names to have seen private equity interest in recent months include Ted Baker, the high street retailer which is hoping to be sold in a public to private deal.
Investment firms have also been circling the UK chemist Boots as its US owner Walgreens Boots Alliance hopes to sell the high street chain for a £7bn price tag.
German asset manager DWS Infrastructure swooped in to snap up coach operator Stagecoach, poaching the firm from its rival National Express last month.
London-listed Mexican fast-food operator Tortilla also dished out £2.75m to poach rival Chilango from investment firm RD Capital Partners last month.