Slump in UK buyout deals

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THE FIRST half of 2009 was one of the worst periods in recent history for UK mergers & acquisitions (M&A) because the debt needed to fund the deals has dried up, according to research from Mergermarket.

The number of completed deals in the UK was down 66.4 per cent on the same period last year, with just 255 deals announced. The total value of the deals was just $31.5bn (£20bn), down 70.7 per cent on the first half of 2008.

The value of activity would have been even lower if it were not for the giant takeover of asset manager Barclays Global Investors by US rival BlackRock in a deal worth $13.6bn.

The UK government’s $7.7bn acquisition of a giant stake in stricken bank RBS, and its $5.6bn investment in Lloyds, also boosted the total.

Despite these giant transactions, the value of deals in the first half of 2009 was 81.3 per cent lower than in the second half of 2008.

The UK’s performance was particularly poor compared to the international picture. Globally, the number of deals done fell by 47 per cent compared to the first half of 2008, while the value of world the deals fell by 44 per cent.

The report added US giant Bank of America Merrill Lynch, which recently overtook Swiss rival UBS as the world’s biggest wealth manager, has now stormed to the top of the chart for advisers to UK M&A deals.