US and UK M&A deals outpace Europe

Merger and acquisition (M&A) deals in the UK and US are outpacing the rest of Europe, with activity remaining strong despite a global downturn.

Deal volumes reduced by 20 per cent in Europe last year, but only dropped by six per cent in the UK and by 11 per cent in the US.

Read more: European investment banking fees plunge in bleak first quarter

The UK has also remained an attractive choice for US acquirers and sellers, as there were 510 deals between the two countries last year in line with the total number in 2017, despite the uncertainty caused by Brexit.

Paul Lupton, Deloitte partner in Advisory Corporate Finance, said: “The data suggests US investors appear to be shrugging off uncertainties around political decisions, still seeing UK businesses as an attractive opportunity.

“By contrast, the cooling of M&A activity in the rest of Europe has continued into the start of this year.

“The US and UK share a language, culture and legal structures, enabling business models to be shared across these markets.

“M&A in the UK has also benefited from cheaper sterling and an active private equity deal market. These conditions should prevail for the rest of the year.”

Read more: UK M&A slumps in first quarter as Brexit uncertainty lingers

However, there were only 771 deals between the US and the rest of Europe in 2018, representing a 20 per cent drop on the 974 deals the previous year, according to the latest research by Deloitte.

UK acquisitions of European businesses were down by 30 per cent last year, while UK firms continue to be targeted by European buyers, with 244 deals recorded last year compared to 240 in 2017.