M&A deals tumble to ten-year low
The value of corporate finance deals in the UK continue to stagnate, with deals completed both home and abroad by UK companies falling to their lowest levels in a decade.
Link: Global M&A activity halves in 2003
In the second quarter, the average value of UK deals reached £3.3bn, just over half the £6.3bn recorded for the same period last year, and minuscule compared to the £26.7bn recorded in 2000.
UK investment abroad also fell sharply, with deals down 82% from £14.1bn in the first quarter of the year to just £2.5bn in the second quarter of the year. Last year investment abroad reached £6.7bn.
Only investments made by foreign businesses in UK companies grew in value, up by 70% to £2.1bn.
‘Whilst the figures don’t make good reading, there are a number of signs which add credit to the view that the market is slowly bottoming out and that improvements will be visible in the medium term,’ said Adrian Palmer, head of London mergers and acquisitions at Grant Thornton
‘UK businesses are at present much more appealing to foreign investors than in the recent past thanks to a stronger Euro and the resolution of many issues relating to global uncertainty that affected the appetite for deals over the past year. A stronger Euro adds value to UK companies in the eyes of European buyers whilst reducing the value of European businesses for UK acquirers,’ continued Palmer.
