Foreign takeovers surge as buyers strike megadeals

The foreign takeover raid on UK companies accelerated this year as international buyers struck a series of mega deals to acquire listed companies.

In the ten months to the end of October, deals launched by foreign buyers with a UK target had jumped 55 per cent to $116bn (£91bn), with the number of deals increasing 24 per cent, according to research from Bain & Company.

Meanwhile, the number of UK companies buying foreign companies dropped by 10 per cent, while the value of those deals dropped by 24 per cent.

“Despite strong balance sheets and a strategic need for M&A in 2024, dealmakers didn’t see the positive momentum they hoped for on interest rates, seller willingness to exit, and regulatory scrutiny that would drive a full recovery this year,” said Suzanne Kumar, executive vice president of Bain & Company’s M&A and divestitures practice.

Four megadeals have driven up the value of UK takeovers: International Paper Co buying DS Smith (£5.8bn), Calsberg buying Britvic (£3.3bn), EP Group buying International Distributions Services (£3.6bn), and Iberdrola buying North West Electricity Networks (£4bn).

A total of 73 UK companies have been taken over by foreign companies, while 43 have been taken over by other UK companies. 34 foreign companies were taken over by British firms.

Total UK deal value had already surpassed 2023’s total by 83 per cent, which was the lowest year for mergers and acquisitions (M&A) since 2011.

The UK’s largest industries by deal value are also some of the fastest growing, with advanced manufacturing up 241 per cent, energy and natural resources up 18 per cent, and financial services up 15 per cent.

In total, global mergers and acquisition deals are set to hit $3.4 trillion (£2.7 trillion) in 2024, a 14 per cent jump from last year.