UK deal making has had a strong start to the year as domestic and cross border activity accelerate, according to new data from EY.
The overall value of UK M&A reached levels similar to those last seen in Q1 2007, which remains the high watermark for deals activity. UK M&A hit $120bn and 681 deals, more than twice the overall value of transactions in Q4 2017 ($51bn, 586 deals.)
While domestic and outbound M&A saw significant increases in both value and volume compared to the previous quarter, it was inbound M&A that lead the way. Value for inbound transactions jumped from $11bn and 133 deals in the last quarter of 2017 to $67bn and 177 deals in Q1 this year.
At a sector level, telecommunications, automobile and healthcare topped the list of sectors with the highest transaction values, while computers and electronics together with professional services saw the most deals with 151 and 105 transactions respectively.
Ally Scott, EY’s head of corporate finance in Scotland, said: “It’s been a positive start to the year for the UK deals market with international investors continuing to find UK companies with an international presence attractive and UK businesses making international deals. Evidence of the attractiveness of Scottish businesses to international investors has built momentum in recent months and looks set to continue. Those with access to global markets and the knowledge of how to capitalise on M&A opportunities will be best placed for successful outcomes.
“The significant increase in inbound transactions is likely to lead to a new environment for M&A and deal makers. Some of these deals are likely to face increased scrutiny by regulators, Government and the public about their purpose, which will need to extend beyond cost savings. Articulating this narrative in a compelling way to ensure all stakeholders are onside will become increasingly key to help ensure deals are done.”