UK merger activity off to slowest start in a decade


K dealmaking is off to its slowest start in a decade, as the value of mergers involving British companies plummeted in the first quarter.

The value of mergers and acquisitions that had any kind of UK involvement was down 60% year-on-year to $47.0 billion (£38.0 billion), according to Refinitiv.

The total was the lowest for a first quarter since 2013, and was only $500 million away from being the lowest since 2004. In addition, it was the lowest value for any quarter since 2016.

In total, there were 1,209 deals involving UK companies during the quarter: the lowest since 2017.

The sharpest fall was in UK firms being bought by foreign companies, with the value of these deals down 69% to $12.9 billion.

Global mergers and acquisitions fell too, but more slowly – down 46% to $559.7 billion.

For the first time since 2017, no UK companies were acquired in a “mega deal”, worth $5 billion or more.

The largest deal during Q1 was private equity group Apollo Global’s bid to acquire engineering firm John Wood Group for just over $4 billion.

Goldman Sachs held onto its place as the top M&A advisor, but JP Morgan rose from seventh to runner-up while Barclays fell from second to tenth.

Refinitiv head of EMEA deals intelligence Lucille Jones said the slow start was due to a combination of factors, with the war in Ukraine, questions about the banking sector and rising interest rates all playing a part.

“UK dealmaking saw the sixth consecutive quarterly decline in activity and its slowest start to the year in a decade, as a darkening economic outlook depressed activity,” she said. “Geopolitical tensions, volatile stock markets, interests rate hikes, and a banking crisis has shaken boardroom confidence already dented by fears of recession.

“While deal makers continue to face uncertain times, we are likely to continue to see a cautious approach to dealmaking.”

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