Takeovers of British companies soar to highest rate since 2018

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British economy
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Takeovers of British companies by new foreign owners spiked between April and June, led by increased interest from North America.

Inward mergers and acquisitions (MA) – which means foreign companies buying British firms – increased from 8.3 billion pounds (11.5 billion dollars) in the first quarter of 2021 to 27.7 billion pounds in the second.

Data from the Office for National Statistics (ONS) shows that inward MA reached its highest point since the last three months of 2018 – when Comcast’s 30-billion-pound takeover of Sky pushed the quarter’s total to to 33.3 billion pounds.

By comparison, inward MA reached just 35.3 billion pounds in the whole of 2017, which was higher than at any point between 2011 and 2015.

Between April and June this year there were two big deals, both run in part out of North America.

Intact Financial Corporation of Canada teamed up with Scandinavian insurer Tryg to buy London’s RSA for 7.2 billion pounds. And in April, US company Allied Universal beat Canada’s GardaWorld in the race to buy London-listed security company G4S for 3.8 billion pounds.

But a series of more recent deals, some of which have been agreed but have yet to complete, and others that are still in the bidding process, are not included in this data.

This includes the potential 7-billion-pound sale of Morrisons to a US private equity company, and the controversial 1-billion-pound deal for cigarette giant Philip Morris to buy inhaler-maker Vectura.

Bids are also in for two defence contractors – Ultra Electronics has agreed to be bought for 2.6 billion pounds, while Meggitt has received a bid for around 7 billion pounds.

John Laing has accepted a 2-billion-pound offer from US private equity companies, while CVC has agreed a 767-million-pound takeover of Stock Spirits.

According to data from Refinitiv, buyout companies across the world have been heavily targeting British firms, putting around 10 per cent of their total spend there during the first six months of the year.

According to the ONS data, outward MA – British companies buying foreign firms – reached 6 billion pounds in the second quarter, up from 1.7 billion pounds the quarter before.

Domestic MA – British firms buying other British firms – hit 10.6 billion pounds, up from 4.5 billion pounds.

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