May 30, 2018

Cross-Border: UK Inbound M&A is Stabilizing

The UK’s decision to exit the EU put a damper on inbound M&A activity – with the dollar value of inbound deals declining from its 2015 peak of $341 billion to only $91 billion last year.  However, this P.J. Solomon report says that the inbound M&A market in the UK appears to be stabilizing.  This excerpt highlights this year’s activity:

– 2018 year-to-date UK inbound M&A has increased $170B compared to last year. Even excluding the 3 largest announced transactions YTD (Shire’s $81B bid for Takeda, Comcast’s $41B bid for Sky and Disney/Fox’s competing $37B bid forSky), UK inbound transaction volumes are still up $29.7B or 32.2% relative to last year.

– Foreign investment into the UK is being driven by greater comfort around Brexit and continued strength of global currencies relative to the British Pound (even despite the Pound’s recent run up)

– Overall, inbound M&A dollar volume has increased to 70% of all UK cross-border transactions, up from 57% in 2016. U.S. and Japanese companies have been the top bidders for UK targets in 2018, at $91B and $82B, respectively.

The report also covers other trends in global cross-border M&A, and provides a variety of data on YTD 2018 U.S. outbound & inbound activity.

John Jenkins