Merger and acquisition values shot to £86bn last quarter in “sizeable” rise

The value of successful domestic and cross-border mergers and acquisitions (M&A) showed a “sizeable” increase in the third quarter of 2017, according to official figures.

There were a total of 163 acquisitions and disposals involving UK companies worth £86.4bn in the quarter from July to September, compared with 241 transactions worth £33.2bn in the quarter from April to June, the Office for National Statistics said.

The main driver for the overall rising value of M&A activity was UK companies acquiring foreign companies abroad, with 33 buyouts totalling £51.1bn, the highest quarterly value reported since the second quarter of 2000.

This was mainly due to British American Tobacco’s £49bn takeover of Reynolds in the US.

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The number of foreign companies acquiring UK companies fell slightly to 52, but the overall value rose to £16.8bn from £3.9bn the previous quarter, while the number of inward disposals reached a record high of £7.1bn, up from £4bn the previous quarter.

Notable inward acquisitions included Patron Capital’s purchase of Punch Taverns for £403m and Post Holdings’ acquisition of Weetabix for $1.76bn.

There were 58 domestic acquisitions completed in the period worth £5.6bn compared with 111 acquisitions worth £4.7bn report in the previous quarter.

The rise in value was mainly the result of Standard Life’s acquisition of Aberdeen Asset Management.

The total aggregated value and number of domestic M&A which were successful from January to September was down compared with the previous year, however, with 268 worth £13.5bn so far in 2017 and 338 worth £22.3bn in 2016.

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