Pepsico’s Pipers deal adds to record year for US acquisitions of UK firms

Pepsico swooped on premium British crisp brand Pipers today adding to a bumper year for US acquisitions of UK firms, with deals already hitting a record $87bn (£66.4bn).

The value of acquisitions has surged by a whopping $57bn since last year, according to figures compiled by Dealogic.

The record figure does not include the undisclosed value of the Pepsico deal, which is believed to be worth more than £20m.

Comcast’s takeover of Sky is the biggest deal in 2018 so far and on record at nearly $40bn, followed by CME Group’s $5bn acquisition of Nex Group.

Analysts said the weaker pound could have influenced the US conglomerate’s decision to snap up the Lincolnshire-based brand.

AJ Bell senior analyst Russ Mould told City A.M.: “Although sterling has rebounded from its year low of around $1.27 against the dollar, it still trades way below the $1.48 mark it held just before the 2016 EU referendum.

“That fall makes British assets and companies cheaper for overseas buyers, and in the context of the bid for Sky from America’s Comcast you would expect to see more approaches for UK-based firms if the pound stays weak, especially if they have global reach as Pipers does now.”

CMC Markets' David Madden said that despite Brexit uncertainty the UK economy is performing comparatively well to most of Europe.

“All of a sudden it becomes more attractive to invest in the UK,” Madden said. “The overall feel good factor is there [in the US], if you’re going to invest in Europe then the UK is one of the best performing economies apart from Germany.”

The UK is also attractive to companies looking to diversify cheaply, analysts said.

EY partner Scott McCubbin commented: “US businesses are looking for cheap assets in the UK. It is a very lucrative market.”

Lincolnshire-based brand Pipers was founded by farmers Alex Albone, Simon Herring and James Sweeting in 2004 and now exports products across the world.

Ian Ellington, general manager of Pepsico UK, said: "Pipers share our uncompromising commitment to delivering on taste and quality and we’ve long-admired their entrepreneurial spirit. The Pipers' brand has a strong proposition within the market, with stand-out taste, flavours and appeal."