£25.7bn in deals: Strongest M&A start of the year in two decades
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Deals involving a UK investment or acquisition target hit £25.7bn during the first six weeks of this year, more than three times the value recorded during the same period in 2020.
It also marks the highest opening six-week period for deal announcements of any year since 2000, according to new data from London Stock Exchange-owned financial research firm Refinitiv.
While domestic M&A reached a three-year high of £7.9bn, it was primarily a wave of inbound investment that drove deal making in the UK during the first six weeks of this year.
Boosted by deal announcements such as Jazz Pharmaceuticals’ £4.7bn offer for GW Pharmaceuticals, and a £4.1bn for Dialog Semiconductor by Japan’s Renesas Electronics, transactions involving a UK target and a foreign buyer reached £17.7bn, the highest first six-week total of all time.
“Record levels of activity continuing the recovery from last year. The outlook for the year looks positive with corporates having adjusted to the new normal and investing for future growth, particularly in the healthcare sector,” said Cornelia Andersson, head of M&A and capital raising at Refinitiv’s deals intelligence unit.
Deals involving buyers in the US account for 35 per cent of UK target M&A activity during the first six weeks of 2021, followed by the UK, at 31 per cent, and Japan (17 per cent). Healthcare is the most targeted sector, accounting for one-third of deals, by value.
Andersson pointed out that, by number of deals, the UK is the second most popular destination for cross-border investment globally so far during 2021, after the US.
“The UK will also continue to be an attractive market for international investors with cross border deals soaring to a record high,” she added.
The M&A frenzy follows a record run of inbound M&A activity over the last six months. According to Refinitiv, 810 deals with a combined value of £137bn were announced during the second half of 2020, an all-time half year record by both number and by value of deals.