UK M&A slumps in first quarter as Brexit uncertainty lingers

The value of UK M&A has slumped this quarter as Brexit uncertainty lingers, however, tech deals have grown to the highest year-to-date level in at least 18 years.

A total of 27.4bn has been spent on UK assets so far this year, representing a 1.9 per cent decrease compared to the fourth quarter of 2018.

Read more: Business software M&A hits five-year high

UK outbound deal value has fallen 42.8 per cent to £13.6bn from £20.4bn in the previous quarter, according to data from Mergermarket. 

However, technology sector deals have increased, accounting for 16 per cent of deals in the UK so far, and have reached the highest year-to-date share since Mergermarket records began in 2001. 

Mergermarket Emea research editor Jonathan Klonowski said: “The need for companies to digitalise and automate is becoming increasingly apparent in order to stay ahead of competition.

“While the relentless uncertainty surrounding Brexit has undoubtedly resulted in alarm among boardrooms with many pausing investment decisions, the need for innovation remains high.”

Meanwhile, foreign investment has fallen 8.3 per cent compared to the previous quarter, falling to £20.2bn across 89 deals.

Read more: European M&A value hits six-year low driven by fall in UK deals

However, the largest deals have been conducted by foreign investors including Berry Plastics Group’s proposed £4.5bn takeover of RPC Group.

“The chaos in Westminster and lack of clarity over the future relationship between the UK and the EU has led to companies delaying investment decisions, causing a clear downturn in M&A in recent months,” Klonowski added.