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UK and US M&A activity outpacing rest of Europe, Deloitte says

Apr 25
Tags: Deloitte
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New research from Deloitte shows UK and US M&A activity remained robust in 2018, while deals with Europe dropped. 

UK and US Merger and Acquisition volumes are outpacing the rest of Europe, according to analysis by Deloitte.

Last year, M&A deal volumes decreased by 11 per cent in the US, and six per cent in the UK. However, the rest of Europe saw a 20 per cent drop on 2017’s figure. Just 771 deals were recorded between the US and the rest of Europe in 2018, compared to 2017’s 974 deals. Meanwhile, 2018 saw 510 deals taking place between the US and the UK - a similar figure to previous years. 

Divergence between the UK and the rest of Europe continued in the first quarter of 2019. M&A values in Europe plummeted to a six-year low at $4.9 billion (£3.75 billion), according to figures from Refinitiv.

According to Deloitte, this trend is reflected in transatlantic M&A deal activity: the UK continues to be a strong choice for acquirers and sellers in the US. 

Paul Lupton, Deloitte partner in Advisory Corporate Finance, said: “The data suggests US investors appear to be shrugging off uncertainties around political decisions, still seeing UK businesses as an attractive opportunity. By contrast, the cooling of M&A activity in the rest of Europe has continued into the start of this year."

Mr Lupton explained how M&A in the UK has benefitted from cheaper sterling and an active private equity deal market. Further to this, he added, the US and UK have a language, culture and legal structures in common, enabling business models to be shared across these markets. 

In terms of industry, it was found that technology and media is fuelling transatlantic M&A, with more than one-third of acquired businesses falling into this category.

Furthermore, a similar pattern was observed in cross-Channel activity. UK acquisitions of European businesses dropped by 30 per cent in 2018, decreasing from 509 deals in 2017 to 356 last year. Yet UK businesses continued to attract European buyers: there were 244 of these deals in 2018, compared to 240 in 2017.

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