According to the latest release from the Office for National Statistics, mergers and acquisitions (M&A) activity involving UK companies experienced a decline in the first quarter of 2023. This follows a period of stability throughout 2022.
During the first quarter, there were a total of 141 transactions in January, 100 in February, and 115 in March, involving a change in majority share ownership. These figures are lower compared to the monthly averages of over 150 transactions seen in 2022.
Inward M&A, which refers to foreign companies acquiring UK companies, saw a total value of £12.7 billion in the first quarter of 2023. This represents an increase of £6.9 billion from the previous quarter but is £4.1 billion lower than the same period in 2022. One notable inward acquisition during this period was the acquisition of Homeserve Plc of the UK by Canada’s Brookfield Corporation.
On the other hand, outward M&A, where UK companies acquire foreign companies, experienced a decline in value. The total value of outward M&A in the first quarter of 2023 was £2.9 billion, a decrease of £7.2 billion compared to the previous quarter and £0.2 billion compared to the same period in 2022. An example of an outward M&A deal was the acquisition of Coca-Cola Beverages Vietnam Limited of Singapore by UK’s John Swire & Sons Ltd.
In terms of domestic M&A, which involves UK companies acquiring other UK companies, the value of transactions during the first quarter of 2023 was £1.8 billion. This is a decrease of £2.1 billion compared to the previous quarter and £2.6 billion compared to the same period in 2022.
It should be noted that the figures for January to March 2023 are provisional and subject to potential upward revisions until early 2024. The decline in M&A activity during this period may be attributed to various factors, including economic uncertainty and changing investment intentions.
Overall, the data suggests a slowdown in M&A activity involving UK companies in the first quarter of 2023, following a period of relative stability in 2022. Further monitoring and analysis will be necessary to understand the underlying trends and potential impacts on the UK business landscape.