In the past few years, the UK has secured its status as one of the most robust countries on the globe in terms of its M&A activity. 2016 saw the UK marketplace prove its resilience through delivering the highest deal volumes since 2007 during a period of political and economic turbulence. Over 7,000 deals were completed across the UK in 2016, representing a significant increase on 2015’s outturn, according to Experian’s 2016 UK M&A Review.
During this time, the Greater London region has upheld its position as arguably the main driving force of the UK’s M&A success, and was ranked as the UK’s most active region in 2016 with 2,696 deals completed, according to Experian’s 2016 UK M&A Review. Collectively, these deals generated aggregated deal values of circa £144 billion, accounted for 38% of all UK transactions and represented more than 50% of all disclosed UK deal values in 2016.
Greater London’s M&A success has continued well into 2017, with deal volumes and values remaining as high as ever and excelling above all other regions. Experian’s most recent MarketIQ report stated that during the first quarter of 2017, Greater London played host to 543 deals, and generated combined deal values of over £30 billion. This figure represented an increase of 56% on the deal values witnessed during the same quarter of 2016. The report also noted that, impressively, London-based companies were involved in 40% of all UK deals during the first quarter, and that the region played host to seven mega deals, worth combined values of £14.3 billion.
According to Experian’s report, the financial services sector retained its 2016 status as London’s busiest industry for deal making, with 189 transactions announced during the first quarter of 2017 alone (representing over a third of all Q1 transactions in London). Other sectors that have performed well in London this year are infocomms, professional services, and the oil and gas sector, which experienced a 14% upturn in deal volume during Q1.
PwC’s UK Economic Outlook (published in November 2016) predicted that London would remain the fastest growing region in 2017, providing an excellent environment for high levels of M&A activity. Baker McKenzie also confirmed this, stating that “there will continue to be plenty of London based activity”.
KBS Corporate has certainly witnessed significant activity levels involving companies from Greater London. In recent years, we have experienced a strong buyer interest in companies within the region, due to its strong economic landscape and its status as the capital of the UK. Company deals database, Zephyr, reports that circa 60 deals involving London-based companies are rumoured to be in the pipeline, and as a result, we fully expect the future to be bright for M&A in Greater London.