UK Manufacturing Sector Continues to Attract Overseas Investors According To Latest M&A Analysis

Analysis by law firm Irwin Mitchell into the latest trends in manufacturing mergers and acquisitions (M&A) reveals that the UK continues to attract significant interest from overseas investors, despite a decrease in cross-border deals initiated by UK-based manufacturers.

Irwin Mitchell's Corporate Team, which is currently advising South African-based, French, and US businesses on three large transactions within the UK's manufacturing sector, utilised data from Experian's Market IQ database to provide insights into the industry's M&A landscape.

The analysis reveals that foreign interest in UK manufacturing businesses has remained strong, despite a decrease in the number of completed overseas deals initiated by UK-based manufacturing firms.

Notably, 8% (43) of deals involving UK-based targets were completed by US bidders, highlighting a consistent level of interest compared to 8.5% (57) in the previous period and 7.4% (51) in the first half of 2022.

In contrast, in the first half of 2023, the number of completed overseas deals initiated by UK manufacturers fell to 107, compared to 140 in the second half of 2022 and 194 in the first half of 2022. 

Expert Opinion

"While there has been a decrease in cross-border manufacturing M&A deals initiated by UK-based manufacturers, it is encouraging to see that interest from overseas in UK businesses has remained steady. This reflects the ongoing appeal of the sector to international investors and their recognition of the value in acquiring UK-based ventures.

"At Irwin Mitchell, we are currently advising South African-based, French, and US businesses on three significant transactions within the UK's manufacturing sector. This demonstrates the continued interest and confidence from overseas investors in the UK market."
Emma Callow, Corporate Partner at Irwin Mitchell.

Other key findings:

• In the first half of 2023, there were 529 deals involving manufacturing businesses based in the UK.
• Out of the total, 460 deals were centred in England, with 26 in Scotland and 25 in Wales.
• Acquisitions represented 55.4% of the transactions in the first half of 2023, with 293 deals falling into this category.
• Development capital deals accounted for 21.5% of the total, and investor buy-ins made up 4.9% of the transactions.
• UK manufacturing businesses completed 318 deals as the bidder during the same period.
• In the second half of 2022, there were 670 deals where UK manufacturing businesses were the target.
• Acquisitions constituted 55% of these deals, followed by development capital deals at 22%.
• There were 684 deals involving UK-based manufacturer businesses.
• Almost 400 deals were acquisitions, followed by development capital deals at 21.3%.
• Management buyouts constituted 4.5% of the deals.

Irwin Mitchell recently published its latest report examining foreign direct investment into the UK. The report can be downloaded from here.