Cross Border Deal Volumes Lowest Since 2020 Lockdowns

The latest ONS M&A figures published today reveal an increasingly tough deals market with the number of transactions involving foreign companies acquiring UK companies falling to levels not seen since August 2020.

According to the ONS, the number of completed deals in March 2024 was lower than the number of deals in January 2024 and February 2024 for all three types of acquisitions. For inward (33) and outward (13) M&A, the numbers in March 2024 dropped to levels last seen in August 2020 (27 inward deals) and November 2020 (11 outward deals).

Leading international corporate lawyer at Irwin Mitchell, Bryan Bletso, expects deal activity to improve modestly in the second half of the year as economic confidence, fuelled by falling interest rates and low inflation, returns.

Expert Opinion

“Despite falling numbers in cross-border transactions both in and out of the UK, I remain optimistic about the rest of the year. The prospect of lower interest rates, coupled with falling inflation, should mean a welcome switch from survival to investment mode across many sectors of the economy.

“As the UK emerged from recession at the end of 2023 and the economy continues to grow, we would expect M&A activity to follow suit.”
Bryan Bletso, Corporate partner at Irwin Mitchell and Head of its International team,

Key findings from ONS are:

• During Q1 2024, the provisional combined number of domestic and cross-border M&A involving a change in majority share ownership was 426, 18 fewer transactions than in the previous quarter (444).

• Monthly estimated M&A saw a total of 174 domestic and cross-border acquisitions involving a change in majority share ownership during January 2024, before falling to 152 in February and declining further to 100 during March 2024.

• In Q1 2024, the total value of outward M&A (UK companies acquiring foreign companies) was £4.4 billion, £0.9 billion higher than the previous quarter (£3.5 billion).

• Domestic M&A (UK companies acquiring other UK companies) during Quarter 1 2024 were valued at £3.0 billion; this figure is similar to Quarter 4 (Oct to Dec) 2023 (£3.0 billion).

• The value of inward M&A (foreign companies acquiring UK companies) in Quarter 1 2024 was £6.1 billion, £4.0 billion lower than Quarter 4 2023 (£10.1 billion).