Mergers and acquisitions of UK firms by foreign companies were worth £27.7 billion between April and June this year, reaching the highest point since the end of 2018, according to new figures from the Office for National Statistics (ONS).

The data showed that the value of M&A activity by foreign companies more than doubled compared to £8.3 billion in the first quarter as the economy begins its post-pandemic recovery.

The news comes as a bidding war is expected heat up for UK supermarket chain Morrisons, which is currently reviewing an offer to sell to US private equity house Clayton, Dubilier & Rice (CD&R) for £7bn.

The ONS data reflected a total of 258 cross-border deals in the second quarter of 2021, including a £7.2 billion takeover, agreed last November of insurer RSA by Canada’s Intact Financial Corporation and Tryg, a Scandinavian insurance firm.

The value of domestic M&A (UK companies acquiring other UK companies) was £10.6 billion in Quarter 2 2021, an increase of £6.1 billion on the value recorded in the previous quarter (£4.5 billion).

Meanwhile, outward M&A (UK companies acquiring foreign companies abroad) was valued at £6.0 billion in Quarter 2 2021, £4.3 billion higher than the previous quarter (£1.7 billion).
The data also showed that in April 2021 there was a sizeable decrease in transaction volume compared with March 2021 (246 to 127). This level continued to June 2021, which had a total of 131 completed transactions.

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