2004 record year for UK M&A deals

21 February 2005

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A report released by the Office of National Statistics and analysed by Grant Thornton corporate finance suggests that the UK has seen the highest number of M&A deals conducted by UK companies for 10 years, with a total of 694 acquisitions in 2004. According to David Brooks, head of M&A at Grant Thornton corporate finance, the statistics show that UK M&A activity continues to demonstrate strength and resilience both in terms of deal volumes and values. 'The general picture of UK M&A is a healthy one, where buyers are looking for good investments and will pay excellent prices for strategically important businesses. This is especially prevalent in the mid market.' During 2004, the number of acquisitions abroad by UK companies rose by 12.5% (from 243 in 2003 to 278 in 2004). The value of deals remained on a similar level (Â£20.3bn in 2004 compared to Â£20.8bn in 2003). These statistics reflect the trend for UK companies to make small considered deals with high volume but low values. With regards to transactions in the UK by foreign investors, a significant trend in 2004 was the strong upturn of interest in UK acquisitions by foreign investors, up by 25% on 2003 with values up by 69%. Interestingly, the US has been a key driver for deals in the UK, responsible for over 40% of the M&A transactions made in 2004. This has surprised many observers who had considered the weakness of the dollar as a key factor expected to reduce US M&A activity in the UK. David Brooks added: 'We have seen considerable activity from US companies in the UK market which shows a general confidence in the US economy and a sign that many are playing the long term game. Whether this trend continues will be something to look out for in 2005.'