After a collapse in cross-border dealmaking in the first half of 2020 in the wake of the pandemic, foreign investment into the UK has risen considerably in recent months, according to the latest UK M&A data from Mergermarket.
Inbound M&A reached GBP58.7 billion (196 deals), over 3x higher than during the first quarter of 2020 (GBP18.6 billion). This also represents the highest quarterly inbound deal count since 3Q17 (200 deals).
Private equity buyouts in the UK grew to highest quarterly deal count on Mergermarket record in the first quarter of 2020, with sponsors spending a total of GBP20.5 billion across 132 deals. As a result, private equity firms have now spent at least GBP10 billion in six of the last eight quarters. After a significant decrease in the first half of last year, private equity exits have also increased considerably. There were 75 exits worth a combined GBP10 billion in 1Q21, the highest number of exits seen in a quarter in the UK on Mergermarket record.
As a result of the GBP14.2 billion tie-up between National Grid and Western Power Distribution, energy, mining and utilities was the most active sector by value at GBP20.7 billion across 28 deals. Investment in tech, meanwhile, continues to grow. The GBP20.4 billion deployed in the sector accounts for just over a quarter of UK dealmaking in 1Q21. Business services remains the most active sector by deal count, recording 100 deals (GBP2.3 billion) this year – up from 93 (GBP1.4 billion) in the equivalent period last year.
