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Value of M&A Deals with US Companies Buying UK Businesses ‘Up by 115%’

  • Posted on: Wednesday 26th September, 2018

The value of merger and acquisition (M&A) deals involving UK businesses being bought by US companies increase by 115 per cent in the year 2017/18.

According to the latest figures on the subject, the value of such deals increased between 2016/17 and 2017/18 from a total of £36.8 billion to around £79 billion.

The assessment of the accounting and advisory firm Moore Stephens is that American companies effectively “shrugged off” any concerns they might have had about buying up UK businesses in the context of Brexit uncertainties.

However, those concerns are thought to have been a key reason why the scale of M&A deals involving inward investment into the UK from the European Union fell by around 5 per cent during the most recently assessed 12-month period.

Part of the appeal of UK companies for their US counterparts or rivals in recent quarters has been the low value of the pound, which means British enterprises can potentially be acquired at relatively low price points as far as overseas competitors are concerned.

Recent reforms to the US tax system, which some observers believed would deter outward investment, have not stopped American companies from buying up businesses in the UK on a very considerable scale.

America’s new tax rules effectively encourage US companies to bring more of their cash back to their domestic market and are designed to incentive inward investment.

High profile acquisition deals involving US and UK companies in recent months saw the music app Shazam snapped up by Apple for just under £300 million and the trading and investment software firm Fidessa bought by the Temenos Group AG for around £1.3 billion.

Meanwhile, the beverage industry behemoth Coca Cola announced plans to acquire the UK coffee chain Costa Coffee from Whitbread for in the region of £4 billion.

“Britain’s businesses continue to be some of the most attractive investment opportunities across the globe. It is a market too big to ignore,” said Damian Ryan, a partner from Moore Stephens.

“Whilst Brexit has created uncertainty, the underlying strength of UK businesses means that they continue to be great investment opportunities for overseas investors. US investors are the ones taking advantage of this right now.”


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