UK takeover activity has reached its highest level since 2015, with total deal values rising more than 250% to around $150bn as overseas buyers capitalise on the relative cheapness of London-listed stocks, according to Bloomberg data.
British equities continue to trade at a discount to their European counterparts – the FTSE 100’s price-to-earnings multiple sits at roughly 13 times against 15.3 for the MSCI Europe index – attracting both strategic acquirers and private equity investors in search of value.
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The largest transaction of the year came in March, when Unilever agreed to sell its food business to US spice group McCormick & Co for $44.8bn.
The division includes brands such as Hellmann’s mayonnaise and Knorr stock cubes; its disposal leaves Unilever as a pure-play home and personal care company.
February brought two further substantial deals.
Asset manager Schroders agreed to be acquired by US investment firm Nuveen in a transaction valued at £9.9bn ($13.27bn), while French energy company Engie purchased UK Power Networks – the country’s largest power-distribution operator – for £10.5bn.
More recently, aerospace components maker Senior was sold to a consortium that includes buyout firm Blackstone and Tinicum.
The deal pipeline shows no immediate signs of thinning.
Product-testing group Intertek has indicated it is inclined to recommend an approach from Swedish private equity firm EQT, and ingredients manufacturer Tate & Lyle is the subject of a conditional proposal from US rival Ingredion.
The wave of activity has unfolded amid considerable political and economic turbulence. Prime Minister Keir Starmer is said to be facing dissent within his own party.
JPMorgan Chase chief executive Jamie Dimon last week warned that the bank may reconsider its plans for a new London office if the business environment deteriorates further.
Some advisers, however, argue that dealmakers have grown comfortable operating through periods of uncertainty.
US banks remain at the forefront of advisory work, with JPMorgan, Goldman Sachs and Morgan Stanley featuring prominently across the year’s biggest transactions.
Questions over London’s long-term standing as a capital markets centre persist. Just two IPOs have been priced in the UK this year, raising slightly under $600m – a continuation of a listing slump that stretches back to 2021.
