The value of completed merger and acquisitions in the first quarter of the year rose to its highest level since the financial crisis, figures from the Office for National Statistics reveal.
According to the figures the value of takeovers of UK companies by foreign firms rose to £49.4bn between January and March 2016, the highest level since the second quarter of 2007 when the value of deals reached £51.5bn.
Meanwhile the value of domestic transactions reached £11.6bn, the highest level since the last quarter of 2008.
Shell’s acquisition of the BG Group made up the vast majority of the value of foreign investment in the UK, while BT’s acquisition of EE made up most of the value of domestic transactions.
Patrick Sarch, a corporate partner at magic circle firm Clifford Chance, told the Gazette that the figures reflect the level of activity at the end of last year when several large strategic deals were agreed but which have only just cleared the competition and regulatory processes.
But he added: ‘There is no doubt that the volume and value of new M&A deals in the UK fell off markedly in the last few months as concerns regarding a possible Brexit, macroeconomic data and equity market volatility have all motivated M&A decision-makers to wait and see how the conditions shape up.’
However he said that there were signs that activity could pick up later this year, after the outcome of the EU referendum is known and temporarily shelved deals come back on.
The ONS figures also show that overall there were 114 domestic and cross-border acquisitions and mergers involving the UK in the first quarter of this year. The number of completed domestic acquisitions was 57.
The office said that despite quarter-on-quarter volatility, ‘the total number of mergers and acquisitions involving UK companies remains at a historically low level of activitiy'.