London Remains Hotspot For US Investment

There’s been an almost 20% fall in the number of overseas deals which target UK businesses in the first six months of the year - however according to analysis by Irwin Mitchell, the attractiveness of UK firms to US investors looking to complete M&A remains strong.

The law firm says that according to their analysis of Experian's Market IQ deal database, UK businesses were the target of 2,833 transactions* in H1 2023. Highlighting the strong allure of UK organisations in the global market, approximately 10% of these deals involved overseas investors or buyers.

Out of the overseas deals completed in the first half of 2023, 104 originated in the US, with London based businesses accounting for 38 of those transactions. The South East saw 12 deals whilst collectively the North West, the Midlands, the North East, the Midlands, and Scotland, accounted for less than 20.

The US-originated deals were primarily in manufacturing (16), management consultancy (5), software publishing and development (6), with retail and hotels each having one deal during the period.

According to Market IQ, there were 3,490 deals involving UK businesses as the target during the last six months of 2022. Of these, 353 involved overseas investors or buyers, accounting for approximately 10% of the total.

120 US-originated deals were recorded during this period - accounting for a third of the activity.

UK businesses were the subject of 3,722 deals in H1 2022 and of those 366 involved overseas buyers or investors. Out of these, 112 deals originated in the US, with London again accounting for the majority.

Bryan Bletso, Director of Strategic Growth (International) at Irwin Mitchell, commented:

"Our analysis showcases the continued appeal and resilience of UK businesses. We are still seeing interest from overseas companies looking to invest in the UK, and the numerous conversations we are having with organisations suggest that things will improve in the second half of the year.

“We are hopeful that these figures will not only rebound but also show a significant increase in the coming months."

Irwin Mitchell also compared the most recent six months to the same period 10 years ago and discovered a 12% decrease in the number of deals involving overseas investors. Out of the 255 deals overseas deals targeting UK firms, 97 deals originated in the US.

Expert Opinion

"These latest statistics demonstrate the continued interest that the US has in UK businesses. Looking at investment in the UK from the US 10 years ago, levels haven't changed considerably, and it is hoped that this level will increase as economic conditions improve.

“It's also clear the US is still very much focused on London and the South-East. Our recent report into foreign direct investment revealed the strength and attractiveness of London as a place to invest in, but it also highlighted the opportunities that lie elsewhere in the UK. More and more US investors are aware of this but there’s still some way to go in terms of getting the message across.” Georgie Collins, partner and Head of Irwin Mitchell's US Desk

Irwin Mitchell recently published its latest report examining foreign direct investment into the UK. The report can be downloaded from here.

Irwin Mitchell is a member of numerous strategic international networks including British American Business, the leading transatlantic trade association incorporating the British-American Chamber of Commerce in the US and the American Chamber of Commerce in the UK.

It joined First Law International (FLI) in October 2018 as part of its international growth strategy and since being appointed it has become a key member of the network - highlighted by its appointment to FLI’s Advisory Board.

Irwin Mitchell is also a member of the Commonwealth Enterprise & Investment Council - a network of 140 business and government members from around the Commonwealth – and has a seat on its Global Advisory Council.