Activity Involving UK’s 25 Most Active Investing Countries Falls By 13% In Five Years

With two months to go until the UK government’s International Investment Summit, new statistics have revealed that UK firms are attracting 13% less M&A activity from organisations based overseas than five years ago.

According to law firm Irwin Mitchell, which has analysed M&A data compiled by Experian, the total number of deals completed by the most active 25 countries fell from 491 in H2 2019 to 427 in the first six months of 2024. The analysis also reveals only 36% of the 25 most active countries investing in the UK, completed more deals in the UK in the first six months of 2024, compared to 2019.

The UK is set to host a significant International Investment Summit on October 14. The event plans to attract 300 industry leaders and is seen as a key milestone in the government’s growth mission.

Expert Opinion

“Cross border M&A data is a strong indicator of FDI because it involves significant capital flows, changes in ownership and control, and long-term commitments to the target country’s economy.

“It is disappointing that just over a third of countries are more active five years ago than they are today and the number of US transactions involving UK companies has decreased by 9%. Attracting international investment is a key part of the new government’s growth strategy and it’s vital that the summit in October delivers some solutions.” Bryan Bletso, Head of International at Irwin Mitchell

According to Irwin Mitchell’s analysis of Experian’s MarketIQ database, in the most recent six months US companies completed 156 deals involving UK targets, taking its total to over 1,600 transactions since the second half of 2019. Over the past five years, France has been the second most active country in terms of cross border M&A into the UK, engaging in 357 deals. France is followed by Sweden, Ireland, and Canada, which completed 281 deals. 

Bryan Bletso also commented on the impact of the recent riots in the UK on FDI and whether the perception of the UK as an attractive place to invest in had suffered.

Expert Opinion

"Across our international network, our initial view is that we have not observed a significant decline in interest in the UK due to the recent riots, although it is a little early to form a definitive judgement so soon after the events. Investors naturally seek a stable socio-political environment, and we are relieved that the recent unrest appears to be relatively short-lived.

“Investors scrutinise economic trends, sector performance in the target country, and the overarching industrial strategy when considering greenfield investments or cross-border M&A. Our own research indicates that, compared to 2023, over 95% of the UK’s largest 50 cities are now perceived as less attractive to overseas investors. This assessment is based on factors which we know from speaking to our clients are high priority issues, include skills availability, infrastructure quality, entrepreneurship levels, and projected economic growth.

“Another key consideration is governmental stability. Rather than forming opinions based solely on incidents like riots, investors are more interested in observing the government’s response and management of such situations.

“Further disruption may logically result in some investments being delayed as companies assess the impact, but ultimately it is hard to predict as there are a lot of factors to take into consideration. Many of the large organisations we’re talking to across all our international desks are excited about the opportunities in the UK. The resilience the UK has demonstrated in the past when it comes to FDI would suggest that any impact caused by riots should be minimised assuming there are no other unexpected events.”
Bryan Bletso

Irwin Mitchell recently published a report with the Centre for Economics & Business Research (Cebr) which revealed the most attractive locations in the UK for foreign direct investment. According to the report, London remains the top city for investment, with Brighton and Edinburgh following due to their business growth and infrastructure. Coventry has notably risen in investment attractiveness, while Stockport, Bradford, Doncaster, and Kirklees also show promising growth, reflecting the diverse investment landscape across the UK.