Latest ONS Estimates Paint A Mixed Picture But Room For Optimism

The latest data from the Office for National Statistics (ONS) show a mixed picture in terms of inward mergers and acquisitions (M&A) activity in the UK. However, lawyers at national law firm Irwin Mitchell note that there are signs of positivity.

According to the ONS, the total value of inward M&A transactions reached £7.8 billion for the third quarter of 2024. This marks a rise of £1.1 billion from the previous quarter and £3.0 billion higher compared to the same period last year.

The number of transactions involving a change in majority share ownership saw a slight decrease compared to the previous quarter but was higher than the same point last year.

Key Highlights:

• Value of Transactions: Inward M&A transactions totalled £7.8 billion. The value of outward mergers and acquisitions (M&A) between Quarter 3 (Jul to Sep) 2020 and Quarter 3 2024 ranged from £1.7 billion to £32.1 billion.

• Number of Transactions: There were 179 completed inward M&A deals, a slight decrease from 187 in Q2 2024 but an increase from 149 in Q3 2023.

  Expert Opinion

  “Cross-border mergers and acquisitions activity is an important part of Foreign Direct Investment (FDI) as it can be a common mechanism for an organisation to enter a new market and is usually followed by new additional investments.
  
  “The latest ONS estimates paint a mixed picture, but there are reasons to be positive. The rise in the value of inward M&A activity indicates a growing favourable sentiment towards the UK market, highlighting the confidence international investors have in the UK’s economic stability and potential. This should only improve as the new government’s Industrial Plan for Growth takes shape.”
  Corporate partner and head of international at Irwin Mitchell

ONS reported that the value of outward M&A involving UK companies remained broadly consistent between Quarter 2 (Apr to Jun) 2024 and Quarter 3 (Jul to Sep) 2024.

There were an estimated 66 outward acquisitions involving a change in majority share ownership in Quarter 3 2024. This was 15 fewer than in the previous quarter (81) and 19 fewer than in Quarter 3 2023 (85).

Irwin Mitchell recently published a report into FDI which revealed the top 50 most attractive cities in the UK for FDI. The study found freeports and investment zones are becoming more influential and helping other parts of the UK outside of London to attract more investment.