M&A activity subdued in Q2 as borrowing costs rise
The ONS highlighted the role of higher interest rates on the downturn in M&A activity during the period.
According to figures from the Office for National Statistics, the total combined number of cross-border and domestic M&A deals involving a change in majority share ownership was 450 between April and June. This is 58 transactions fewer than in the first quarter, during which there were 508.
The provisional total number of monthly domestic and cross-border M&A deals fell slightly during April 2023, in which there were 163 deals, falling further during May, to 142 deals, before stabilising in June at 145.
Number of UK M&A deals drops in Q1 2023
Inward M&A value, which comprises foreign companies acquiring UK companies, was £7.4bn in the second quarter. This is £4.4bn lower than in the previous quarter, for which the value was £11.8bn.
The total value of outward M&A, whereby UK companies acquire foreign companies, was £2.3bn during the period, a figure £600m lower than in the first quarter, which saw deals worth £2.9bn.
Meanwhile, domestic M&A value — UK companies acquiring other UK companies — was £2.4bn, a total £300m less than in the previous three months, when the value was £2.7bn.
Pointing to the Bank of England's Agents' summary of business conditions for the second quarter 2023, the ONS noted the impact of higher interest rates on the downturn in M&A activity during the period.
M&A activity in wealth management sector set for significant rise
Lucy Stapleton, head of deals at PwC UK, said: «The UK has experienced a tough M&A market during the first half of the year and the Q2 data reflects how challenging the current conditions are to get deals done. Gaps in valuation expectation between buyers and sellers
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