UK M&A activity falls in H1 as volume of deals slumps
The report found there was a total of £42.8bn worth of UK deals in H1 2023, a 55% drop when compared to £95bn in H1 2022.
According to PwC's latest Global M&A Industry Trends report, the UK saw a total of 1,902 deals during the period, compared to 2,408 in H1 2022, a drop of 21%. However, while year-on-year volume is down, deal activity is still at or above 2018-2019 levels.
The report found there was a total of £42.8bn worth of UK deals in H1 2023, a 55% drop when compared to £95bn in H1 2022, due to fewer larger deals and shrinking average deal size.
The number of deals greater than £1bn in value dropped from 19 with a combined value of £46.7bn in H1 2022 to seven deals with a combined value of £15.4bn in the first six months of 2023.
Number of UK M&A deals drops in Q1 2023
Because smaller deals are more manageable in the current challenging financing and regulatory environment, mid-market deal activity has remained more resilient.
Lucy Stapleton, head of deals at PwC UK, said: «In spite of the macroeconomic backdrop dealmakers remain optimistic and there is pent up demand amongst dealmakers who remain poised to deploy capital when market conditions begin to stabilise and valuation gaps narrow.
»The mid-market is continuing to hold up as cash-rich corporates look for strategic opportunities and we may see more bolt-on transactions as well as sell-sides as private equity and corporates start to prepare to exit businesses."
In sector terms, Technology, Media and Telecommunications (TMT) saw the most M&A activity (511), accounting for just over a quarter (27%) of the total, followed by Industrial, Manufacturing and Automotive (466) and Consumer Markets (393).
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