UK businesses look overseas for acquisitions

British companies are taking the hunt for rival firms abroad.

New figures from EY (Ernst & Young) showed that the value of foreign takeovers by UK firms soared by nearly 60 per cent from £27.3 billion to £67 billion this year.

However, the data showed only a 16 per cent increase in the number of takeovers, which rose from 641 to 766. Overall, the number of deals by UK firms rose by 5.3 per cent to 2,726.

Britain is second most active nation

Of the nations that acquire businesses overseas, the UK has moved up in the rankings, overtaking Germany, Japan and China in terms of activity. However, the US remains first as the most active nation in acquiring firms abroad.

“While domestic activity is depressed, the appetite for overseas assets by UK companies is encouraging, and confirms the UK as a significant player in the global M&A market,” said Jon Hughes, the head of transaction advisory services for UK & Ireland at EY.

“It’s clear that UK businesses are searching for growth in new markets to help transform their business models,” he added.

Notable mergers

Recent takeovers include the £2 billion acquisition of Foster Wheeler, the Swiss rival of British engineer Amec; GlaxoSmithKline’s £4.5 billion offer to buy Novartis’s vaccines division; and Vodafone paying £6 billion for Spanish cable operator ONO.

Vodafone is also thought to be mulling over an £80 billion move for US rival Liberty Group, the owners of Virgin Media. However, the deal would face regulatory scrutiny in countries where the two businesses overlap, such as Britain, Germany and the Netherlands.