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Latest M&A Statistics for Q2 2020

The UK Office for National Statistics have just released their latest data for Mergers and Acquisitions involving UK companies for Q2 2020, during the period April to June 2020.

Q2 Headlines

  • During Q2 (Apr-Jun) 2020, the estimates for the value of outward mergers and acquisitions (M&A) involving UK companies increased slightly while both inward and domestic M&A saw notable decreases, when compared with Q1 (Jan-Mar) 2020.
  • Domestic and cross-border M&A involving UK companies in Q2 2020 saw 152 completed transactions, a sizeable decrease of 311 when compared with the previous quarter (463) and 292 fewer than Q2 2019 (444).
    • Outward M&A increased slightly
    • Inward M&A at lowest value recorded since Q4 2014
    • Domestic M&A at joint-lowest value since Q4 1975

Number of M&A transactions falls

The number of monthly domestic and cross-border mergers and acquisitions involving UK companies from January 2019 to June 2020 ranged from 37 to 178. The monthly profile of completed domestic and cross-border mergers and acquisitions shows a considerable reduction in the number of transactions from April 2020. June saw a slight increase, it will be interesting to see where this trend goes in Q3.

There was no explaination as to why there was such a dramatic decrease in transactions but it does correlate with the timing of the lockdown that restricted movement across the UK. The Bank of England highlighted ” a sharp fall in transactional business, such as mergers and acquisitions and property-related services”. It also reports that “companies have mostly cancelled or postponed non-essential investment to preserve cash buffers, and many are uncertain when or whether investment plans will be reinstated.” See their Agent’s Summary of Business Conditions report Q2 2020 for more details.

UK M&A Q2 2020: Total Number of Transactions falls

Outward M&A

There was a slight rise in value of outbound M&A (UK companies acquiring foreign companies abroad) was valued at £4.4 billion in Q2 2020, a slight increase of £0.3 billion when compared with Q1 2020 (£4.1 billion) and £2.7 billion higher than in Q2 2019 (£1.7 billion).

UK M&A Q2 2020: Value of Outward M&A

The number of outward deals was at an all time low, for four years at just 20.

UK M&A Q2 2020: Outward deals at all time low

Inward M&A

The value of inward M&A (foreign companies abroad acquiring UK companies) in Q2 2020 (£2.1 billion) was the lowest value recorded since Q4 (Oct-Dec) 2014 (£1.9 billion), while also down £3.0 billion when compared with Q1 2020 (£5.1 billion) and £16.6 billion lower than Q2 2019 (£18.7 billion).

UK M&A Q2 2020: Value of Inward M&A

The number of inward deals also fell to 59. This was 85 fewer than for Q1 and 106 fewer than the same period last year.

UK M&A Q2 2020: Number of Inward M&A

Domestic M&A

Domestic M&A (UK companies acquiring other UK companies) during Q2 2020 was valued at £0.3 billion, the joint-lowest value since Quarter 4 (Oct-Dec) 1975 (also £0.3 billion) and a sizeable decrease when compared with Q1 2020 (£3.2 billion) and Q2 2019 (£2.7 billion).

UK M&A Q2 2020: Value of Domestic M&A

The number of domestic deals fell dramatically to 73, the lowest in two years.

UK M&A Q2 2020: Number of Domestic M&A fell sharply

The above data was extracted from the following Office of National Statistics webpage.