December 2020

Latest M&A Statistics for Q3 2020

The UK Office for National Statistics have just released their latest data for Mergers and Acquisitions involving UK companies for Q3 2020, during the period July to September 2020.

Q2 Headlines

• During Q3 (Jul-Sep) 2020, the estimated values of both domestic and inward mergers and acquisitions (M&A) involving UK companies recorded increases, while outward M&A saw a decrease when compared with Q2 (Apr-Jun) 2020.
• Domestic M&A (UK companies acquiring other UK companies) in Q3 2020 was worth £4.4 billion, recording a sizeable increase of £4.0 billion when compared with Q2 2020 (£0.4 billion) and also £1.2 billion higher than Q1 (Jan to Mar) 2020 (£3.2 billion).
• Inward M&A (foreign companies abroad acquiring UK companies) in Q3 2020 was valued at £2.9 billion, a slight increase of £0.8 billion on the previous quarter (£2.1 billion), yet £2.2 billion lower than Q1 2020 (£5.1 billion).
• The value of outward M&A (UK companies acquiring foreign companies abroad) was £1.3 billion in Q3 2020, a notable decrease of £4.1 billion when compared with Q2 2020 (£5.4 billion) and also £2.7 billion lower than seen in Q1 2020 (£4.0 billion).
• Domestic and cross-border M&A involving UK companies in Q3 2020 saw 273 completed transactions, an increase of 97 when compared with the previous quarter (176), but 162 fewer than Q3 2019 (435).

Monthly M&A

Not surprisingly, in the grip of a global pandemic, the number of M&A transactions in the UK reached a low of 37 in May. March saw the highest numbers at 187, just before the first lockdown but throughout the year the totals were lower than for 2019.

Domestic deals (UK to UK companies) fared more favourably from May to September with a distinct uptick seen in Q3 up to 273 transactions. Although this was an increase of 97 from Q2 it was still a sizeable decrease from Q3 2019 which was 435 transactions.

The Bank of England Agents’ Summary of Business Conditions report Quarter 3 2020 reported that “Investment intentions remained significantly weaker than a year ago”. However, it stated that “There were also several reports of investment being reinstated or accelerated”.

Domestic M&A

There was a sizable increase in UK companies acquiring other UK companies in Q3 2020 compared both to Q3 2019 and the previous quarter Q2 2020.

The value of domestic M&A in Q3 2020 was £4.4 billion, a sizeable £4.0 billion increase on the previous quarter (£0.4 billion) and also £2.7 billion higher than Q3 2019 (£1.7 billion). This can largely be explained by a few notable domestic acquisitions with values in excess of £100 million such as:

1. Phoenix Group Holdings Plc of the UK, which acquired Reassure Group Plc of the UK (read more here) &
2. Viaro Investment Ltd of the UK acquired RockRose Energy Plc of the UK (more here)

The estimates for the number of completed domestic mergers and acquisitions between Q3 (Jul-Sep) 2016 and Q3 (Jul-Sep) 2020 ranged from 54 to 303 transactions

Inward M&A

The value of inward M&A of UK companies made by foreign companies in Q3 (Jul-Sep) 2020 saw a slight increase when compared with Q2 (Apr-Jun) 2020. In comparison, the latest value of completed inward M&A recorded a sizeable decrease compared with Q3 2019.

Between Q2 2020 and Q3 2020, the value of inward M&A increased by £0.8 billion, from £2.1 billion to £2.9 billion and can be explained by an increase in the number of completed transactions (12 deals). Despite this small quarterly increase, comparing the latest total value of inward M&A with the same period a year ago (Q3 2019) shows a decrease of £11.2 billion (from £14.1 billion to £2.9 billion).

Notable inward acquisitions with values in excess of £100 million that took place in Q3 2020 were:

1. Microsoft Corporation of the United States, which acquired Metaswitch Networks Ltd of the UK (read more here) &
2. Bayer AG of Germany, which acquired Kandy Therapeutics Ltd of the UK (more here)

Estimates for the value of inward M&A between Q3 (Jul-Sep) 2016 and Q3 (Jul-Sep) 2020 ranged from £2.1 billion to £85.2 billion.

The estimates for the number of inward M&A between Q3 (Jul-Sep) 2016 and Q3 (Jul-Sep) 2020 ranged from 44 to 176 transactions.

In Q3 there were 26 completed inward disposals of UK companies made by foreign companies worth £0.7 billion, recording seven additional transactions than Q2 2020 (19) but 12 fewer than Q3 of the previous year (38).

Outward M&A

The value of outward M&A of foreign companies made by UK companies during Q3 (Jul-Sep) 2020 recorded a notable decrease when compared with both Q2 (Apr-Jun) 2020 and Q3 2019.

Outward M&A between Q2 2020 (£5.4 billion) and Q3 2020 (£1.3 billion) showed a notable decline of £4.1 billion and was also £8.0 billion lower than the same period of the previous year (£9.3 billion). These decreases can be explained by the absence of any notable outward acquisitions worth in excess of £100 million.

Estimates for the value of outward M&A between Q3 (Jul-Sep) 2016 and Q3 (Jul-Sep) 2020 ranged from £1.3 billion to £51.8 billion. There were 42 completed outward M&A deals during Q3 2020, 20 additional deals than in Q2 2020 (22), yet 15 fewer deals when compared with Q3 2019 (57).

Estimates for the number of outward M&A between Q3 (Jul-Sep) 2016 and Q3 (Jul-Sep) 2020 ranged from 22 to 88 transactions.

The above data for M&A Statistics for Q3 2020 was extracted from the following Office of National Statistics webpage.

Tags: M&A Statistics, M&A Stats, Office for National Statistics, Q3 2020, UK