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Latest M&A stats from Office for National Statistics

Here’s a brief roundup of the latest stats on M&A available from the Office for National Statistics:

In Quarter 3 2018 the value and number of inward M&A declined, the value of outward M&A increased & the value of domestic M&A saw a notable decline. That being said if you look at the graph for 2018 inbound M&A has remained significantly stronger than for the previous 3 years.

Number of acquisitions in the UK by foreign companies

The value of inward mergers and acquisitions (M&A) in Quarter 3 (July to Sept) 2018 was £3.5 billion, the lowest value since Quarter 4 (Oct to Dec) 2017; the value of inward disposals also declined reporting a value of £1.8 billion, the lowest since Quarter 4 2017.

Outward M&A values were reported at £4.5 billion in Quarter 3 2018, up £2.0 billion on the previous quarter (Apr to June 2018); in comparison, the value of outward disposals (£5.0 billion) was the highest since Quarter 3 2017.

The value of domestic M&A was £3.0 billion in Quarter 3 2018, which was £9.0 billion lower than the previous quarter and the first quarterly decline since Quarter 4 2016.

Global mergers, acquisitions and disposals activity can be driven by the availability of credit. Therefore, when credit conditions deteriorate, as happened in the 2008 to 2009 economic downturn, mergers and acquisitions (M&A) activity declines.

M&A activity can also be affected by the economic outlook and company profits, in addition to a range of other economic factors. External evidence suggests business investment intentions remain positive though, see Bank of England reports:-

The process of completing a M&A transaction takes time and sometimes there may be a lag between improving economic conditions and any change in M&A activity.