UK M&A value halves since 2007

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The value of UK M&A activity has dropped 66% from 2007 levels, and plummeted 36% in volume

In the UK, the total deal value reached $133.6bn in 2012, an increase of 1% on 2011, third highest in the world behind US and China. However, volumes dropped 8% to 2,284.

Globally, deal value plummeted to less than half, 47% compared to its 2007 peak, while volume was down 21%, according to new Ernst & Young figures.

Jon Hughes, head of E&Y’s transaction advisory services practice, believes, “caution and a distinct lack of confidence underpinned M&A sentiment in 2012 and has created a bias towards risk avoidance and inertia."

Mark Gregory, E&Y’s chief economist, said that in the UK, M&A has traditionally been “buoyed by financial services, life sciences and real estate sectors but these have been hit harder than most by the global downturn leading to a greater fall in activity.”

The UK has also lost its position as world’s top outbound cross border transactor, falling behind Japan and the US, with 900 deals valued at $67.8bn in 2012, compared to 1628 deals at $362.5bn in 2007.

BRIC (Brazil, Russia, India and China) nations M&A growth slowed in 2012 but still out-performed the eurozone.

BRIC nations now account for 15% of the global M&A market by value, up from 7% in 2007. Eurozone M&A value has dropped 10% in the same period.

Globally M&A activity has slumped by a further 12% in 2012. The total value of deals was also down, by 8%, to a projected $2.25trn.

This represents a fall of 47% from 2007 when the total value of deals reached a record $4.3trn.

Raymond Doherty

 

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