Domestic M&A numbers fall for the fourth consecutive quarter

A new report from the Office of National Statistics has revealed that the number of domestic M&A deals fell for the fourth consecutive quarter, reaching the lowest level for two years.

In total, there were 186 completed domestic acquisitions in Q4 of 2019, the fourth consecutive quarterly decline and the lowest number since Q4 of 2017. However, the value of deals in Q4 rose versus the previous quarter, due in part to the completion of more higher value deals such as OneSavings Bank’s acquisition of Charter Court Financial Services Group. 

On a full year basis, there were 871 completed domestic M&A deals in 2019, a 9 per cent decline on 2018. 

Meanwhile, there were 108 successful inward acquisitions by foreign companies in Q4 a decrease of 45 transactions versus the previous quarter. The total value of inward M&A in Q4 was £13.4bn, a decrease of £0.6bn versus the previous quarter.

In 2019, there were 575 completed inward acquisitions, worth a total of £53.8bn, compared with 603 inward M&A transactions, with a value of £78.8bn recorded in 2018.

Outward mergers (the acquisition of foreign companies by UK companies) also fell during Q4 2019, with 44 completed outward M&A deals, down from 54 acquisitions in Q3. 

On a full year basis, there were 250 successful outward M&A transactions recorded in 2019, 51 fewer than in the previous year, with a total value of £20.9bn, down £2.9bn versus the previous year.

Rob Donaldson, head of corporate finance at RSM said: 

‘M&A, of all varieties, domestic, inbound and outbound all fell in 2019 and other than a small uptick in domestic M&A, all fell in Q4 of 2019. That’s hardly surprising given the domestic political turmoil in the run up to the UK General Election in December. As the political heat rose we expected and got a freeze in M&A as the economic and meteorological temperature fell.

‘Early 2020 had seen a notable pickup in sentiment but it’s likely that as some of the Brexit uncertainty has lifted – albeit temporarily - a new mist has descended around the coronavirus. As a result, it’s unlikely that momentum will really build now until Q3 or Q4 of 2020.’