Mergers and acquisitions involving UK companies: July to September 2021

Transactions that result in a change of ultimate control of the target company and have a value of £1 million or more.

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Cyswllt:
Email Lee Mallett

Dyddiad y datganiad:
7 December 2021

Cyhoeddiad nesaf:
8 March 2022

1. Main points

  • The total number of completed monthly deals between July and September 2021 fell from 164 to 136; this follows a slight downward trend in the number of transactions in recent months since the peak of 292 in March 2021.

  • Quarter 3 (July to Sept) 2021 saw 453 completed mergers and acquisitions (M&A) transactions, a slight decrease of 37 when compared with the previous quarter (490) yet a sizeable increase of 128 when compared with Quarter 3 (July to Sept) 2020 (325).

  • In Quarter 3 2021 outward M&A (UK companies acquiring foreign companies abroad) was valued at £32.8 billion, £24.6 billion higher than the previous quarter (£8.2 billion); notable outward completed acquisitions included Astra Zeneca Plc of the UK, which acquired Alexion Pharmaceuticals INC of the USA and Intertek Group Plc of the UK, which acquired SAI Global PTY Ltd of Australia.

  • The total value of inward M&A (foreign companies abroad acquiring UK companies) during Quarter 3 2021 was £10.7 billion, £18.0 billion lower than in Quarter 2 (Apr to June) 2021 (£28.7 billion); one notable inward acquisition was Electronic Arts Inc of the USA, which acquired Playdemic Ltd of the UK.

  • Domestic M&A (UK companies acquiring other UK companies) was £3.0 billion in Quarter 3 2021; one successful domestic acquisition was Biffa Plc of the UK, which acquired Syracuse Waste Ltd/Viridor Waste Management of the UK.

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2. Monthly mergers and acquisition involving UK companies

Mergers and acquisitions (M&A) activity has been affected by the global coronavirus (COVID-19) pandemic, with the total number of completed monthly domestic and cross-border M&A falling to a low of 58 in May 2020. After this decrease, M&A activity started to recover with an upward trend to a new peak of 292 in March 2021 – the highest of all months from the data beginning January 2019. However, in April 2021 there was a sizeable decrease compared with March 2021 (from 292 to 160), which continued to May 2021 (149). Despite an increase to June 2021, there has been a slight downward trend through to September 2021, when 136 completed transactions were recorded.

Monthly domestic M&A activity declined slightly between July (71) and August 2021 (69), continuing the decline to record 64 transactions during September 2021.

Similarly, inward M&A also decreased between the months of July (64) and August 2021 (59), before declining further to 48 completed transactions during September 2021.

The number of monthly outward M&A has followed a relatively flat trend since February 2021 (25) through to September 2021 (24).

The Bank of England’s Agents’ summary of business conditions report for Quarter 3 (July to Sept) 2021 states that in recent months there has been a “recovery in economic activity” and reports “good level of demand across a range of activities”, which included mergers and acquisitions.

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3. Mergers and acquisitions involving UK companies data

Mergers and acquisitions involving UK companies
Dataset | Released 7 December 2021
Quarterly estimates of the value and number of mergers and acquisitions and disposals involving UK companies worth £1 million or more.

Mergers and acquisitions involving UK companies – time-series
Dataset | Released 7 December 2021
Quarterly data on the value and number of mergers, acquisitions and disposals involving UK companies worth £1 million or more.

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4. Glossary

Domestic mergers and acquisitions (M&A)

Mergers and acquisitions of UK companies acquiring other UK companies.

Inward M&A

Mergers, acquisitions and disposals of UK companies by foreign companies.

Outward M&A

Mergers, acquisitions and disposals of foreign companies abroad by UK companies.

Mergers and acquisitions transactions

Mergers and acquisitions (M&As) occur when one company takes control of another company. The internationally agreed definition of a M&A deal is when one company gains more than 50% of the ordinary shares (or voting rights) of the acquired company.

Disinvestments (disposal transactions)

Disinvestment or disposal transactions refers to a disposal of the ordinary share ownership of a subsidiary company.

Transaction aggregates

The following are definitions of reasons why revisions to the aggregates for M&A transactions valued at £100 million and greater principally occur.

Completion of transactions

On announcement of a proposed transaction, an expected completion date is usually given. The publicly reported values will be allocated to the quarter of expected completion. If the transaction is ultimately completed in an earlier or later quarter, the recorded values will be reallocated to the new quarter.

Publicly reported values

Publicly reported values are initially used to compile the aggregates. These can vary considerably from the values ultimately supplied by the respondents, frequently because the assumption of debt has been included in the publicly reported value. A nominal value is applied if no publicly reported value is available. The final values used to create the aggregates are those supplied by the respondent.

Non-completion of transactions

On announcement of a proposed transaction, the publicly reported value of the transaction is recorded. If the transaction does not subsequently take place the recorded value will be deleted.

Non-share transactions

On announcement of a proposed transaction, it may appear that there will be transactions in the share capital of the companies involved and the publicly reported values will be recorded. If subsequent information contradicts this, the recorded values will be amended or deleted.

Control

On announcement of a proposed transaction, it may appear that the transaction will give the purchasing company control of the purchased company, that is, a share ownership of greater than 50%. If subsequent information contradicts this, the recorded values will be amended or deleted.

Revisions from M&A data source

The current source provider of M&A deal information continually updates its database. Therefore, any new and additional reported transactions which completed in previous quarterly periods will be included as revisions.

Revisions from respondents

Very occasionally companies will restate the values that they have previously supplied to us.

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5. Measuring the data

Merger and acquisitions statistics from Quarter 1 (Jan to Mar) 2018 fully incorporate the Bureau Van Dijk (BVD) Zephyr data source and methods. This new data source has increased the coverage of smaller M&A transactions and therefore results in a discontinuity in the number of transactions reported. Users are therefore advised to take care when comparing the latest estimates with the number of transactions reported for quarters prior to Quarter 1 2018. See Mergers and acquisitions Quality and Methodology Information for more details.

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6. Quality

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Mergers and acquisitions Quality and Methodology Information.

Economic statistics governance after EU exit

Following the UK’s exit from the EU, new governance arrangements are being put in place that will support the adoption and implementation of high-quality standards for UK economic statistics. These governance arrangements will promote international comparability and add to the credibility and independence of the UK’s statistical system.

At the centre of this new governance framework will be the new National Statistician’s Committee for Advice on Standards for Economic Statistics (NSCASE). NSCASE will support the UK by ensuring its processes for influencing and adopting international statistical standards are world-leading. The advice NSCASE provides to the National Statistician will span the full range of domains in economic statistics, including the National Accounts, fiscal statistics, prices, trade and the balance of payments and labour market statistics.

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7. Strengths and limitations

We produce statistics on the number and value of merger and acquisitions (M&A) transactions. This information is presented in the following way:

  • transactions are only recorded in the Office for National Statistics (ONS) data once the deal has been legally completed

  • each transaction has a value of at least £1 million

  • the transactions results in a change of ultimate control of the target company

  • all values are in current prices, and therefore have not been adjusted for the effects of inflation

These are among the main reasons our M&A statistics can differ from those reported in other sources. There can be a substantial time gap between the point at which a deal is announced and when it is legally completed. In addition, in some cases, announced M&A deals do not take place. The ONS’ statistics on disposals (or de-mergers) are also included in tables alongside this bulletin. These are typically fewer in number per quarter, which can lead to greater suppression of statistics to mitigate disclosure. The focus of this bulletin is on acquisitions, although some of the more complex deals can include the disposal of some part of the newly created corporate structure.

information about an individual business. Further information on why statistics are suppressed is available in the ONS Disclosure Control Policy.

It is not uncommon for the value of M&A transactions to vary considerably from one quarter to the next. This mainly reflects the nature of M&A activity in that these capture one-off deals. Therefore, if a particularly high-value M&A deal completes in a given quarter, it can make that quarter seem out of line with those that precede and follow it.

The volatility of M&A transactions also makes it difficult to link M&A statistics with other economic indicators – such as gross domestic product – or global events because of the time it can take between announcing and completing a M&A deal. It can therefore be more informative to look at longer-term trends within M&A statistics rather than focusing on quarterly movements. Details of any notable M&A deals that completed in Quarter 3 (July to Sept) 2021 can be found in the main points section of this bulletin.

Bureau Van Dijk confirm that there has been minimal impact on their activity from the economic restrictions introduced with the global coronavirus (COVID-19) pandemic. They report uninterrupted service from their operations and any impact could feature in companies delaying how quickly they report a completed deal.

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Manylion cyswllt ar gyfer y Bwletin ystadegol

Lee Mallett
MA@ons.gov.uk
Ffôn: +44 (0)1633 455060