Mergers and acquisitions involving UK companies: July to September 2022

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

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Cyswllt:
Email Dave Sweet

Dyddiad y datganiad:
6 December 2022

Cyhoeddiad nesaf:
7 March 2023

1. Main points

  • The total number of monthly domestic and cross-border mergers and acquisitions (M&A) has been relatively consistent from January 2022 to September 2022, in-line with pre-coronavirus (COVID-19) pandemic levels.

  • The total combined number of monthly M&A involving a change in majority share ownership increased between July 2022 (147) and August 2022 (164), before falling to 148 by the end of September 2022.

  • During Quarter 3 (July to Sept) 2022 there were a total of 459 completed domestic and cross-border M&A, a decrease of nine compared with the previous quarter (468), and 159 fewer than Quarter 3 2021 (618).

  • The total value of inward M&A (foreign companies abroad acquiring UK companies) in Quarter 3 2022 was £25.0 billion, £13.9 billion higher than Quarter 2 2022 (£11.1 billion).

  • The value of outward M&A (UK companies acquiring foreign companies abroad) in Quarter 3 2022 was £7.6 billion, £2.8 billion more than Quarter 2 2022 (£4.8 billion).

  • The value of domestic M&A (UK companies acquiring other UK companies) was £2.6 billion in Quarter 3 2022, £0.7 billion less than in the previous quarter (£3.3 billion).

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2. Monthly mergers and acquisitions (M&A)

Monthly domestic and cross-border M&A activity during 2020 was indirectly affected by the global coronavirus (COVID-19) pandemic, but it strengthened in 2021. Monthly cross-border M&A since February 2022 may have also been indirectly affected by the increased economic uncertainty arising from the Russian invasion of Ukraine.

Monthly mergers and acquisitions, Jan 2019 to Sept 2022

During Quarter 3 (July to Sept) 2022, the number of monthly inward M&A increased between July 2022 (46) and August 2022 (58) and was 55 during September 2022.

Monthly outward M&A saw a relatively consistent trend of activity, seeing 31 transactions in July and 29 during August, before declining to 25 in September 2022.

Domestic monthly M&A increased slightly between July (70) and August (77), before falling to 68 transactions during September 2022.

The Bank of England's Agents' summary of business conditions for Quarter 3 2022 states "that merger and acquisition activity was reported to be slowing to more normal levels; and contacts said that companies were becoming more cautious about discretionary spending". The same report also said that "a growing number of companies said that uncertainty about demand and the broader economic outlook and tighter financial positions had caused them to delay investment. High materials costs were also given as a factor in delaying investment plans. In addition, many companies said they had completed investment projects that had been delayed during the pandemic and were now returning to more normal levels of investment".

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3. Inward mergers and acquisitions (M&A)

In Quarter 3 (July to Sept) 2022 the total value of inward M&A of UK companies made by foreign companies rose to £25.0 billion. This is an increase of £13.9 billion compared with the previous quarter (£11.1 billion), and double that of Quarter 3 2021 (£12.5 billion).

Two notable inward acquisitions in Quarter 3 2022 were the acquisition of Meggitt Plc of the UK by Parker Hannifin Corporation of the USA, as detailed in this Investegate article, and the acquisition of Ultra Electronics Holdings Plc of the UK by Advent International Corporation of the USA. More information about this acquisition can be found in this DefenseNews article.

Value of quarterly inward M&A transactions involving UK companies

Number of quarterly inward M&A transactions involving UK companies

There were 159 completed inward M&A deals in Quarter 3 2022, a decrease of 15 on the previous quarter (174) and 41 fewer than in Quarter 3 2021 (200).

During Quarter 3 2022 there were 32 inward disposals involving a change of majority share ownership worth £8.8 billion, an increase on the previous quarter, when 24 transactions worth £4.7 billion were reported.

Analysis of the inward M&A annual 2021 results can be found in our Mergers and acquisitions involving UK companies, annual overview: 2021 article.

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4. Outward mergers and acquisitions (M&A)

The value of outward M&A (UK companies acquiring foreign companies) in Quarter 3 (July to Sept) 2022 was £7.6 billion. This was a £2.8 billion increase compared with Quarter 2 (Apr to June) 2022 (£4.8 billion), although £24.5 billion less than in Quarter 3 2021 (£32.1 billion).

Value of quarterly outward M&A transactions involving UK companies

One notable outward transaction in Quarter 3 2022 was the acquisition of Affinivax Inc of the USA by GSK Plc of the UK, explained in this Investegate article.

Number of quarterly outward M&A transactions involving UK companies

There were 85 outward M&A deals during Quarter 3 2022, 10 more than Quarter 2 2022 (75) and two more than Quarter 3 2021 (83).

Quarter 3 2022 saw 10 outward disposals involving a change of majority share ownership, valued at £0.9 billion compared with 11 disposals valued at £3.4 billion in Quarter 2 2022.

Our Mergers and acquisitions involving UK companies, annual overview: 2021 article provides further information on how outward M&A activity in 2021 compared with previous years.

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5. Domestic mergers and acquisitions (M&A)

In Quarter 3 (July to Sept) 2022 the value of domestic M&A (UK companies acquiring other UK companies) was £2.6 billion. This was £0.7 billion lower than Quarter 2 2022 (£3.3 billion) and £0.5 billion lower than Quarter 3 2021 (£3.1 billion).  

A large-value domestic acquisition which completed in Quarter 3 2022 was the acquisition of Gist Limited of the UK by Marks and Spencer Plc of the UK, detailed in this AJBell article.

Value of domestic M&A transactions involving UK companies by quarter

Number of quarterly domestic M&A transactions involving UK companies

There were 215 domestic acquisitions involving a change in majority share ownership in Quarter 3 2022, four fewer than Quarter 2 (Apr to June) 2022 (219) and 120 less than Quarter 3 2021 (335).

Analysis of the domestic M&A annual 2021 results can be found in our Mergers and acquisitions involving UK companies, annual overview: 2021 article.

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6. Data for mergers and acquisitions involving UK companies

Mergers and acquisitions involving UK companies
Dataset: Released 6 December 2022
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 timeseries
Dataset: Released 6 December 2022
Quarterly data on the value and number of mergers, acquisitions and disposals involving UK companies worth £1 million or more.

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7. 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:

M&As occur when one company takes control of another company. The internationally agreed definition of an 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 principally occur. Revision analysis, which shows changes between each quarterly bulletin, can be found in our data tables (table R1).

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 an 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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8. Measuring the data

Mergers and acquisitions (M&A) 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 with Quarter 1 (Jan to Mar) 2018.

The Russian invasion of Ukraine began on 24 February 2022, and in response, the UK government  imposed a range of economic sanctions on Russia from late February and early March 2022. However, the provisional M&A statistics for Quarter 3 (July to Sept) 2022 saw increases in the values of cross-border M&A investment, possibly due to companies reassessing their investment plans. We will continue to monitor the impact of the conflict and resulting sanctions in future quarterly releases.

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in our Mergers and acquisitions (M&A) QMI.

Economic statistics governance after Brexit

Following the UK's exit from the EU, new governance arrangements have been put in place to 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 center of this new governance framework is 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.

Further information about NSCASE can be found on the UK Statistics Authority website.

About ONS datasets

The datasets for mergers and acquisitions involving UK companies has recently been reviewed to ensure they meet the accessibility standards outlined in the Government Statistical Service (GSS) guidance on releasing statistics in spreadsheets. This is to ensure that all GSS outputs meet Web Content Accessibility Guidelines, a legal requirement set out in The Public Sector Bodies (Websites and Mobile Applications) Accessibility Regulations 2018.

We welcome any feedback on these changes. Share your feedback by emailing MA@ons.gov.uk.

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9. Strengths and limitations

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

  • transactions are only recorded in 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 result 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. 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.

It is sometimes necessary to suppress figures for certain items to avoid disclosing information about an individual business. Further information on why statistics are suppressed is available in our 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 particular 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 an 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) 2022 can be found in Sections 3, 4 and 5 of this bulletin. Lists of notable completed mergers and acquisitions valued in-excess of £100 million, and which took place in earlier quarters of 2022, can also be found in our previously published Mergers and acquisitions quarterly releases.

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11. Cite this statistical bulletin

Office for National Statistics (ONS), released 6 December 2022, ONS website, statistical bulletin, Mergers and Acquisitions involving UK companies July to September 2022

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Manylion cyswllt ar gyfer y Bwletin ystadegol

Dave Sweet
MA@ons.gov.uk
Ffôn: +44 1633 455860