Political chaos sees total value of takeovers this year fall by 30%


Political chaos sees total value of takeovers this year fall by 30%

  • Foreign acquisitions by British companies fell by 69 per cent this year
  • Analysts are expecting a wave of deals in 2020 because of rising certainty
  • A weak pound has made it tougher for British companies to buy firms abroad

Takeovers in the City dried up in 2019 as political turmoil deterred firms looking at risky tie-ups with UK companies, data shows.

Figures from information provider Refinitiv showed that the number of deals in 2019 involving British companies dropped 9 per cent to 5,058, and their total value fell by 30 per cent to $337billion (£260billion).

Foreign acquisitions by British companies fell by 69 per cent, their lowest level in a decade.

Refinitiv

Just Eat

Some of the notable deals include the London Stock Exchange pursuing the £22billion takeover of Refinitiv itself in July and the £5.1billion takeover tussle between Takeaway.com and South Africa’s Prosus for food delivery company Just Eat

Lucille Jones, an analyst at Refinitiv, said uncertainty over Brexit and the Election played a major role, adding: ‘While UK companies appear attractive takeover targets, mergers and acquisitions involving a UK buyer have declined. With uncertainties linked to Brexit, global trade disputes and geopolitical tensions it is not surprising UK chief executives and boards are exercising caution.’

A weak pound has also made it tougher for British companies to carry out acquisitions abroad. But that didn’t stop the London Stock Exchange from pursuing the £22billion takeover of Refinitiv itself in July. Other notable deals include the £5.1billion takeover tussle between Takeaway.com and South Africa’s Prosus for food delivery company Just Eat.

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Analysts are expecting a wave of deals in 2020 now firms have some certainty following the Election.

Bankers said companies, especially foreign firms, considering buying big British businesses did not want to pursue a major deal with the risk of a Jeremy Corbyn-led Labour.

 



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