Mergers and acquisitions involving UK companies: April to June 2021

• In Quarter 2 (Apr to June) 2021 the value of cross-border and domestic mergers and acquisitions (M&A) involving a change in majority share ownership recorded notable increases.   

• The total number of monthly cross-border and domestic deals fell to a low of 58 in May 2020 as the coronavirus (COVID 19) pandemic affected the amount of M&A activity; thereafter, monthly M&A activity increased reaching a peak in March 2021 (246) before falling considerably to 127 in April 2021 and continuing around that level to June 2021 (131).

• In Quarter 2 2021 the total value of inward M&A (foreign companies abroad acquiring UK companies) was £27.7 billion, £19.4 billion higher than Quarter 1 (Jan to Mar) 2021 (£8.3 billion).

• The value of domestic M&A (UK companies acquiring other UK companies) was £10.6 billion in Quarter 2 2021, an increase of £6.1 billion on the value recorded in the previous quarter (£4.5 billion).

• Outward M&A (UK companies acquiring foreign companies abroad) was valued at £6.0 billion in Quarter 2 2021, £4.3 billion higher than the previous quarter (£1.7 billion).

Mergers and acquisitions (M&A) activity has been affected by the global coronavirus (COVID-19) pandemic. As such, the total number of completed monthly domestic and cross-border M&A rapidly fell to a low of 58 in May 2020. After the fall, M&A activity started to recover with an upward trend to a new peak of 246 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 (246 to 127). This level continued to June 2021, which had a total of 131 completed transactions.

Domestic M&A saw a significant decrease of 71 deals between March 2021 (132) and April 2021 (57) before seeing a slight increase to June 2021 (69).

Similarly, inward M&A also decreased between March 2021 (90) and May 2021 (38), then increased during June 2021 (45).

The monthly number of outward M&A has followed a relatively flat trend since December 2020 (23) to June 2021 (17).

The Bank of England's Agents' summary of business conditions report for Quarter 2 2021 states: "During the early stages of the pandemic in 2020, economic activity fell at an unprecedented pace... more recently, economic activity has recovered as social distancing restrictions have been lifted."

The total value of inward mergers and acquisitions (M&A) of UK companies made by foreign companies which involved a change of majority share ownership was £27.7 billion in Quarter 2 (Apr to June) 2021, a sizeable increase of £19.4 billion on the previous quarter (£8.3 billion) and £24.9 billion more than the value of £2.8 billion in Quarter 2 2020. 

Two notable inward acquisitions that completed in Quarter 2 2021 were: 

• Intact Financial Corporationof Canada acquired RSA Insurance Group Limited of the UK

• Atlas Ontario LP of Canada acquired G4S Plc of the UK

Number of quarterly inward M&A transactions involving UK companies.

In Quarter 2 2021 there were 129 completed inward M&A deals, a decrease of 71 on the previous quarter (200), although a notable increase of 48 acquisitions when compared with Quarter 2 2020 (81).

The value of domestic mergers and acquisitions (M&A) involving a change in majority share ownership in Quarter 2 (Apr to June) 2021 was £10.6 billion, £6.1 billon higher than the previous quarter (£4.5 billion) and a £9.7 billion increase on Quarter 2 2020 (£0.9 billion).

Two notable domestic acquisitions that completed in Quarter 2 2021 were: 

• National Grid Plc of the UK, which acquired PPL WPD Investments Ltd of the UK

• Pennon Group Plc of the UK, which acquired Bristol Water Holdings UK Ltd of the UK

There were 187 completed domestic M&A during Quarter 2 2021,103 fewer than the previous quarter when 290 acquisitions were recorded and 23 additional acquisitions than those recorded in Quarter 2 2020 (164).

In Quarter 2 (Apr to June) 2021 the value of outward mergers and acquisitions (M&A) (UK companies acquiring foreign companies abroad) involving a change in majority share ownership was £6.0 billion, £4.3 billion higher than recorded in the previous quarter (£1.7 billion).

There were 65 completed outward acquisitions involving a change in majority share ownership in the second quarter of 2021, a similar number as reported in Quarter 1 (Jan to Mar) 2021 (66) yet 36 more transactions than Quarter 2 2020 (29).  

Notable outward acquisitions which completed in Quarter 2 2021 were:

• Sensata Technologies Holding Plc of the UK acquired Xirgo Technologies Intermediate Holdings LLC of the USA

• Coca-Cola Europacific Partners Plc of the UK acquired Coca-Cola Amatil Ltd of Australia

Domestic mergers and acquisitions

Mergers and acquisitions (M&A) of UK companies acquiring other UK companies.

Inward mergers and acquisitions

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

Outward mergers and acquisitions

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

Mergers and acquisitions transactions

Mergers and acquisitions (M&A) 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.

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 to Quarter 1 2018. See Mergers and acquisitions Quality and Methodology Information for more details.

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 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 data 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 in order to avoid disclosing information about an individual business. Further information on why statistics are suppressed is available in the Office for National Statistics (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 2 (Apr to Jun) 2021 can be found in the respective sections of this bulletin. 

Bureau Van Dijk confirms 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.

Supplementary information about mergers and acquisitions involving UK companies was published in: