Mergers and acquisitions involving UK companies: Oct to Dec 2016

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

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Release date:
7 March 2017

Next release:
6 June 2017

Table of contents

  1. Main points
  2. Your views matter
  3. Uses of Mergers and Acquisitions data
  4. Things you need to know about this release
  5. Summary
  6. Transactions in the UK by other UK companies (Quarter 4 Oct to Dec 2016)
  7. Transactions in the UK by other UK companies (Jan to Dec 2016)
  8. Transactions in the UK by foreign companies (Quarter 4 Oct to Dec 2016)
  9. Transactions in the UK by foreign companies (Jan to Dec 2016)
  10. Transactions abroad by UK companies (Quarter 4 Oct to Dec 2016)
  11. Transactions abroad by UK companies (Jan to Dec 2016)
  12. Additional information
  13. How our statistics compare with external evidence
  14. Quality and methodology
  15. Background notes

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1. Main points

  • During Quarter 4 (Oct to Dec) 2016, the estimates for the total number of successful domestic and cross-border mergers and acquisitions (M&A) involving UK companies remained relatively flat when compared with both Quarter 3 (July to Sept) 2016 and also with the same quarter of the previous year (Quarter 4 2015).

  • During 2016 (Jan to Dec), the number of successful inward and domestic M&A involving UK companies saw notable increases, showing the highest levels of M&A activity since 2008 and 2011; in comparison, the number of outward M&A involving UK companies declined.

  • In 2016, there were 227 successful inward M&A worth £187.4 billion making it the highest annual number since 2011 and with the highest annual value since we first published M&A data (1969).

  • During 2016, a total of 400 domestic M&A totalling £23.9 billion were successful, the highest number and value since 2008.

  • A short article has been published alongside this release to provide additional context for the large value of inward M&A during 2016.

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2. Your views matter

We are constantly aiming to improve this release and its associated commentary. We would welcome any feedback you might have and would be particularly interested in knowing how you make use of these data to inform our work. Please contact us via email: ma@ons.gov.uk or telephone Sami Hamroush on +44 (0)1633 455087.

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3. Uses of Mergers and Acquisitions data

The estimates produced for mergers and acquisitions (M&A) are important components of foreign direct investment flows data (inward and outward), which is used to calculate the UK Balance of Payments published in the Pink Book and Blue Book.

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4. Things you need to know about this release

This release covers mergers and acquisitions (M&A) transactions that have been successfully completed, result in a change of ultimate control of the target company and have a value of £1 million or more. Information on the number and value of transactions are reported, in addition to whether transactions are acquisitions or disposals.

Figures relating to mergers are included within acquisitions and those relating to demergers are contained within disposals. These statistics are presented on a current price basis, which relates to prices as they were at the time of measurement and they are therefore not adjusted for inflation.

The quarterly numbers and value of M&A activity are prone to large quarter-on-quarter movements, as these data relate to specific “one-off” only transactions. For example, one quarter can be heavily impacted by one large transaction. Therefore it can be more appropriate to analyse trends over time.

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5. Summary

During Quarter 4 (Oct to Dec) 2016, the total number of successful domestic and cross-border mergers and acquisitions (M&A) involving UK saw a decrease when compared with Quarter 3 (July to Sept) 2016 and also with the same quarter of the previous year (Quarter 4 2015). In contrast, the overall total value of successful M&A involving UK companies reported in Quarter 4 2016 saw a notable increase.

Overall in 2016 (Jan to Dec), the number of outward M&A activities involving UK companies remained at lower levels than observed during the 2008 to 2009 economic downturn (Figure 1).

In contrast, the number of inward and domestic M&A saw a notable increase in activity during 2016 when compared with 2015, representing year-on-year increases of 57% and 63% respectively.

The average quarterly value per M&A transaction since 2012 was above the long run quarterly average since 1997.

Figure 1: Number of acquisitions involving UK companies, Quarter 1 (Jan to Mar) 1990 to Quarter 4 (Oct to Dec) 2016

Source: Office for National Statistics

Notes:
  1. Please click on image to enlarge

Download this chart Figure 1: Number of acquisitions involving UK companies, Quarter 1 (Jan to Mar) 1990 to Quarter 4 (Oct to Dec) 2016

Image .csv .xls

Recent M&A statistics can be put into context by comparing the M&A activity involving UK companies over consecutive 5-year intervals since 1997 (Table 1A).

Average outward M&A

On average, 128 acquisitions were completed each quarter during the 1997 to 2001 period (5-year interval), with an average value of £160 million per transaction. The average number of outward acquisitions continued to see a decline during the following 10 years (2002 to 2011), falling to 73 outward acquisitions with an average value of £101 million. For the period Quarter 1 (Jan to March) 2012 to Quarter 3 (July to Sept) 2016, the average number of outward acquisitions fell further to reach 31. While the average quarterly number in this last period was the lowest on the 5-year intervals considered, the average value per transaction of £147 million was the highest recorded since the 1997 to 2001 period.

The average value per transaction in Quarter 4 (Oct to Dec) 2016 is much higher than the average quarterly value between Quarter 1 2012 and Quarter 3 2016.

Average inward M&A

During the 5-year period 1997 to 2001, the average number of inward acquisitions was reported as 54 per quarter with an average value of £182 million. The following 10 years (2002 to 2011) experienced relatively stable levels of M&A activity before reaching an average number of 39 inward acquisitions with an average value per transaction of £270 million during Quarter 1 (Jan to Mar) 2012 to Quarter 3 (July to Sept) 2016. The average value per transaction has increased over each of the 5-year intervals.

Average domestic M&A

The average number of domestic acquisitions per has seen a decline since the 2002 to 2006 period. The average number of domestic M&A for 2002 to 2006 was 164 with an average value of £39 million per transaction before falling to 67 transactions with an average of value of £38 million in 2012 to 2016 Quarter 3 (July to Sept) period.

Table 1: The average number and value of mergers and acquisitions involving UK companies, grouped into 5 year intervals, 1997 to 2016

 Abroad by UK companies Overseas companies in the UK Between UK companies
 NumberValueAverage value NumberValueAverage value NumberValueAverage value
1997 to 2014 Q48010,440130 499,481193 1266,42651
1997 to 200112820,402160 549,900182 13610,92181
2002 to 2006796,81286 469,203199 1646,44839
2007 to 2011678,014119 5411,813218 1214,80740
2012 to 2016 Q3314,538147 3910,617270 672,53138
Q4 2016133,092238 3783,3252,252 561,85933
Source: Office for National Statistics
Notes:
1. At Quarter 1 2010, the deal identification threshold was raised for the mergers and acquisitions surveys was raised from £0.1 million to £1 million. There is therefore a discontinuity in the number of transactions reported as illustrated in the table.
2. Average value per transaction.
3. Quarter 1 is January to March, Quarter 2 April to June, Quarter 3 July to September and Quarter 4 is October to December.
4. At Quarter 4 2016, the actual number of completed deals is used to calculate the average value per transaction.

Download this table Table 1: The average number and value of mergers and acquisitions involving UK companies, grouped into 5 year intervals, 1997 to 2016

.xls (28.7 kB)

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6. Transactions in the UK by other UK companies (Quarter 4 Oct to Dec 2016)

The number and value of domestic mergers and acquisitions (M&A) fell during Quarter 4 (Oct to Dec) 2016.

There were 56 successful acquisitions of UK companies by other UK companies in Quarter 4 2016 involving a change of majority share ownership, a 53% fall on the number of successful domestic M&A reported for Quarter 3 (July to Sept) 2016 (118 acquisitions) and the same number as recorded 2 years previous in Quarter 4 2014 (Figure 2).

During Quarter 4 2016, the value of successful domestic M&A was £1.9 billion compared with £3.4 billion reported in the previous quarter (July to Sept) reflecting a quarter-on-quarter decrease of £1.6 billion (47%).

Figure 2: Quarterly value and number of acquisitions of UK companies by other UK companies, Quarter 1 (Jan to Mar) 2006 to Quarter 4 (Oct to Dec) 2016

Source: Office for National Statistics

Notes:
  1. At Quarter 1 2010, the deal identification threshold for the mergers and acquisitions surveys was raised from £0.1 million to £1.0 million. There is therefore a discontinuity in the number of transactions reported as illustrated in the figure.
  2. All values are at current prices (See Background notes for definition).

Download this chart Figure 2: Quarterly value and number of acquisitions of UK companies by other UK companies, Quarter 1 (Jan to Mar) 2006 to Quarter 4 (Oct to Dec) 2016

Image .csv .xls

Notable domestic acquisitions, valued at £100 million or more, that took place during Quarter 4 2016:

Pentland Group Plc (JD Sports Fashion) of the UK acquired Go Outdoors Topco Ltd of the UK

Daisy Group Holdings Ltd of the UK acquired Alternative Networks Plc of the UK

Phoenix Life Holdings Ltd of the UK acquired Abbey Life Assurance Company of the UK

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7. Transactions in the UK by other UK companies (Jan to Dec 2016)

Domestic mergers and acquisitions (M&A) activity saw a notable rise of 63% during 2016 (400 acquisitions), a considerable increase on the low number previously recorded in 2015 (245 acquisitions) although continuing to remain at lower levels reported during the years before the 2008 to 2009 economic downturn (Figure 2A).

Of the total 400 successful domestic acquisitions, 359 (90%) involved independently-controlled UK companies, while 41 (10%) were for acquisitions of subsidiaries that were part of larger companies.

During 2016, it was notable that Quarter 2 (Apr to June) (133 deals) and Quarter 3 (July to Sept) (118 deals) saw the highest levels of domestic M&A activity, with a combined total of 251 domestic acquisitions, 63% of the total number reported in 2016. In comparison, the number of domestic acquisitions in both Quarter 1 (Jan to Mar) and Quarter 4 (Oct to Dec) reported a combined total of 149, reflecting a difference of 102 acquisitions and 37% of the total number of domestic M&A in 2016.

The total value of domestic acquisitions for 2016 was £23.9 billion, with £18.6 billion being reported between Quarter 1 (Jan to Mar) and Quarter 2 (Apr to June). The majority of this expenditure (56%) involved issues of ordinary shares, while acquisitions involving cash accounted for 42%, with the remaining 2% represented by issues of fixed-interest securities (Table 9).

The highest quarterly value of domestic M&A was seen in Quarter 1 (Jan to Mar) 2016, at £11.9 billion; a small number of successful acquisitions with values over £100 million accounted for the majority of this.

Figure 2A: Value and number of acquisitions of UK companies by other UK companies, 1987 to 2016

Source: Office for National Statistics

Notes:
  1. At Quarter 1 2010 the deal identification threshold for the mergers and acquisitions surveys was raised from £0.1 million to £1.0 million. There is therefore a discontinuity in the number of transactions reported as illustrated above.
  2. All values are at current prices (see Background Notes for definition).

Download this chart Figure 2A: Value and number of acquisitions of UK companies by other UK companies, 1987 to 2016

Image .csv .xls

It is possible to split out the number of domestic M&A into those made by independently-controlled companies and those that are by subsidiaries. The acquisition of an independent company means the purchase of a company in its entirety, whereas the acquisition of a subsidiary means the purchase of only a part of a company, between 50.1% and 100%.

During 2016, there were 359 acquisitions of UK independently-controlled companies worth £10.5 billion, compared with 194 acquisitions valued at £4.6 billion reported in 2015 (Figure 3A).

The number of acquisitions for domestic subsidiaries in 2016 decreased slightly by 10 transactions reporting 41 successful acquisitions, compared with 51 reported in 2015. In comparison the value for acquisitions of domestic subsidiaries saw an increase, reporting £13.4 billion worth of M&A compared with £2.3 billion previously reported during 2015.

Figure 3A: Summary of mergers and acquisitions in the UK by UK companies, 1987 to 2016

Source: Office for National Statistics

Download this chart Figure 3A: Summary of mergers and acquisitions in the UK by UK companies, 1987 to 2016

Image .csv .xls

Other notable domestic acquisitions, valued at £100 million or more, that took place during 2016:

Quarter 1 2016

BT Group Plc of the UK acquired EE Ltd of the UK

ITV Plc of the UK acquired UTV Ltd of the UK

Quarter 2 2016

Liberty Global Plc of the UK acquired Cable and Wireless Communications Plc of the UK

Just Retirement Group Plc of the UK acquired Partnership Assurance Group Plc of the UK

Ventura Group Plc of the UK acquired Skyepharma Plc of the UK

Non Standard Finance Plc of the UK acquired Everyday Loans Group of the UK

Centrica Plc of the UK acquired ENER-G Cogen International Ltd of the UK

Quarter 3 2016

J Sainsbury Plc of the UK’s acquired Home Retail Group Plc of the UK

RPC Group Plc of the UK acquired British Polythene Industries Plc of the UK

Midlothian Capital Partners and Hattington Capital LLP of the UK acquired Dobbies Garden Centres Ltd of the UK

BCA Marketplace Plc of the UK acquired Paragon Automotive Ltd of the UK

Spectris Plc of the UK acquired Millbrook Group Ltd of the UK

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8. Transactions in the UK by foreign companies (Quarter 4 Oct to Dec 2016)

Inward mergers and acquisitions (M&A) activity saw a notable increase in the value of successful transactions during Quarter 4 (Oct to Dec) 2016.

During Quarter 4 2016, the estimates for the number of successful inward M&A involving a change of majority ownership (37 deals) saw a 43% fall in the number when compared with the previous number reported in Quarter 3 (July to Sept) 2016 (65 deals). However, the value of completed M&A during Quarter 4 2016 reached a record high of £83.3 billion (Figure 4).

One large publically reported majority share transaction that completed during Quarter 4 2016 was the takeover of SABMiller Plc of the UK, which was acquired by Anheuser-Busch InBev of Belgium. This large transaction accounted for 95% of the total value of inward M&A (£83.3 billion) reported in Quarter 4 2016.

Figure 4: Value and number of acquisitions in the UK by foreign companies, Quarter 1 (Jan to Mar) 2006 to Quarter 4 (Oct to Dec) 2016

Source: Office for National Statistics

Notes:
  1. At Quarter 1 2010, the deal identification threshold for the mergers and acquisitions surveys was raised from £0.1 million to £1.0 million. There is therefore a discontinuity in the number of transactions reported as illustrated in the figure.
  2. All values are at current prices (See Background notes).

Download this chart Figure 4: Value and number of acquisitions in the UK by foreign companies, Quarter 1 (Jan to Mar) 2006 to Quarter 4 (Oct to Dec) 2016

Image .csv .xls

The following inward transactions, valued at £100 million or more, took place during Quarter 4 2016:

PW Real Estate Fund 111 LP of Jersey acquired Pinewood Group Plc of the UK

GAM Holding AG of Switzerland acquired Cantab Partners LLP of the UK

EQT Services (UK) Ltd of the Netherlands acquired GB Railfreight Ltd of the UK

Warburg-Storagemart Partners LP of the USA acquired BBSC Ton Ltd of the UK

Deutsche Post AG of Germany acquired UK Mail Group plc of the UK

Deutsche Bank AG of Germany disposed of Abbey Life Assurance Company Ltd of the UK

Avnet Inc of the USA acquired Premier Farnell PLC of the UK

Coty Inc. of the USA acquired GHD Group Holdings Ltd of the UK

Famous Brands Ltd of South Africa acquired Gourmet Burger Kitchen Restaurants Ltd of the UK

Hydra Industries Acquisition Corp of the USA acquired DMWSL 633 Ltd of the UK

Phoenix Life Holdings of Cayman Islands acquired AXA Sunlife Business and Wealth

Groupe Eurotunnel SAS of France sold GB Railfreight Ltd of the UK

AXA SA of France sold Sunlife Business and AXA Wealth of the UK

There were 7 completed inward disposals worth £2.6 billion during Quarter 4 2016, which was similar to the number and value reported in Quarter 2 (Apr to June) 2015 (10 disposals valued at £2.4 billion).

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9. Transactions in the UK by foreign companies (Jan to Dec 2016)

The number and value of successful acquisitions of UK companies by foreign companies (inward mergers and acquisitions (M&A)) saw a considerable increase in both levels and value of M&A activity during 2016.

The comparison of annual trends for inward M&A shows that the estimate for the number of completed UK acquisitions in 2016 (227) was similar to that seen during 2010 and 2011 when the numbers of acquisitions were 212 and 237 respectively. Since 1988, inward M&A activity increased steadily until reaching a peak in 1993 before seeing a flat trend developing even though the amount of activity has been cyclical (Figure 4A).

The reported value of inward M&A increased notably in 2016, reaching a total of £187.4 billion – the highest since our records first began in 1969. While M&A figures have historically been volatile, the 2016 value was substantially larger than the previous high recorded in 2007 (£82.1 billion) and the value recorded in 2015 (£33.3 billion).

During 2016, the number of disposals of UK companies by foreign companies involving a change in majority ownership, saw a 17% decrease of activity when compared with 2015, totalling 29 disposals valued at £4.8 billion.

Figure 4A: Value and number of acquisitions in the UK by foreign companies, 1987 to 2016

Source: Office for National Statistics

Notes:
  1. At Quarter 1 2010 the deal identification threshold for the mergers and acquisitions surveys was raised from £0.1 million to £1.0 million. There is therefore a discontinuity in the number of transactions reported as illustrated above.
  2. All values are at current prices (see Background Notes for definition).

Download this chart Figure 4A: Value and number of acquisitions in the UK by foreign companies, 1987 to 2016

Image .csv .xls

Other inward notable transactions, valued at £100 million, which took place during 2016:

Quarter 1 2016

Royal Dutch Shell of the Netherlands acquired BG Group Plc of the UK

Paddy Power Plc of Ireland acquired Betfair Group Plc of the UK

Mitsui Sumitomo Insurance Company Ltd of Japan acquired Amlin Plc of the UK

Equinix Inc of the USA acquired Telecity Group Plc of the UK

Nippon Koei Co Ltd of Japan acquired BDP Holdings Ltd of the UK

Arris International Plc of the USA acquired Pace Plc of the UK

Acadia Healthcare Company Inc of the USA acquired Priory Group No 1 Ltd of the UK

Wesfarmers Ltd of Australia acquired the Homebase business of Home Retail Group Plc of the UK

Regent Pacific Group Ltd of the Cayman Islands acquired Plethora Solutions Holdings Plc of the UK

Adecco SA of Switzerland acquired Penna Consulting Plc of the UK

Advent International GPE VI Limited Partnership of the Cayman Islands sold Priory Group No 1 Ltd of the UK

Quarter 2 2016

Ball Corporation of the USA acquired Rexam Plc of the UK

CSC Computer Science International Holdings Ltd of the USA acquired Xchanging Plc of the UK

Jahwa Group Co Ltd of China acquired Mayborn Group Plc

Yokogawa Electric Corporation of Japan acquired KBC Advanced Technologies Plc of the UK

Accor SA of France acquired Onefinestay

Addeco S.A of Switzerland acquired Penna Consulting Plc of the UK

Quarter 3 2016

SoftBank Group Corp of Japan acquired ARM Holdings Plc of the UK

Groupe Fnac SA of France acquired Darty Plc of the UK

Steinhoff International Holdings NV of the Netherlands acquired Poundland Group Plc of the UK

Jones Laing LaSalle Inc of the USA acquired Integral UK Holdings Ltd of the UK

Invest Corp of Bahrain disposed of Crisps Topco (Tyrells) of the UK

Amplify Snack Brand Inc of the USA acquired Crisps Topco (Tyrells) of the UK

News Corporation of the USA acquired Wireless Plc of the UK

During 2016, the number of successful inward M&A acquisitions (227) reported was broadly in line with the number reported in 2011 (237); the Americas (92) and Europe (93) were just 2 continents that showed increases year-on-year, of 26% and 94% respectively (Figure 5). The value of inward acquisitions saw a considerable increase between 2015 and 2016 of £154.1 million; the majority of this increase was seen in Europe with £126.0 billion reported during 2016 compared with £7.8 billion in 2015.

Figure 5: Area analysis of acquisitions in the UK by foreign companies, 2005 to 2016

Source: Office for National Statistics

Download this chart Figure 5: Area analysis of acquisitions in the UK by foreign companies, 2005 to 2016

Image .csv .xls

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10. Transactions abroad by UK companies (Quarter 4 Oct to Dec 2016)

The number and value of outward mergers and acquisitions (M&A) fell during the fourth quarter (Oct to Dec) 2016.

The number of completed acquisitions abroad by UK companies stayed consistent between Quarter 1 (Jan to Mar) 2016 and Quarter 3 (July to Sept) 2016, continuing to show relatively low levels of outward M&A activity.

In Quarter 4 2016, there was a 73% fall in the number of acquisitions abroad (13) made by UK companies, compared with Quarter 3 2016 (49). The number of successful outward M&A reported in Quarter 4 2016 is similar to the levels of outward M&A activity previously seen in Quarter 2 (Apr to June) 2013 (13) and Quarter 4 2013 (11) (Figure 6).

During the fourth quarter of 2016, UK companies spent £3.1 billion on acquisitions of foreign companies abroad, a similar value as reported in Quarter 3 2016 (£3.1 billion), but 64% lower than the value previously reported in Quarter 1 (Jan to Mar) 2016 (£8.6 billion).

Figure 6: Value and number of acquisitions abroad by UK companies, Quarter 1 (Jan to Mar) 2006 to Quarter 4 (Oct to Dec) 2016

Source: Office for National Statistics

Notes:
  1. At Quarter 1 2010, the deal identification threshold for the mergers and acquisitions surveys was raised from £0.1 million to £1.0 million. There is therefore a discontinuity in the number of transactions reported as illustrated in the figure.
  2. All values are at current prices (See Background notes).
  3. .. Denotes disclosive figures.

Download this chart Figure 6: Value and number of acquisitions abroad by UK companies, Quarter 1 (Jan to Mar) 2006 to Quarter 4 (Oct to Dec) 2016

Image .csv .xls

The following outward notable transactions, valued at £100 million or more, took place during Quarter 4 2016:

Centrica Plc of the UK acquired Neas Energy A/S of Denmark

Unilever PLC of the UK acquires Seventh Generation Inc of the USA.

Ladbrokes Plc of the UK acquired Gala Coral Group Limited of Jersey

Informa PLC of the UK acquired Penton Information Services of the USA

Management Consulting Group Plc disposed of KMCG US Holdings Inc of the USA

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11. Transactions abroad by UK companies (Jan to Dec 2016)

Successful outward mergers and acquisitions (M&A) activity experienced a notable downturn during 2016 for both the number and value of acquisitions involving a change of majority share ownership.

There were 135 successful outward M&A for the whole of 2016. This shows a decrease of 35 compared with the 170 acquisitions recorded in 2015; a year-on-year fall of 21%. With the exception of 2015, the levels of outward M&A activity have continued to fall since 2011 when 286 completed outward acquisitions were reported (Figure 6A).

The total value of completed acquisitions made abroad by UK companies for the whole of 2016 was £16.7 billion, similar to the value of £17.9 billion reported for 2012. The highest recorded outward M&A value of £181.0 billion was in 2000. The subsequent years saw a decrease in the value of outward M&A to £10.1 billion in 2009. In 2010, there was a slight increase in the value of outward acquisitions to £12.4 billion and a larger increase to £50.2 billion in 2011. Year-on-year comparison shows that the value of completed outward M&A between 2015 (£25.6 billion) and 2016 (£16.7 billion) has fallen by 35%.

Figure 6A: Value and number of acquisitions abroad by UK companies, 1987 to 2016

Source: Office for National Statistics

Notes:
  1. At Quarter 1 2010 the deal identification threshold for the mergers and acquisitions surveys was raised from £0.1 million to £1.0 million. There is therefore a discontinuity in the number of transactions reported as illustrated above.
  2. All values are at current prices (see Background Notes for definition).
  3. .. Denotes disclosive figures.

Download this chart Figure 6A: Value and number of acquisitions abroad by UK companies, 1987 to 2016

Image .csv .xls

Other outward M&A notable transactions, valued at £100 million, which took place during 2016:

Quarter 1 2016

Astra Zenca Plc of the UK acquired majority stake in Acerta Pharma of the Netherlands

BBA Aviation Plc of the UK acquired Landmark Aviation of the USA

Hikma Pharmaceuticals Plc of the UK acquired Roxane Laboratories Inc and Boehringer Ingelheim Roxane Inc of the USA

NMC Health Plc of the UK acquired majority stake in Fakih IVF Group of the United Arab Emirates

RPC Group Plc of the UK acquired Global Closure Systems of France

Smith and Nephew of the UK acquired Bluebelt Holdings Inc of the USA

Premier Farnell Plc of the UK disposed of Akron Brass Holding Corp of the USA

Diageo Plc of the UK disposed of Diageo Chateau and Estate Wines Company of the USA

Quarter 2 2016

Dechra Pharmaceuticals Plc of the UK acquired Putney Inc of the USA

W S Atkins Plc of the UK acquired Projects Products and Technology Division of Energy Solutions of the USA

Micro Focus International Plc acquired Spartacus Acquisition Holding Corp of the USA

Bridgepoint and Summit Partners of the UK acquired Calypso Technology Inc of the USA

Quarter 3 2016

Melrose Industries Plc of the UK which acquired Nortek Inc of the USA

Unilever Plc of the UK acquired Dollar Shave Club Inc of the USA

3i Group Plc of the UK acquired Schlemmer Gmbh of Germany and SIB Immobiliere of France

The quarterly estimates for the number and value of disposals of foreign companies made by UK companies abroad (outward disposals) during Quarter 3 (July to Sept) and Quarter 4 (Oct to Dec) 2016 have been suppressed in this bulletin to avoid any potential disclosure in this type of M&A activity.

Figure 7: Area Analysis of acquisitions abroad by UK companies, 2005 to 2016

Source: Office for National Statistics

Notes:
  1. .. denotes disclosive data

Download this chart Figure 7: Area Analysis of acquisitions abroad by UK companies, 2005 to 2016

Image .csv .xls

Between 2015 and 2016, successful outward M&A saw a year-on-year fall in the number of acquisitions in both Europe (61 acquisitions valued at £3.2 billion) and the Americas (49 acquisitions valued at £13 billion). The number of outward M&A in 2016 continues to remain at much lower levels than those previously reported for both continents in 2011, when Europe saw 104 acquisitions (£23.4 billion) and the Americas saw 113 acquisitions (£11.8 billion) (Figure 7).

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12. Additional information

The mergers and acquisitions (M&A) data and information published in this release only includes data for acquisitions, mergers and disposals that are successfully completed. As part of the production process we also identify announced and agreed M&A transactions. The following notable M&A will feature in future releases:

AXA of France sold Bluefin Insurance Group Ltd of the UK

Marsh and Mclennan Company Inc of the USA acquired Bluefin Insurance Group of the UK

British United Provident Association of the UK acquires Oasis Dental Care

RPC Group PLC of the UK acquired Letica Group of the USA

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13. How our statistics compare with external evidence

Our estimates for domestic and cross-border mergers and acquisitions, during Quarter 4 (Oct to Dec) 2016 and for 2016 as a whole, appear to be in line with the views of some external commentators.

Global merger, acquisitions and disposals activity can be driven by the availability of credit. Therefore, when credit conditions deteriorate, as happened in the 2008 to 2009 economic downturn, mergers and acquisitions (M&A) activity declines. M&A activity can also be interpreted by the economic outlook and company profits, in addition to a range of other economic factors. The process of completing an M&A transaction takes time and sometimes there may be a lag between improving economic conditions and any increase in M&A activity.

The Bank of England (BoE) Credit Conditions Review – Quarter 4 2016 reported that the overall demand for corporate lending from small and medium-sized businesses decreased significantly in Quarter 4 2016. Significant reductions in capital investment and commercial real estate were reported to be the main factors contributing to the changes in corporate lending demand in Quarter 4 2016, while mergers and acquisitions activity had pushed up on demand.

The Bank of England Agents Summary of business conditions – Quarter 4 2016 stated that professional services contacts had reported that mergers and acquisitions and foreign direct investment activity had picked up. However, both remained weaker than before the referendum.

Deloitte’s US/UK Deal Monitor, 2H 2016 publication reported that the UK remains highly attractive for US dealmakers as the rate of US deal making in the UK has been strong in the second half of 2016. However, some UK dealmakers have put M&A on hold.

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14. Quality and methodology

The Mergers and acquisitions Quality and Methodology Information document contains important information on:

  • the strengths and limitations of the data and how it compares with related data
  • users and uses of the data
  • how the output was created
  • the quality of the output including the accuracy of the data
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.Background notes

  1. Overview of mergers and acquisitions

    The mergers and acquisitions (M&A) estimates are analysed and produced to measure investment data for:

    • investment in the UK by UK companies (domestic investment)
    • investment or disinvestment in the UK by foreign companies (inward investment or disinvestment
    • investment or disinvestment in foreign companies by UK companies (outward investment or disinvestment)

    M&A data are essential for producing the UK National Accounts. The survey results form important components of the UK Balance of Payments and Financial Accounts and are vital in the measurement of the financial and non-financial business sector accounts. M&A data is used in the compilation of the estimates for foreign direct investment and additionally used by other government departments when preparing ministerial briefings. For example, HM Treasury, the Department for Business, Energy and Industrial Strategy, UK Trade and Investment and HM Revenue and Customs. The M&A data estimates are also used by foreign embassies, economists and academics for research purposes and for periodic statistical comparisons.

  2. Relevance to users

    The degree to which the statistical outputs meet users’ needs.

    The mergers and acquisitions data are considered to be essential for producing the UK National Accounts. The survey results form important components of the UK Balance of Payments and Financial Accounts and are vital in the measurement of the financial and non-financial business sector accounts.

    The Cross-Borders Acquisitions and Mergers Survey (M&A) data are used in the compilation of the estimates of foreign direct investment (FDI). These data meet the needs of FDI by collecting data on all acquisitions which lead to a holding in excess of 10% of the issued share capital. These estimates then feed into the UK Balance of Payments and the “Rest of the World” sector of the financial accounts in the national accounts, for which there is an EU legal requirement. Individual transaction information is also used to estimate the counterpart in “portfolio” investment flows for monthly balance of payments.

    The data collected are also used in updating business structures and country of ownership codes on the Inter-Departmental Business Register (IDBR).The IDBR is a comprehensive list of UK businesses that is used by government for statistical purposes.

    Elsewhere in government, examples of departments who use the data include:

    • HM Treasury, Economic Analysis Division, where the data are used in preparing briefing and forecasting
    • Department for Business, Energy and Industrial Strategy, where direct investment data are required for ministerial briefing, parliamentary questions and in formulating trade policy
    • UK Trade and Investment, where the information is used for briefing on the extent to which the UK is successful in attracting inward investment
    • HM Revenue and Customs, where the data are used to help in forecasting company taxation

    Non-government users include:

    • private companies which are interested in analysing country and industry data for trends by foreign firms in the UK and by UK companies abroad and also for researching corporate finance activity and for the purpose of investment banking
    • UK embassies in foreign countries, who are interested in information on specific countries and companies making acquisitions
    • private sector economists, journalists and academics who are interested in information on particular industries and particular countries for research purposes and who use the data for periodic statistical comparisons

    Feedback from users has indicated that the information received from the M&A survey has a high degree of relevance across the above user groups, meets the vast majority of user needs, and all information currently collected and published is used.

    Source of data

    The information collected is based on reports in the financial press, specialist magazines, company and financial websites supplemented by special surveys to businesses to determine the form, value and timing of each transaction.

    If the information is not yet in the public domain, such transactions may not be reflected in the analysis. Where full information has not yet been received on the details of the acquisition or disposal, the value of the transaction indicated in the public domain is used as an interim estimate.

    The data shown in this release relate solely to mergers and acquisitions undertaken by companies: acquisitions by individuals are not included.

    This publication contains data relating mergers, demergers, acquisitions and disposals. Figures relating to mergers are included within acquisitions and those relating to demergers are contained within disposals.

    We make every effort to provide informative commentary on the data in this release. As part of the quality assurance process, individual businesses are contacted in an attempt to capture reasons for large period-on-period data movements. It can prove difficult to gather detailed reasons from some businesses to help inform the commentary. Frequently, reasons given for data movements refer to a “change in market conditions” or a “restructure of the company”. Consequently, it’s not possible for all data movements to be fully explained.

    We are aware that a number of users make use of these data for modelling or forecasting purposes. In doing so, it is important that users make note of our revisions policy and that all time series are on a “current price” basis, which means that the values are as they were at the time of measurement and not adjusted for inflation. Acquisitions and disposal activity can be affected by UK and global economic and political issues and therefore quarterly estimates can be volatile.

    One question often asked of the M&A release is “why is there a time delay between the announcement of M&A transactions in the press and the inclusion of these transactions within ONS M&A figures?“ The difference is that our figures record when a transaction legally completes as opposed to when the transaction has been announced in the press. The complexities surrounding the acquisitions or disposals taking place often incurs a time lag, which can vary between quarters.

  3. Significant transactions

    Significant transactions tables show the reported figures for a selection of significant transactions which occurred in the quarter, where “significance” is defined as the absolute value of the deal.

    The information shown is taken from each relevant company’s press release, which is available within the public domain. A direct link to each press release is provided. Should a company request that details of the transaction be kept confidential then the deal is excluded. However, the values are included in the aggregate tables. Occasionally, therefore, a large deal may be missing (suppressed) from the lists so it is best to regard these tables as an indication of the ranking of deals rather than a completely exhaustive listing.

    Press-reported figures for M&A transactions often differ to some extent from those supplied by companies to us and it is the latter that are used in compiling statistical aggregates in Tables 1 to 10. Included in the prices quoted in the tables of significant transactions is the total published price paid for the company excluding any assumed debt where known. Deferred payments are included in the reported price even if the payment is made in a different quarter.

  4. Types of transactions covered

    Mergers are acquisitions in which all or part of the payment is made in shares, such that the shareholders of the 2 companies become shareholders of a new, combined company group.

    Demergers are disposals where a company group divides into 2 or more separate companies, in such a way that the shareholders of the restructured companies remain the same, or retain the equivalent value shareholding in one of the newly independent companies. Demergers are included in the statistics within disposals.

    Acquisitions are transactions that involve one company purchasing the ordinary shares of a second company (“target company”). A target company is usually of a smaller size than the company undertaking the purchase.

    Disposal is a term used to describe the action when a company or organisation sells or liquidates the ordinary shares of a second company (“target company”).

    Cross-border acquisitions denote transactions where a company in one country acquires, either directly or indirectly, a controlling interest in a company in another country.

    Direct transactions are those where a company acquires a controlling interest in another company.

    Indirect transactions are those where a company uses an existing foreign subsidiary to acquire a controlling interest in a company resident in another country. The acquiring foreign intermediate company may be located in the same country in which the acquisition is being made or in a different country.

    Acquisitions within the UK by other UK companies denote mergers and acquisitions involving only UK registered companies.

    Where the acquired company was a subsidiary of another company the transaction is classified as a sale between company groups.

    The phrase “acquisitions in the UK by UK companies” refers to deals where the ultimate ownership remains in the UK. This heading does not cover the total number or value of deals where a UK company is the acquirer. When a foreign company acquires a UK company through one of its existing UK subsidiaries or a UK registered special purpose vehicle that deal is shown as part of the data under “acquisitions in the UK by foreign companies”.

    Acquisition of independent companies

    The acquisition of an independent company means the purchase of a company in its entirety – the company itself and all of its subsidiaries.

    Acquisition of subsidiary companies

    The acquisition of a subsidiary company means the purchase of part of a company.

  5. Financing

    This statistical bulletin provides details of the application of funds to effect mergers and acquisitions and the proceeds raised from disinvestments and demergers.

    For indirect foreign transactions there is the added complication of considering the movements of funds either as capital injection or in the form of loans between parent companies and their foreign subsidiaries making the acquisition. Occasionally, the foreign subsidiary obtains the funds required partly or entirely outside the UK from sources such as:

    • own resources
    • borrowing from banks and other local sources
    • share, bond and other capital or notes issued abroad

    Also, a transaction may be funded by more than one method.

  6. Definitions of geographic and economic areas

    Table 2: Definition of geographic and economic areas

    Europe 
    EUAustriaBelgiumBulgariaCroatia
    CyprusCzech RepublicDenmarkEstonia
    FinlandFranceGermanyGreece
    HungaryIrish RepublicItalyLatvia
    LithuaniaLuxembourgMaltaNetherlands
    PolandPortugalRomaniaSlovakia
    SloveniaSpainSweden 
    Other European CountriesAlbaniaAndorraBelarusBosnia and Herzegovina
    Faroe IslandsGibraltarIcelandKosov
    LiechtensteinMacedonia, the Former Yugoslav Republic ofMoldovaMontenegro 
    NorwayRussian FederationSan MarinoSerbia 
    SwitzerlandTurkeyUkraineUK Offshore Islands (Guernsey, Jersey, other Channel Islands & Isle of Man) 
    Vatican City State   
     
    The Americas
    AnguillaAntigua & BarbudaArgentinaArubaBahamas
    BarbadosBelizeBermudaBoliviaBonaire, Sint Eustatius & Saba
    BrazilBritish Virgin IslandsCanadaCayman IslandsChile
    ColombiaCosta RicaCubaCuracaoDominica
    Dominican RepublicEcuadorEl SalvadorFalkland IslandsGreenland
    GrenadaGuatemalaGuyanaHaitiHonduras
    JamaicaMexicoMontserratNicaraguaPanama
    ParaguayPeruSt Kitts & NevisSaint LuciaSint Maarten
    St Vincent & the GrenadinesSurinameTrinidad & TobagoTurks & Caicos IslandsUruguay
    US Virgin IslandsUSAVenezuela  
    Asia
    AfghanistanArmeniaAzerbaijanBahrainBangladesh
    BhutanBrunei DarussalamBurma/MyanmarCambodiaChina
    GeorgiaHong KongIndiaIndonesiaIran
    IraqIsraelJapanJordanKazakhstan
    KuwaitKyrgyzstanLaosLebanonMacao
    MalaysiaMaldivesMongoliaNepalNorth Korea
    OmanPakistanPalestinian TerritoryPhilippinesQatar
    Saudi ArabiaSingaporeSouth KoreaSri LankaSyria
    TaiwanTajikistanThailandTimor - LesteTurkmenistan
    United Arab EmiratesUzbekistanViet NamYemen 
    Australasia & Oceania
    American SamoaAntarcticaAustraliaBouvet IslandChristmas Island
    Cocos (Keeling) IslandsCook IslandsFrench PolynesiaFrench Southern & Antarctic LandsFiji
    GuamHeard Island & Macdonald IslandsKiribatiMarshall IslandsMicronesia, Federated States of
    NauruNew CaledoniaNew ZealandNiueNorfolk Island
    Northern Mariana IslandsPalauPapua New GuineaPitcairnSamoa
    Solomon IslandsSouth Georgia & South Sandwich IslandsTokelauTongaTuvalu
    US Minor Outlying IslandsVanuatuWallis & Futuna  
    Africa
    AlgeriaAngolaBeninBotswanaBritish Indian Ocean Territory
    Burkina FasoBurundiCameroonCape VerdeCentral African Republic
    ChadComorosCongoDemocratic Republic of the Congo (Zaire)Djibouti
    EgyptEquatorial GuineaEritreaEthiopiaGabon
    GambiaGhanaGuineaGuinea BissauIvory Coast (Cote d'Ivoire)
    KenyaLesothoLiberiaLibyaMadagascar
    MalawiMaliMauritaniaMauritiusMorocco
    MozambiqueNamibiaNigerNigeriaRwanda
    Sao Tome & PrincipeSenegalSeychellesSierra LeoneSomalia
    South AfricaSouth SudanSt Helena, Ascension & Tristan da CunhaSudanSwaziland
    TanzaniaTogoTunisiaUgandaZambia
    Zimbabwe    
    Source: Office for National Statistics

    Download this table Table 2: Definition of geographic and economic areas

    .xls (32.8 kB)

  7. Revisions

    Data for the first, second and third quarters of 2016 has been revised in the light of new information, and so revisions to the data for Quarter 1 (Jan to Mar) 2016, Quarter 2 (Apr to June) 2016 and Quarter 3 (July to Sept) have been published in this statistical bulletin. No further revisions to data prior to Quarter 1 2016 have been made. Therefore time series data for all quarters of 2015 and any previous historic quarterly periods remain unchanged.

    Annual data tables for 2016 are produced in conjunction with the Quarter 4 (Oct to Dec) 2016 and Quarter 1 (Jan to Mar) 2017 data outputs. Revisions to the 2016 quarterly and annual figures will be recalculated at Quarter 1 2017 only. Therefore no revisions to annual data prior to 2016 have been made and subsequently time series data for previous historic annual periods remains unchanged.

    Revisions to the aggregates used in M&A principally occur for the following reasons.

    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 respondents

    Very occasionally respondents revise the values that they have previously supplied to us. The revised values are those used to create the aggregates.

    Table 3: Average revisions by number, Quarter 3 (July to Sept) 2016

     First Published Value (Quarter 3 2016)Number in Latest Revised Period (Quarter 4 2016)Average Revision (Quarter 3 2015 to Quarter 3 2016)
    Number of Outward Acquisitions 274919
    Number of Outward Disposals ""7
    Number of Inward Acquisitions 416522
    Number of Inward Disposals "64
    Number of Domestic Acquisitions 7211847
    Source: Office for National Statistics
    Notes:
    1. Quarter 3 is Jul to Sep 2016, Quarter 4 is Oct to Dec 2016
    2. * Significant Revision
    3. " Suppressed

    Download this table Table 3: Average revisions by number, Quarter 3 (July to Sept) 2016

    .xls (25.1 kB)

    Table 4: Average revisions by value, Quarter 3 (July to Sept) 2016

     First Published Value (Quarter 3 2016)Value in Latest Revised Period (Quarter 4 2016)Average Revision (Quarter 3 2015 to Quarter 3 2016)Average without Regard to Sign (Quarter 3 2015 to Quarter 3 2016)
    Value of Outward Acquisitions 2,4413,140924924
    Value of Outward Disposals ""1,3951,395
    Value of Inward Acquisitions28,38630,998-4062,320
    Value of Inward Disposals "937326326
    Value of Domestic Acquisitions3,2033,414361361
    Source: Office for National Statistics
    Notes:
    1. Quarter 3 is Jul to Sep 2016, Quarter 4 is Oct to Dec 2016
    2. " Suppressed
    3. * Significant Revision

    Download this table Table 4: Average revisions by value, Quarter 3 (July to Sept) 2016

    .xls (25.1 kB)

    Analysing average revisions between provisional and final estimates can provide an indication of reliability in an initial statistic. Provisional statistics may be based on less information than is available for final statistics as they have been processed more quickly to meet the demand of customers. By looking at these average revisions it can help us determine whether revisions are being made consistently in one direction, that is, if early estimates are consistently under or overestimating the later figures. A test is subsequently performed on these average revisions to determine if they are statistically different from zero. Revisions that are not statistically significant imply that an average revision might be non-zero simply through random effects.

  8. Response rates

    Table 5: Response rates for Quarter 3 (July to Sept) 2016 and Quarter 4 (Oct to Dec) 2016

    Cross-Border Mergers and Acquisitions (CBAM) Outwards
    Statistics of Sample Size – Latest Survey Conducted:
    Reference PeriodQuarter 3 2016Quarter 4 2016
    Response Rate (%)90%88%
    Cross-Border Mergers and Acquisitions (CBAM) Inwards
    Statistics of Sample Size – Latest Survey Conducted:
    Reference PeriodQuarter 3 2016Quarter 4 2016
    Response Rate (%)83%75%
    Domestic Mergers and Acquisitions (DAM)
    Statistics of Sample Size – Latest Survey Conducted:
    Reference PeriodQuarter 3 2016Quarter 4 2016
    Response Rate (%)82%80%
    Source: Office for National Statistics
    Notes:
    1. Previous quarter has been revised, latest quarter is provisional.
    2. Quarter 3 is Jul to Sep 2016. Quarter 4 is Oct to Dec 2016.

    Download this table Table 5: Response rates for Quarter 3 (July to Sept) 2016 and Quarter 4 (Oct to Dec) 2016

    .xls (25.6 kB)

  9. Notes to tables

    The deal identification threshold was increased at Quarter 1 (Jan to Mar) 2010 to a value of £1.0 million from a previous value of £0.1 million. As a consequence there is a discontinuity in the value and number of deals reported from Quarter 1 2010 onwards compared with previous periods.

    Symbols used in the tables are:

    .. Figure suppressed to avoid disclosure of information relating to individual enterprises.

    – Nil or less than half the final digit shown.

    The sum of constituent items in tables may not always agree exactly with the totals shown due to rounding.

  10. Disclosure

    It is sometimes necessary to suppress figures for certain items in order to avoid disclosing information about an individual business. Further information on why data are suppressed is available in our Disclosure Control Policy.

  11. Discussing ONS Business Statistics online

    There is a Business and Trade Statistics community on the StatsUserNet website. StatsUserNet is the Royal Statistical Society’s interactive site for users of official statistics. The community objectives are to promote dialogue and share information between users and producers of official business and trade statistics about the structure, content and performance of businesses within the UK. Anyone can join the discussions by registering via either of the links.

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View all data used in this Statistical bulletin

Contact details for this Statistical bulletin

Sami Hamroush
sami.hamroush@ons.gov.uk
Telephone: +44 (0) 1633 455087