Home Estate Planning UK M&A deals sink in 2023 as private equity surges

UK M&A deals sink in 2023 as private equity surges

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UK Mergers and Acquisitions (M&A) fell sharply last year, declining by 17 per cent compared to a global decline of just six per cent.

In total, the UK saw 3,628 M&A deals across 2023, compared to 4,362 the previous year, though this was still around pre-pandemic levels, data from PwC has revealed.

In the second half of 2023, £46bn of UK M&A deals went through, rising slightly from £42bn in the first half of the year and bringing the total deal value for 2023 to £88bn.

This means that the total deal value was down 41 per cent compared to the almost £150bn of deals seen in 2021.

While the majority of UK M&A deals last year were led by corporates, the number of deals involving private equity reached its highest level at 42 per cent, up five per cent from 2022 and an increase of 13 per cent over the last five years.

The technology, media and telecommunications sector saw the most activity for 2023 at 955 M&A deals, accounting for just over a quarter of total output for the year.

Industrial manufacturing and automotive followed with 899 deals and also saw the most deal activity in the second half of the year with 390 deals announced.

In terms of value, the energy, utilities and resources industry saw deals with the highest value in 2023 with a total just over £18bn worth of transactions, but this was still down from £24bn in the year before.

Financial services came second with just under £18bn of deals, halved from 2022, while health industries saw an 80 per cent rise to £15bn.

Despite the sharp drop in total value from financial services, the sector recorded a ten-year high in the number of transactions in the first half of 2023, totalling 160.

One of the largest last year was the merger of Investec’s wealth arm with Rathbones, creating a £100bn wealth manager. Another example, decidedly smaller, was HSBC’s purchase of Silicon Valley Bank UK for just £1.

Tim Allen, deals industries and international leader at PwC UK, said: “Companies’ needing to add new technology capabilities, such as Generative AI, are driving deal volumes in the TMT sector whilst energy transition across the board is supporting activity in the energy, utilities and resources sector. The healthcare industry has also proven resilient.”

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