Press release

8 Dec 2021 London, GB

UK M&A Activity Continues Apace in Q3 2021

In total, 453 inward, outward and domestic M&A deals completed during Q3, down slightly from Q2 but a sizeable increase of 128 when compared with Q3 2020. There has been robust interest from private equity which has managed to see through short-term volatility in the equity and bond markets and the well-documented challenges presented by the supply chain and energy crisis

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Steve Ivermee, UKI Strategy and Transactions Leader at EY, comments on UK M&A activity for July – September 2021, published by the ONS:

“M&A activity in the UK continued apace in the third quarter of the year, with the ONS recording £46.5bn worth of deals transacted.

“In total, 453 inward, outward and domestic M&A deals completed during Q3, down slightly from Q2 but a sizeable increase of 128 when compared with Q3 2020. There has been robust interest from private equity which has managed to see through short-term volatility in the equity and bond markets and the well-documented challenges presented by the supply chain and energy crisis.

“Outward M&A was valued at £32.8bn in the third quarter, £24.6bn higher than Q2 2021, while inward M&A reached £10.7bn, £18bn lower than in Q2 2021. Domestic M&A was valued at £3bn.

“Healthy levels of dealmaking are being driven by the desire to generate new value, unlock new opportunities and deliver efficiencies. Sustainability and ESG in particular are becoming an important aspect of dealmaking, accelerated by the recent COP26.  

“The UK remains an attractive target for inbound M&A particularly in areas it has strengths including financial services, fintech and high-end consumer and industrials. We have also seen continued activity in domestic consolidation and outbound M&A as UK companies seek to increase their global footprint.

“Looking ahead, the outlook for the final quarter of the year continues to look robust. Private equity investments are likely to continue to drive the deals market as they seek to deploy their ample dry powder. However, headwinds including the Omicron Covid variant are likely to reduce confidence in certain sectors and impact M&A activity in 2022.

“We are also seeing evidence of a shift to a new cycle of dealmaking which follows the immediate reaction to the pandemic into a more considered phase where companies are reviewing all areas of their business strategy and looking to get fit for the future.”