Overseas investment falls back to pre-pandemic levels
US investors are the biggest overseas investors with deal volumes typically double those of Germany, France and Denmark.
In H1 2024, unsurprisingly, domestic M&A deals dominated in the South East with 110 acquisitions made by other UK-headquartered businesses. Overseas acquirers were involved in 18 deals in the South East, which is 16.3% of the total. There was an uplift in overseas acquirers between 2020-2022, reaching its peak of 34.7% in 2022, but this has now fallen back to pre-pandemic levels of around 17%.
The United States is still the highest foreign acquirer in the South East, with four deals in H1 2024 involving US companies, representing 3.13% of the total. Canada, France, Denmark and Germany are in second place, each representing 1.5% of the total.
On average over the last ten years, the US has made up 7.58% of acquisitions in businesses in the South East. In line with broader trends in investment from overseas, H1 2024 shows that US acquisitions in the South East saw a lift during the pandemic and have now fallen back to pre-Covid levels.
"Cross-border M&A activity surged as the GBP weakened against the USD and EUR as UK assets became cheaper post the Brexit referendum and then during the pandemic. The UK became an attractive investment due to high-quality businesses and promising returns. With only the US elections pending, increased political stability is expected to boost M&A activity. We’ll also see if fears of tax hikes, especially capital gains tax, drive deal activity before the 30 October budget."
Salim Somjee, Partner, Corporate