May 28, 2024
Despite the M&A value in the UK dropping to record lows at the start of 2023, the report showed that the first quarter of 2024 has seen an upturn of 24% in the value of large-deals which brought the total value of UK deals to £68bn; more than £40bn above the deals announced in the opening quarter of 2023. These figures signal a growing appetite especially for strategic corporate transactions.
How do these figures compare to 2023?
Despite high value figures, transaction volumes in the UK have remained low in historic terms, with a decline of 22% in transactions, from 1,671 in the first quarter of 2023 to 1,307 in the first quarter of 2024. However, the lag in reporting of deals means that this figure may increase as the year progresses.
M&A Activity across the UK
Thus far in 2024, corporate activity has trumped private equity in the UK as corporate acquisitions accounted for 57% of the UK market. According to Experian, the bigger acquisitions compromised of a £7.8bn takeover in the packaging sector, with DS Smith agreed to an all-share offer from International Paper Co.
M&A Activity in Wales
Akin to the trend throughout the UK, Wales’ M&A activity saw a decrease in the volume of deals compared to the corresponding period last year, however, the value of these transactions is at its highest for an opening quarter over the last decade. The main source of deal activity in the first quarter of 2024 were corporate acquirors, constituting around 67% of deals in Wales.
Wales saw one of the largest transactions ever recorded, valued at over £2.5bn. This all-share deal was signed by Barratt Developments, a residential property developer who acquired the entire issued and to be issued ordinary share capital of Redrow, the St David’s Park-based residential and commercial property developer. This deal has been recorded as the second biggest Welsh deal on Experian record.
The manufacturing, wholesale, and retail sectors continued to dominate the Welsh deal landscape, while the real estate and utilities industries also reported year-on-year growth.
Can we anticipate the momentum to continue for the rest of 2024?
Ongoing global geopolitical tensions and the recently announced general election in the UK will no doubt add an element of caution into M&A activity trends for the next quarter of 2024. However, the M&A market has entered a new phase in 2024 that has already differed from prior ones. The increase in deal value, combined with strong growth in certain sectors, could be a catalyst to boost optimism for M&A activity throughout the remainder of 2024.
If you are considering buying or selling a business in 2024, contact Emily Shingler on 02920829102 or eshingler@darwingray.com for a free initial chat to see how we can help you.
M&A transaction statistics provided by Experian MarketIQ: Q1 2024 report.
