M&A Opportunities in the UK
Expert Analysis
February, 2023
By – Jitendra Dodeja
It has been a rough week for UK Financial Markets after the Government announced the ‘Growth Plan 2022’, a mini-budget to spur economic growth. The market perceived the plan as controversial, with reactions across the board – the pound plummeting, yields rising, and the stock market crashing.
The most interesting development was with the pound, with several sources forecasting a GBP/USD parity in the long term. Whether that happens or not remains to be seen, but the recent crash, coupled with the overall devaluation seen to date, has made UK companies cheaper targets for overseas buyers.
Today, Geely Auto, a Chinese car manufacturer, acquired a 7.6% stake in Aston Martin. Last week, Biffa – UK based Waste Management company, was acquired by a US PE firm for GBP 1.3Bn. Other notable UK-targeted acquisitions include Homeserve, Go-Ahead, Stagecoach and Ted Baker.
Acquisitions are expected to continue towards firms that demonstrate a sizeable and competitive local market share or are geographically diversified with a strong international revenue stream. The sterling devaluations make these ripe for acquisitions less risky in view of the current domestic economic turmoil.
