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UK-based Mergers Buck Trend

Expenditure on acquisitions by UK companies increased from £4.3 billion in quarter one 2008 to £8.7 billion in quarter two, according to the Office for National Statistics. New figures also show EU mergers in August fell by almost half.

The most significant UK transaction included the acquisition by Pearl Group of Resolution for a reported £5 billion.

Expenditure on acquisitions abroad by UK companies decreased from £15.8 billion in quarter one to £5 billion in quarter two. The net value of transactions abroad by UK companies also decreased from £15 billion in quarter one to £22 million in quarter two 2008.

Expenditure on acquisitions in the UK by foreign companies decreased from £20.7 billion in quarter one to £18.1 billion in quarter two. Significant transactions included the acquisition by The Thomson Corporation of Reuters Group Plc for a reported £8.5 billion.

The typically quiet holiday month of August decimated mergers and acquisitions activity in the EU as a whole. Deals numbering just 788, are half of 2007 levels, according to Zephyr statistics.

Deal values also fell to a year-low of 52 billion (£42.3 billion), wiping out gains made in July. With transaction volumes down 45 per cent year-on-year, values were 30 per cent lower than in August 2007.