Key facts
- The value of agreed takeovers of London-listed firms has reached $34.8bn in 2026.
- This represents a significant increase from the previous year's total take-private value.
- Foreign buyers are acquiring UK companies at an average premium of 36%.
- Concerns exist among bankers about the long-term consequences of selling domestic assets.
- A revival in IPOs has been hindered by market volatility and AI's impact on tech firms.
- The upcoming change in Prime Minister is expected to accelerate M&A activity.
The London takeover market is experiencing a significant acceleration, with the value of agreed take-private deals soaring to $34.8bn this year, nearly double the total from the previous year. This surge is driven by foreign buyers acquiring UK companies, often at substantial premiums of around 36%, with some deals like Intertek and Beazley going through at approximately 60% above market price.
Despite the activity, a mood of uncertainty prevails among London's financial professionals. Bankers are concerned about the long-term implications of selling off domestic assets, likening it to "selling the family silver" without a clear plan for rebuilding wealth. This trend is exacerbated by a lack of new companies listing on the stock exchange, leading to a perceived 'draining' of the market.
Analysts attribute the exodus of companies to years of outflows from UK equity funds and sluggish valuations. While there have been tentative signs of a turnaround, with UK equity funds seeing their first net inflows since November 2024, City figures emphasize that the trend of foreign takeovers will continue unless domestic investors increase their backing of homegrown firms.
Suggestions have been made to use the tax system to encourage domestic investment, with Andy Haldane, chair of the British Chamber of Commerce, advocating for a "tilting of the playing field." The government has already faced pressure regarding mandates for pension funds to invest in British companies.
Looking ahead, bankers hope a wave of new listings after the summer, including Waterstones, fintech firm SumUp, and Indian payments company Airtel Money, could help revitalize the market. However, IPO plans for companies like Visma and Love Holidays have been postponed due to global market volatility, including the war in Iran and concerns about AI's impact on tech stocks.
Experts predict the takeover spree will intensify, partly due to the impending change of Prime Minister, which may prompt companies to act before new policies are introduced. Patrick Sarch of White & Case noted that "Things are going to get worse before they get even worse than that," suggesting a motivation to complete deals sooner rather than later. Conversely, Gareth McCartney of UBS views the deal offensive as a "vote of confidence in the long-term UK macro outlook."