Foreign takeovers in the UK hit record levels
Glencore's billion-pound merger with Xstrata helps push foreign spending on UK firms to six-year high
FOREIGN takeovers of UK businesses hit a six-year high during the second quarter, boosted by Glencore's takeover of Xstrata.
The Independent reports that overseas firms spent £23.4bn buying British targets during the three months to June, up from £3.5bn in the first quarter. The ONS statistics are the highest since the second quarter of 2007.
The quarterly figures were heavily skewed by Swiss-based commodity trader Glencore's acquisition of mining company Xstrata for £23.4bn in May. The deal was finally completed after months of negotiations by the two parties and regulators.
The ONS added that overall the number of transactions in the UK by foreign companies increased from 19 to 30 quarter by quarter. It said the data hinted that the mergers and acquisitions market is finally on the way to recovery."This follows a long period in which companies have focused on paying off debts, improving cash flow and restructuring their balance sheets," the ONS said.
Mark Gregory, transaction partner and Ernst & Young's chief economist, said: "It is encouraging to see that transactions in the UK by foreign acquirers have held up, and although deal numbers have fallen, deal values have increased dramatically. The numbers suggest that the UK economy is still viewed as relatively stable and domestic assets continue to attract foreign investors."
British firms remained wary of deals overseas, however, with both purchases and disposals of foreign firms at their lowest levels since records began in 1987. ·