Overseas investors can boost the region in 2013, says Paul Lupton of Deloitte
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 Paul Lupton, Corporate Finance Partner, Deloitte, North West
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AS business advisers in the North West, we have enjoyed watching the region grow in significance in the past decade. Year on year, the North West is consistently the most active region for M&A outside London. Until now, though, it has not always been easy to gauge how foreign investors view the North West. Here in the region we like to assume that outsiders recognise our world-class manufacturing base, our heritage of innovation and excellence in professional services. Research from Deloitte in the North West last month revealed that in 2012, non-UK investors spent £1.15billion on deals in the region, proving beyond doubt that overseas investors do recognise these strengths. Looking further at the inbound data, what does it tell us? The first, is that this £1.15 billion was spread across 52 transactions rather than one single deal, representing on average a deal each week, and a very broad range of transaction sizes. Secondly, the transactions took place across several key sectors, including manufacturing, technology, food and drink, pharmaceuticals and services. It is important that the North West is strong in a range of industries. This data suggests that. A third observation is that much of the investment is coming from markets we know well. Of those 52 deals worth £1.15billion, 58% (30 deals) were from the US and Europe, while other countries in the data for deal origination included India (three transactions), Japan (two) and Turkey, Australia and China (one each). Should we be concerned about UK assets being acquired by overseas entities? I don’t think we should. In an increasingly connected global world, companies need to play across a much broader canvas. If this involves outside ownership then we should accept that. The US sees the UK as a natural base for European operations and increasingly we expect to see other non-EU countries seeing the UK in the same light. Both China and India made acquisitions in the North West in 2012. This is significant because clearly investors in these countries – for whom a 6% annual GDP growth rate is deemed modest – recognise that the North West is a good place to invest their capital and the region is a business-friendly gateway to Europe. Investors from other fast-growing economies, like Turkey, Malaysia and UAE, also made acquisitions in the region last year. The picture reflected in Deloitte’s ‘outbound’ data, showed North West companies completed 29 transactions overseas in 2012 with a total deal value of £406million. Again, Europe and the US were the most popular destinations, but North West businesses also did deals in India, Russia and Brazil and as we look forward we expect to see UK companies investing increasingly in the high-growth BRIC economies. M&A is becoming more international and we should be pleased that the North West has a significant slice of that. As we move through 2013, we anticipate more capital to flow in from the BRIC nations, particularly China and India. Our region has an abundance of fantastic businesses in key sectors that would enhance the global reach and expertise of foreign acquirers. This year is vital for the future success of the UK economy. Investors from fast-growing economies are key to mitigating our exposure to more sluggish economies in the developed world and boosting the prosperity of the North West. Paul Lupton is a corporate finance partner at Deloitte in the North West
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