Companies see value in overseas investment as deals hit £2.77bn

Deal done

Outbound M&A activity by North West companies has risen significantly in the past 12 months, with transactions completed worth a total of £2.77bn in the last quarter alone, according to Deloitte.

Research from the business advisory firm, conducted in partnership with Experian MarketIQ, reveals a spike in overseas investment when compared with the same period last year, which saw just £73m spent.

In total, 17 transactions were completed in the third quarter of 2017, also up on the 14 seen a year ago.

Unilever has been at the heart of the region’s largest deals, investing over £2.5bn into similar consumer companies in both South Africa and Korea as it looks to strengthen its global market position.

In the space of three days, the firm completed the nearly £2bn acquisition of Seoul-based Carver Korea from Bain Capital Private Equity and Goldman Sachs, before finalising a £650m deal for the remaining 25% stake in Unilever South Africa from investment holding company Remgro.

The region’s smaller companies have also been active when it comes to overseas transactions.

Manchester-headquartered supplier of private label household and personal care products McBride plc acquired Danish manufacturer of washing and cleaning products Danlind A/S for £38.8m, while manufacturer Carr’s Group plc completed a £15.3m deal for Pittsburgh-based engineering business NuVision Engineering.

Statistics also reveal that transactions were evenly split between EU and non-EU countries, with the US remaining the most popular destination. Four deals were completed in the States, while investments were made in nine other locations, including Germany, Australia, Holland and Denmark.

In contrast, investment in North West assets by overseas companies fell, though deal activity remained stable. In the third quarter of 2017, 14 deals were completed at a recorded value of £50m, compared to 13 deals worth £285m the previous year.

Rob Howells, assistant director at Deloitte in the North West, said: “In the current uncertain financial environment, businesses are recognising the benefits of having operations overseas, both in Europe and further afield.

“As companies look to combat these conditions, internationalisation has been a key trend in recent years. For smaller organisations, having access to foreign markets may prove crucial to sustainable future growth and trade.

“Larger North West companies have continued to look to solidify their positions on a global stage, as shown by the recent Unilever deals in both the Asian and African markets.”

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