Political uncertainty sees fall in NW acquisitions by overseas firms

Olly Tebbutt

North West firms have shown continued appetite for cross-border transactions in the first half of 2019, with 22 companies in the region acquiring overseas targets in this time, according to Deloitte.

The business advisory firm’s latest Cross Border Deals Radar reveals that while the number of outbound deals remained stable – just one fewer than last year – only 21 investments were made by overseas buyers in North West assets.

This has brought the total number of cross-border deals involving North West firms to 43 – down from 66 compared with this point 12 months prior.

Conducted in partnership with Experian MarketIQ, the research revealed that the value of transactions also fell over the course of the year, with £1.36bn-worth of deals reported in the first half of 2019.

In comparison, the first half of 2018 saw almost £2.9bn of transactions completed, as overseas companies increasingly looked to secure a North West base.

Notable deals in the first half of 2019 include Cheshire-based Ineos Enterprises Group’s £526m acquisition of The North American Business of National Titanium Dioxide Company, and City Football Group’s addition of Chinese football club Sichuan Jiuniu FC for an undisclosed fee.

The US remained most prominent in bilateral transactions, with 40% of deals involving a US-based company.

Behind this only Sweden, Australia (both three), New Zealand, Jersey, France and Canada (all two) saw multiple transactions.

The North West’s manufacturing sector proved most active in the M&A market with one third of the total deals involving companies in the industry.

This included Delaware-based food processing manufacturer John Bean Technologies Group’s acquisition of Proseal UK for £220m in April. The region’s TMT and retail sectors also saw significant activity, with 18, and 12%, respectively, of transactions coming from these.

Olly Tebbutt, partner at Deloitte in the North West, said: “While overall investment has decreased compared to the first half of last year, a strong showing by North West firms acquiring overseas assets demonstrates the ambition of the region’s companies to expand internationally.

“Political and economic uncertainty has created a lull in inwards investment, although once resolved one way or another, we expect the region to regain its status as an attractive proposition for international companies.

“The broad range of global markets targeted by North West firms, and the diversification of this range compared to last year, is of interest. The global ambitions of the North West’s firms are evident through increased investment in the US and Asia.”