Cross-border deals for West Midlands companies at highest level since early 2020

The number of inbound cross-border deals for West Midlands-based companies was at its highest level since early 2020 between April and June this year.

According to the latest analysis from Deloitte Midlands Cross Border Deals Radar, which tracks inbound and outbound M&A activity between investors and corporates in the Midlands and overseas, reveals that inbound dealmaking in the West Midlands is exceeding Q1 2020 levels for the first time.

In Q2 2022, overseas bidders completed 11 deals for West Midlands-based companies, compared with seven deals in Q1 2022 and just five deals in Q2 2021. Inbound investment to the West Midlands from April to June totalled £2.39 billion – its highest quarterly value since early 2020.

The flurry of transactions adds to three deals in the East Midlands. Despite inbound deals in the East Midlands dropping slightly this quarter (three) from Q1 2022 (five), the total inbound deals to the Midlands has risen to 14 for the quarter.

The only regions that completed more inbound deals over this time period were London (39) and South-East England (23). However, the Midlands was one of the few regions to see an increase in deal volumes in Q2 2022.

This continuing level of inbound investment in the Midlands goes against the national trend which saw the overall number of inbound deals to the UK fall to its lowest level since Q2 2020. In Q2 2022 there were 134 transactions, a decrease on the 162 transactions completed in the first quarter of the year.

In terms of outbound investment, the volume of deals completed by bidders in the Midlands for overseas companies has decreased over the past three months, from nine in Q1 2022, down to seven in Q2 2022. This trend which can be seen across the country, as overall outbound cross-border activity has decreased 27% between Q1 2022 (177) and Q2 2022 (129).

Nick Carr, a director at Deloitte, said: “At a time when inbound investment to the UK is generally decreasing, it’s reassuring to see that overseas investors continue to see opportunity in the Midlands.

“The majority of interest came from the USA, with American buyers completing six of the 14 inbound deals in Q2 2022. These involved a range of businesses, including sports investment firm Trivela Group LLC’s acquisition of Walsall Football Club.

“Whilst these latest statistics are encouraging for the Midlands, the UK deals market is entering a more challenging period. Macro-economic factors are causing headwinds that could have an impact on the deals market in the second half of the year. However, in relation to the US specifically, our recent survey “The Future of M&A: 2022 M&A Trends Survey” suggested that notwithstanding these challenges, 68% of US companies are considering international markets for new growth opportunities.”

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