UK plc ready to buy overseas
UK companies are on the front foot and looking to acquire overseas assets for the first time since the Lehman Brothers crash more than two years ago.
Research from KPMG Corporate Finance says that after focusing on paying down debt, building up cash reserves, many companies are now feeling confident enough to start looking overseas.
Jonathan Boyers, head of KPMG’s Corporate Finance team in the North, said: “While the big growth countries like China and India were not stinted in their international M&A activity by the 2008 crash.
“In the past few years, as a national advisory business, our own work has mirrored this sea change. UK businesses have been on the defensive and, accordingly, we’ve been advising on hostile bid defence rather than proactive acquisition strategy. Our latest analysis has shown, however, that UK companies are back.”
UK companies have made 232 acquisitions of international companies so far this year, while India and China collectively aacoutn for just over half of this figure.
Mr Boyers added: “Of course no one wants to be the first to dip the toe but we have now seen the IPO market softening and big ticket mergers complete. Ultimately, large UK companies need to expand their reach via inorganic growth to counteract the low growth economic backdrop.
“Looking to 2011, our own pipeline of activity suggests that consumer businesses will continue to look to grow inorganically; energy companies are seeking to adapt their models to achieve a better fit with the market and we are certainly seeing the banks further accelerating their disposal programmes. The type of deal may have changed but UK corporates are regrouping and seeking to get back in the global competition for assets.”
