UK Mergers And Acquisitions At All Time Record

UK company activity reached a record high for the last quarter in terms of the value of mergers and acquisitions, according to official figures released today.

The figures, released by the Office for National Statistics, suggested that foreign firms had invested £49 billion ($100 billion) in UK acquisitions over the second quarter of this year, which is at present a record quarterly high.

The figure is particularly impressive when considered in the context of the whole of 2006, in which the extent of foreign investment in UK acquisitions was just £77.7 billion. ($154 billion).

Spending from firms based in the United Kingdom on overseas acquisitions totalled £16.9 billion for the same period according to the figures released today, compared to just £5.9 billion for the same period last year.

Several high scale acquisitions, including Alliance Boots and AstraZeneca’s takeover of Medimmune were thought to have buoyed the figures, in spite of the situation from the US sub prime sector.

However, with credit becoming more difficult to come by for businesses and consumer borrowers alike, mergers and acquisitions have tended to slow down, with a prolonged lull more possible over the next few months.

With lender liquidity tied up in the US sub-prime sector, and ongoing extreme inter-bank lending, businesses will be likely to face a brick wall when presenting extension plans to bank managers for the foreseeable future. And with the full extent of the sub-prime market yet to be clarified, it is unlikely that the situation will change any time soon.

The news today led to positive trading on the London FTSE 100 stock exchange, along with positive news from within the US, suggesting the economy may not as of yet be feeling the effects of the sub-prime lending crisis, and the overarching credit crunch.

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