North West cross border deals drop amidst Brexit uncertainty
The volume and value of cross border transactions fell during 2019, with 96 deals completed over the course of the year worth a total of £2.29bn, according to Deloitte.
Research from the business advisory firm, conducted in partnership with Experian MarketiQ, revealed that while this a 20 drop on the 120 deals seen in 2018, deal values fell more than 60 from the £6.54bn from the previous year as the deadline to complete Brexit closed in.
Inbound investments were most prolific, with 51 deal completed over the course of the year worth a total of £1.01bn. This was down from 77 in 2018, valued at £1.41bn. Outbound transactions volumes saw a slight rise on the previous year from 43 to 45, but values dropped from £5.13bn to £1.28bn.
The final quarter of the year saw 14 North West companies acquire overseas assets, worth a total of more than £250m. More than a third of these deals involved a US target, with five transactions completed across the Atlantic. No other country saw more than one deal, with six deals in Europe (Sweden, Romania, Portugal, France, Spain and the Netherlands), two in Asia (Japan and India) and one in Australia.
Most notable deals during this period include the City Football Group’s acquisition of Mumbai City FC, adding to its global portfolio of football clubs including Manchester City FC, New York City FC and Girona. In December, metal technology manufacturer Bodycote completed a £154m acquisition of US-based Ellison Surface Technologies, which provides thermal spray and engineered coating surface technology to the aerospace industry.
In addition, 10 overseas investors completed deals for North West companies in the final quarter of the year, though no deal valuations were disclosed. Europe remained most active investors, with four across Finland, Sweden, Belgium and the Netherlands. There were three across North America, and a further two across Asia.
Olly Tebbutt, partner at Deloitte in the North West, said: “Given the proximity of the Brexit deadline, it is perhaps unsurprising to see deal values and volumes fall over the course of the last year. However, as the results of Deloitte’s latest CFO Survey shows, the result of the latest election has driven business confidence up to record levels.
“This is as much a factor for overseas investors as it is in the UK, and we are confident that we will see a rise in activity as our position in Europe becomes clearer over the coming months.”