Mergers and acquisitions involving UK companies: October to December 2018

Transactions which result in a change of ultimate control of the target company and have a value of £1 million or more.

This is not the latest release. View latest release

This is an accredited national statistic.

Contact:
Email Andrew Jowett

Release date:
5 March 2019

Next release:
4 June 2019

1. Main points

  • In Quarter 4 (Oct to Dec) 2018, the total value of inward mergers and acquisitions (M&A) was £33.3 billion, the highest value since Quarter 4 2016 (£85.2 billion).

  • The total value of inward M&A for the whole of 2018 (Jan to Dec) was £71.1 billion and is broadly explained by one very large successful acquisition. This was a sizeable increase on the value reported in 2017 (£35.2 billion), yet considerably lower than the value recorded in 2016 (£190.0 billion).

  • The value of outward M&A (UK companies acquiring foreign companies abroad) was £9.9 billion in Quarter 4 2018, a sizeable increase on the value recorded in the previous quarter (£4.3 billion).

  • In 2018, outward M&A was worth £22.7 billion, a notable decline when compared with 2017 (£77.5 billion).

  • Domestic M&A (UK companies acquiring other UK companies) was valued at £5.0 billion in Quarter 4 2018 and was similar to the value (£5.2 billion) reported in the same quarter of the previous year.

  • The total value for domestic M&A during 2018 was £26.5 billion, the highest value recorded since 2008 (£36.5 billion).

  • M&A statistics from Quarter 1 (Jan to Mar) 2018 fully incorporate the new data source and methods; this new data source has improved the coverage of smaller M&A transactions and therefore results in a discontinuity in the number of transactions reported; users are therefore advised to take care when comparing the latest estimates with the number of transactions reported for previous quarters (see Annex 1 for more information).

  • A short article has been published alongside this release to provide additional context for M&A involving UK companies that completed during 2018.

Back to table of contents

2. Things you need to know about this release

Mergers and acquisitions (M&A) occur when one company takes control of another company. The internationally-agreed definition of a M&A deal is when one company gains more than 50% of the ordinary shares (or voting rights) of the acquired company. These can be domestic transactions – where a UK-based company acquires another UK company – or international. Outward M&A transactions are when a UK-based company gains control of another company overseas, while inward M&A are from overseas companies acquiring UK companies.

The Office for National Statistics (ONS) produces statistics on the number and value of M&A transactions. This information is presented in the following way:

  • transactions are only recorded in ONS statistics once the deal has been legally completed

  • each transaction has a value of at least £1 million

  • the transactions results in a change of ultimate control of the target company

  • all values are in current prices, and therefore have not been adjusted for the effects of inflation

These four bullet points are among the main reasons our M&A statistics can differ from those reported in other sources. There can be a substantial time gap between the point at which a deal is announced and when it is legally completed. In some cases, announced M&A deals do not take place. ONS statistics on disposals (or de-mergers) are also included in tables alongside this bulletin. These are typically fewer in number per quarter, which can lead to greater suppression of statistics to mitigate disclosure. The focus of this bulletin is on acquisitions although some of the more complex deals can include the disposal of some part of the newly-created corporate structure.

It is not uncommon for the value of M&A transactions to vary considerably from one quarter to the next. This mainly reflects the nature of M&A activity in that these capture one-off deals. Therefore, if a particularly high-value M&A deal completes in a given quarter, it can make that quarter seem out of line with those that precede and follow it. Details of any notable M&A deals that completed in Quarter 4 (Oct to Dec) 2018 can be found in the respective sections of this bulletin. This also makes it difficult to link M&A statistics with other economic indicators – such as gross domestic product – or global events because of the time it can take between announcing and completing a M&A deal. It can therefore be more informative to look at longer-term trends within M&A statistics rather than focusing on quarter-to-quarter movements.

The ONS has recently undertaken a review of the data sources used for identifying completed M&A transactions and creating the sampling frame for M&A involving UK companies. It has replaced the use of multiple online public sources with one comprehensive commercial data source (provided by Bureau van Dijk) for identifying completed and successful M&A transactions. It also uses values from this commercial data source to estimate for transaction values worth less than £100 million, while surveys continue to be dispatched to companies to collect information directly on any transactions identified as exceeding £100 million – which generally dominate reported headline values. More information about these changes can be found in Annex 1 of this bulletin.

From Quarter 1 (Jan to Mar) 2018, the M&A statistics fully incorporated the new data source and methods. This new data source has improved the coverage of smaller M&A transactions and therefore result in a discontinuity in the number of completed M&A transactions when compared with previous quarters. In contrast, the overall value of M&A transactions from Quarter 1 2018 remains consistent and largely unchanged.

Supplementary information about mergers and acquisitions involving UK companies was published in Mergers and acquisitions activity in context: 2018. This article provides more detail on annual M&A statistics.

Back to table of contents

3. The value and number of inward M&A increased in Quarter 4 2018

The estimates for the value (Figure 1a) and number (Figure 1b) of mergers and acquisitions (M&A) of UK companies made by foreign companies over Quarter 4 (Oct to Dec) 2018 saw notable increases when compared with Quarter 3 (July to Sept) 2018.

The total value of inward M&A in Quarter 4 2018 was £33.3 billion, the highest value since Quarter 4 2016 and is explained by one large acquisition of Comcast Corporation of the US, which acquired Sky Plc of the UK.

There were 119 successful inward acquisitions by foreign companies in Quarter 4 2018, a slight increase on the number reported in the previous quarter (109).

Value and number of inward M&A transactions involving UK companies per quarter

Other notable inward acquisitions – each valued at £100 million or more – that took place in Quarter 4 2018

Macquarie Group Ltd of Australia acquired Parkingeye Ltd / Glyde Ltd of the UK

MML Capital Partners of Jersey acquired Parkingeye Ltd / Glyde Ltd of the UK

OSG Group Holdings Inc of the USA acquired Communisis Plc of the UK

Huadong Medicine Co of China acquired Sinclair Pharma Plc of the UK

There were 19 inward disposals of UK companies involving a change of majority share ownership during Quarter 4 2018. These were worth £2.1 billion, the lowest value recorded since Quarter 4 2017 when the value was £1.1 billion.

Notable inward disposals – each valued at £100 million or more – that took place in Quarter 4 2018

Bank of Cyprus Plc of Cyprus disposed of Bank of Cyprus UK Ltd of the UK

Stichting Depository APG of the Netherlands disposed of Grip Reit Plc of the UK

Iberdrola S.A. of Spain disposed of Scottish Power Generation Ltd of the UK

Back to table of contents

4. Transactions in the UK by foreign companies (Jan to Dec) 2018

The value of successful inward mergers and acquisitions (M&A) saw a notable increase in 2018, reaching a total of £71.1 billion. This was a sizeable increase on the 2017 total of £35.2 billion (Figure 1c).

While historically the value of inward M&A has been volatile, the increase seen during 2018 is largely reflecting a small number of very-high-value acquisitions, with values greater than £10.0 billion, which were not evident in the previous year. The contributions of these transactions can be found in a short article published alongside this bulletin.

Other notable inward acquisitions – each valued at £100 million and above – that took place in 2018

Quarter 1 (Jan to Mar) 2018

3i Infrastructure Plc of Jersey acquired Wireless Infrastructure Group Ltd of the UK

FirstRand Ltd of South Africa acquired Aldermore Group of the UK

Scientific Games Corporation of the USA acquired Nyx Digital Gaming (OB Holdings) Ltd of the UK

Refresco Group N.V. of the Netherlands acquired Cott's bottling activities of the UK

Patrizia Immobilien AG of Germany acquired Rockspring PIM LLP and Rockspring Property Holdings Ltd of the UK

Vantiv Inc of the USA acquired Worldpay Group Plc of the UK

GVC Holdings Plc of the Isle of Man acquired Ladbrokes Coral Group Plc of the UK

Quarter 2 (Apr to June) 2018

Elliott Management Corporation of the USA acquired Waterstones Booksellers Ltd of the UK

Reliance Worldwide Corporation Ltd of Australia acquired John Guest Holdings Ltd of the UK

Wisdomtree Investments Inc of the USA acquired ETF Securities (UK) Ltd of the UK

TransUnion of the USA acquired Callcredit Information Group Ltd of the UK

La Financiere Atalian S.A.S. of France acquired Servest Ltd of the UK

Compagnie Generale Des Etablissements Michelin SCA of France acquired Fenner Plc of the UK

Quarter 3 (July to Sept) 2018

Novo Nordisk A/S of Denmark acquired Ziylo Ltd of the UK (PDF, 82KB)

Archer-Daniels Midland Company of the USA acquired Probiotics International Ltd of the UK (PDF, 367KB)

Federated Investors Inc of the USA acquired Hermes Fund Managers Ltd of the UK (PDF, 184KB)

Nomad Foods Ltd of The British Virgin Islands acquired Aunt Bessie's Ltd of the UK (PDF, 63KB)

Stamps.com Inc of the USA acquired Metapack Ltd of the UK

Roche Holding AG of Luxembourg acquired Tusk Therapeutics Ltd of the UK (PDF, 201KB)

The majority of the total number of inward M&A deals (560) worth £71.1 billion in 2018 came from Europe (243) and the Americas (240). In comparison, the number of inward M&A in 2017 (259) saw the majority of acquisitions come from the Americas (118) and Europe (101) (Figure 1d).

During 2018, the value of completed inward disposal transactions saw a small increase when compared with the previous year. There were £16.4 billion of inward disposals compared with £13.2 billion in 2017.

Notable inward disposals – each valued at £100 million and above – that took place in 2018

Quarter 1 (Jan to Mar) 2018

Massachusetts Mutual Life Insurance Company of the USA disposed of WIG Holdings I Ltd of the UK

San Quirico SPA of Italy disposed of Brockaghboy Windfarm Ltd of the UK

Patron Capital LP IV of Guernsey disposed of Cala Group Ltd of the UK

Quarter 2 (Apr to June) 2018

A&NN Capital Management Fund Ltd of the Bahamas disposed of Waterstones Booksellers Ltd of the UK

ETF Securities UK Ltd of Jersey disposed of ETF Securities UK Ltd of the UK

GTCR LLC of the USA disposed of Crown Acquisition Topco Ltd of the UK (PDF, 80KB)

Lonestar Global Holdings IV Ltd of Bermuda disposed of MRH (GB) Ltd of the UK (PDF, 207KB)

Servest (Pty) Ltd of South Africa disposed of Servest Ltd of the UK

Quarter 3 (July to Sept) 2018

Droia Oncology Ventures of Switzerland disposed of Tusk Therapeutics Ltd of the UK (PDF, 201KB)

Back to table of contents

5. The value of outward M&A increased in Quarter 4 2018

The latest estimate for the value of outward mergers and acquisitions (M&A) of foreign companies by UK companies during Quarter 4 (Oct to Dec) 2018 was £9.9 billion. This was a £5.6 billion increase when compared with the previous quarter (£4.3 billion) and the largest value seen since Quarter 3 (July to Sept) 2017 (Figure 2a).

The total number of outward M&A deals reached 61 in Quarter 4 2018 and is similar to the number (64) recorded in the previous quarter (Figure 2b).

Notable outward acquisitions – each valued at £100 million or more – that took place during Quarter 4 2018

Elementis Plc of the UK acquired Mondo Minerals Holding BV of the Netherlands

BP PLC of the UK acquired Petrohawk Energy Corporation of the USA (PDF, 155KB)

There were seven outward disposals that completed during Quarter 4 2018. These were worth £1.6 billion, recording a decrease of £3.5 billion on the value of £5.1 billion transactions recorded in the previous quarter. Quarter 4 2018 saw the lowest value of outward disposals since Quarter 4 2017.

Notable outward disposals – each valued at £100 million or more – that took place during Quarter 4 2018

The Canada Pension Plan Investment Board of the UK disposed of Shell E&P Ireland Ltd of Ireland (PDF, 180KB)

Montagu Print Equity LLP of the UK disposed of Equatex Group Holding AG of Switzerland

Back to table of contents

6. Transactions abroad by UK companies (Jan to Dec) 2018

Outward M&A saw a sizeable decrease in value during 2018 when compared with the previous year

In 2018, successful mergers and acquisitions abroad by UK companies (outward M&A) saw a notable fall in the value of acquisitions. The total value recorded for outward acquisitions for the whole of 2018 was £22.7 billion.

Year-on-year comparison shows the value of completed outward M&A in 2018 saw a sizeable decrease of £54.8 billion when compared with the value of £77.5 billion recorded in 2017 (Figure 2c). This decrease can be explained by the notable absence of any high-valued acquisitions during 2018 but which were present in the previous year. The article Mergers and acquisitions activity in context 2018 provides more details on annual M&A statistics.

Other notable outward acquisitions – each valued at £100 million and above – that took place in 2018

Quarter 1 (Jan to Mar) 2018

IMI Plc of the UK acquired Bimba Manufacturing Company Inc of the USA

TDR Capital of the UK acquired Buffalo Grill of France

LivaNova Plc of the UK acquired ImThera Medical Inc of the USA

Neptune Oil and Gas Ltd of the UK acquired Engie E&P International SA of France (PDF, 133KB)

Dechra Pharmaceuticals Plc of the UK acquired AST Farma BV / Le Vet Beheer BV of the Netherlands

DS Smith Plc of the UK acquired Ecopack SRL / Ecopaper SA of Romania

Inchcape PLC of the UK acquired Grupo Rudelman of Costa Rica

Quarter 2 (Apr to June) 2018

Aviva Plc of the UK acquired Friends First Life Assurance Co Dac of Ireland

Learning Technologies Group Plc of the UK acquired Peoplefluent Holding Corp of the USA

Livanova Plc of the UK acquired CardiacAssist Inc. doing business as TandemLife of the USA

JD Sports Fashion Plc of the UK acquired The Finish Line Inc of the USA (PDF, 25KB)

Mondi Plc of the UK acquired Powerflute Group Holdings OY of Finland

Quarter 3 (July to Sept) 2018

S4 Capital Ltd of the UK acquired Mediamonks Multimedia Holding B.V. of the Netherlands

BTG Plc of the UK acquired Novate Medical Ltd of Ireland

Royal Mail Plc of the UK acquired Dicom Transportation Group Canada Inc of Canada

Jura Holdings Ltd of the UK acquired John Laing Infrastructure Fund Ltd of Guernsey

Diageo Plc of the UK acquired Sichuan Shuijingfang Co Ltd of China

In 2018, UK companies acquired 272 acquisitions of foreign companies, the majority were in Europe (141) and Americas (92) (Figure 2d).

There were 49 successful disposals of companies abroad by UK companies in 2018, worth £12.1 billion, broadly in line with the value and number of disposals recorded since 2015.

Notable outward disposals – each valued at £100 million and above – that took place in 2018

Quarter 1 (Jan to Mar) 2018

A&NN Capital Management Fund Ltd of the Bahamas disposed of Waterstones Booksellers Ltd of the UK

ETF Securities UK Ltd of Jersey disposed of ETF Securities UK Ltd of the UK

GTCR LLC of the USA disposed of Crown Acquisition Topco Ltd of the UK (PDF, 80KB)

Lonestar Global Holdings IV Ltd of Bermuda disposed of MRH (GB) Ltd of the UK (PDF, 207KB)

Servest (Pty) Ltd of South Africa disposed of Servest Ltd of the UK

Quarter 2 (Apr to June) 2018

William Hill Plc of the UK disposed of William Hill Australia Pty Ltd of Australia

Northern Foods Ltd of the UK disposed of Green Isle Foods Ltd of Ireland

Rolls-Royce Holdings Plc of the UK disposed of L'Orange GmbH of Germany

EQT VII (No.1) Ltd of the UK disposed of Piab Group AB of Sweden

Nordic Packaging and Container (UK) Holdings Ltd of the UK disposed of Powerflute Group Holdings OY of Finland

Quarter 3 (July to Sept) 2018

Liberty Global Plc of the UK disposed of UPC Austria GmbH of Austria. (PDF, 196KB)

Aviva Plc of the UK disposed of Cajamurcia Vida Y Pensiones De Seguros Y Reaseguros SA of Spain

Back to table of contents

7. The value of domestic M&A in Quarter 4 2018 increased

The total value of domestic mergers and acquisitions (M&A) totalled £5.0 billion in Quarter 4 (Oct to Dec) 2018 compared with £2.7 billion in Quarter 3 (July to Sept) 2018, an increase of £2.3 billion, This value is similar to those previously reported in Quarter 3 2017 (£5.4 billion) and Quarter 4 2017 (£5.2 billion) (Figure 3a).

There were 214 successful domestic acquisitions involving a change in majority share ownership in Quarter 4 2018, consistent with the numbers of domestic M&A deals recorded in each of the previous quarters of 2018 (Figure 3b).

Notable domestic acquisitions – each valued at £100 million or above – that took place in Quarter 4 2018

Caledonia Investments Plc of the UK acquired Deep Sea Electronics Ltd of the UK

CYBG Plc of the UK acquired Virgin Money Holdings Uk Plc of the UK

Cynergy Capital Ltd of the UK acquired Bank of Cyprus UK Ltd of the UK

The Restaurant Group Plc of the UK acquired Mabel Topco Ltd of the UK

Grainger Plc of the UK acquired Grip Reit Plc of the UK

Back to table of contents

8. Transactions in the UK by other UK companies, (Jan to Dec) 2018

Domestic mergers and acquisitions (M&A) have increased between 2017 and 2018.

The total value of domestic M&A for the whole of 2018 was £26.5 billion, with more than half of the value (£18.8 billion) being reported for Quarter 1 (Jan to Mar) and Quarter 2 (April to June) 2018.

Year-on-year comparison shows that domestic acquisitions involving a change of majority share ownership in 2018 were worth £26.5 billion, the highest value recorded since 2008 (£36.5 billion) (Figure 3c). This increased value can be explained by a handful of transactions with values greater than £1.0 billion. One successful and high-valued transaction that occurred in Quarter 1 2018 was Tesco Plc of the UK, which acquired Booker Group Plc of the UK.

A second very large value domestic transaction that completed in Quarter 2 2018 was Melrose Industries Plc of the UK, which acquired GKN Plc of the UK.

Notable domestic acquisitions – each valued at £100 million and above – that took place in 2018

Quarter 1 (Jan to Mar) 2018

Xafinity Plc of the UK acquired Punter Southall Holdings Ltd of the UK

Spectris Plc of the UK acquired Concept Life Sciences Ltd of the UK

Montagu Private Equity LLP of the UK acquired Servelec Group Plc of the UK

Greencoat UK Wind Plc of the UK acquired Brockaghboy Windfarm Ltd of the UK

Quarter 2 (Apr to June) 2018

Countryside Properties Plc of the UK acquired Westleigh Group Ltd of the UK

Cooperative Group Ltd of the UK acquired Nisa Retail Ltd of the UK

Quarter 3 (July to Sept) 2018

ITE Group Plc of the UK acquired Ascential Events Ltd of the UK

Rathbone Brothers Plc of the UK acquired Speirs and Jeffrey Ltd of the UK

Back to table of contents

9. M&A activity during 2018 was higher than the averages for 2008 to 2017

The longer-term trend in mergers and acquisitions (M&A) activity has been one of decreasing numbers and values. This can be seen in Table 1, which shows the average number and value of each type of M&A transaction over five-year intervals since 1993. For example, there was an average of 186 domestic acquisitions per year between 2003 and 2007 and this decreased to an average of 73 transactions between 2013 and 2017. The average value of domestic acquisitions also fell from £6.5 billion to £3.3 billion between these periods.

Similarly, the numbers of inward acquisitions have also decreased since 2003, yet the values have increased. There were 54 inward transactions at £12.5 billion on average between 2003 and 2007 compared with an average 46 transactions at £15.3 billion between 2013 and 2017.

The impact of some very-high-valued M&A deals that completed in 2018 can be seen in the average values for both inward and domestic M&A deals. During this period the average value of M&A made by overseas companies (inward M&A) was £17.8 billion compared with a smaller average value of £15.3 billion during 2017 to 2018. Likewise, M&A between UK companies (domestic M&A) also saw a notable increase in average values during 2018 (£6.6 billion) compared with an average value of £3.3 billion over 2013 to 2017.

Similarly, the increase in the value of M&A abroad by UK companies (outward M&A) over 2013 to 2017 led to the value of this activity averaging £7.6 billion, compared with a slightly smaller average value of £6.0 billion during 2008 to 2012.

The number of deals in Quarter 4 (Oct to Dec) 2018 was lower than the average number of deals per quarter in 2018. However, the value of inward (£33.3 billion) and outward (£9.9 billion) deals were both above the average values over 2018 (£17.8 billion and £5.7 billion respectively). This indicates that some of the highest-value cross-border M&A transactions completed in the first quarter of 2018.

Back to table of contents

10. External evidence suggests business investment intentions remained positive

Global merger, acquisitions and disposals activity can be driven by the availability of credit. Therefore, when credit conditions deteriorate, as happened in the 2008 to 2009 economic downturn, mergers and acquisitions (M&A) activity declines. M&A activity can also be affected by the economic outlook and company profits, in addition to a range of other economic factors. The process of completing a M&A transaction takes time and sometimes there may be a lag between improving economic conditions and any change in M&A activity.

The Bank of England’s (BoE) Credit Conditions Survey for Quarter 4 2018 reported that:

“The overall availability of credit to the corporate sector was reported to have been unchanged in Quarter 4 2018. Within this, the availability of credit provided to medium businesses was reported to have fallen slightly in Quarter 4 2018 and was unchanged for small and large businesses. The overall availability of credit to the corporate sector was expected to remain unchanged in Quarter 1 2019”.

The BoE Agents’ Summary of Business Conditions report for Quarter 4 2018 stated that:

“Mergers and acquisitions (M&A) activity continued to hold up, though there were some signs of slowing following a period of robust growth, and demand remained strong for IT services. But demand had weakened in sectors reliant on discretionary spending, such as hospitality and marketing. A number of contacts warned that if Brexit uncertainty continued, activity could slow in Quarter 1 2019, potentially quite sharply, as businesses were likely to avoid completing large transactions close to the date of EU withdrawal”. The same report also stated that:

“…demand for credit from corporates softened slightly, reflecting subdued investment intentions, and slower refinancing and mergers and acquisitions activity. Credit availability tightened for some contacts in sectors vulnerable to a potential slowing in demand such as construction, procurement and consumer-facing businesses”.

The BoE Inflation Report for November 2018 (PDF, 5MB) reported that:

“…weak demand for investment appears to have been reflected in slowing growth of bank lending to both large companies and small and medium-sized enterprises since late 2016. Results from the Quarter 3 2018 BoE Credit Conditions Survey suggest that lenders anticipate a further reduction in large companies’ demand for credit in Quarter 4 2018. While a broader measure of companies’ external financing suggests larger companies have continued to raise finance at a reasonably steady pace since 2015, some of that financing has been raised through leveraged loans for mergers and acquisitions or balance sheet restructuring, and so is unlikely to have provided direct support to business investment growth”.

Back to table of contents

11. Revisions

Mergers and acquisitions (M&A) statistics for Quarter 1 (Jan to Mar), Quarter 2 (Apr to June) and Quarter 3 (July to Sept) 2018 have been revised in the light of new information.

No further revisions to estimates prior to Quarter 1 2018 have been made. Therefore, time series statistics for all quarters of 2017 and any previous historic quarterly periods remain unchanged.

M&A statistics from Quarter 1 2018 fully incorporate the new data source and methods. This new data source has improved the coverage of smaller M&A transactions and therefore results in a discontinuity in the number of transactions reported; users are therefore advised to take care when comparing the latest estimates with the number of transactions reported for previous quarters (see Annex 1 for more information).

Annual data tables for 2018 are produced in conjunction with the Quarter 4 2018 results. Therefore, no revisions to annual estimates prior to 2017 have been made and subsequently the time series for previous historic annual periods remains unchanged.

Revisions to the aggregates for M&A transactions valued at £100 million and greater, principally occur for the following reasons.

Completion of transactions

On announcement of a proposed transaction an expected completion date is usually given. The publicly reported values will be allocated to the quarter of expected completion. If the transaction is ultimately completed in an earlier or later quarter, the recorded values will be reallocated to the new quarter.

Publicly reported values

Publicly reported values are initially used to compile the aggregates. These can vary considerably from the values ultimately supplied by the respondents, frequently because the assumption of debt has been included in the publicly reported value. A nominal value is applied if no publicly reported value is available. The final values used to create the aggregates are those supplied by the respondent.

Non-completion of transactions

On announcement of a proposed transaction the publicly reported value of the transaction is recorded. If the transaction does not subsequently take place the recorded value will be deleted.

Non-share transactions

On announcement of a proposed transaction it may appear that there will be transactions in the share capital of the companies involved and the publicly reported values will be recorded. If subsequent information contradicts this the recorded values will be amended or deleted.

Control

On announcement of a proposed transaction it may appear that the transaction will give the purchasing company control of the purchased company, that is, a share ownership of greater than 50%. If subsequent information contradicts this the recorded values will be amended or deleted.

Revisions from respondents

Very occasionally respondents revise the values that they have previously supplied to us. The revised values are those used to create the aggregates.

Back to table of contents

12. Response rates

Back to table of contents

13. Quality and methodology

The Mergers and acquisitions Quality and Methodology Information report contains important information on: check this link is to the new QMI?

  • the strengths and limitations of these data and how it compares with related data

  • uses and users of these data

  • how the output was created

  • the quality of the output including the accuracy of these data

Back to table of contents

14. Disclosure

It is sometimes necessary to suppress figures for certain items in order to avoid disclosing information about an individual business. Further information on why data are suppressed is available in the ONS Disclosure Control Policy.

Back to table of contents

15. Discussing ONS Business Statistics Online

There is a Business and Trade Statistics community on the StatsUserNet website. StatsUserNet is the Royal Statistical Society’s interactive site for users of official statistics. The community objectives are to promote dialogue and share information between users and producers of official business and trade statistics about the structure, content and performance of businesses within the UK. Anyone can join the discussions by registering via either of the links.

Back to table of contents

16. Annex 1: Changes to how mergers and acquisitions statistics are collected and produced

In January 2018, the Office for National Statistics (ONS) changed the processes it uses to identify and collect data on mergers and acquisitions (M&A) involving UK companies. Part of this change was to review available commercial data sources to identify M&A deals. Bureau van Dijk’s Zephyr database is now used as the starting point for ONS M&A deal identification, replacing the previous labour-intensive “press scrutiny” process, while also reducing the reliance on survey questionnaires.

Reduction in number of M&A survey questionnaires

Prior to January 2018, the M&A survey questionnaires were dispatched daily by ONS as soon as a M&A deal was identified as legally completed. The population of transactions was identified through a process of scrutinising the financial press, specialised publications and other internet sources.

Relevant deals are characterised as being worth over £1 million, having UK involvement, and resulting in a change of ordinary share ownership of more than 10% (50% for domestic) of the issued share capital. Deals identified as meeting these requirements were sent a survey questionnaire to collect deal information and values.

Now, only large deals, classified as transactions worth over £100 million, continue to receive a survey questionnaire. ONS analysis revealed that, while fewer of these large deals take place, their value generally dominates headline estimates, usually making up around 90% of the total value per quarter. Thus, accurate company data of these deals will be ascertained to ensure retention of granular, high-quality data.

Deal values below £100 million are now taken directly from Bureau van Dijk’s Zephyr database – which are based on information from the public domain. Transactions worth less than £100 million make up the majority of deal numbers, but only a small proportion of headline values.

Improvements in M&A coverage

Previously, coverage for the M&A survey was limited to information gathered from the financial press, specialised publications, websites specialising in M&A and websites of businesses regularly engaged in M&A activity. These included the Financial Times, Guardian Business News, InvestEgate, Insider Media, NewsNow and Growth Business UK.

Bureau van Dijk report over 100,000 new deals annually resulting in an ever-growing database of current and historical transactions.1 Analysis of this new data source revealed that, compared with the ONS, Bureau van Dijk identifies more M&A deals involving British companies. Using the Zephyr database has therefore resulted in an increase in the number of deals.

While the increased coverage will also affect deal values, the effect is not as big, since previously the ONS had sufficient coverage of the largest transactions that generally dominate headline estimates. Nevertheless, some caution is advised when interpreting changes in activity from Quarter 1 (Jan to Mar) 2018 with earlier periods – especially in terms of the number of deals.

New imputation methods for missing M&A deal values

In the past, the ONS collected information on deals from companies directly involved in the transactions. Survey questionnaires were sent to relevant parties, and these were returned, queried and verified. In cases where surveys were not returned in a timely manner, deals were given alternative values found in the public domain, before revising in a future period once the survey questionnaire was returned.

Since Bureau van Dijk relies on press releases and news sources to gather information about M&A deals, there are instances where the value of a transaction is undisclosed to the public. ONS analysis reveals that for Quarter 1 2018, roughly 43% of viable Bureau van Dijk deals displayed no deal value, a percentage expected to remain stable for future quarters (47% in 2015, 45% in 2016, 43% in 2017).

In these cases, it is necessary to assign a value to the deal by having an uplift factor to weight available deal values to account for deals with no deal values. The weight is used to calculate a value to distribute across the missing deals evenly within country groups. This process is conducted separately for domestic, inward and outward deals, as the average values for deals is not uniform across these domains.

As M&A results are published by country groups, the process of imputing values takes special care to address this consideration. Due to the unequal number of deals with missing values originating from different country groups, some of which have no populated cases, the method of estimating for empty deal values relies on alternative country groupings.

Outward M&A deals are estimated according to whether they originate from the United States or elsewhere, while inward deals have grouped Asian and African deals into one category, but retain all other country groups. Domestic deals, all originating in the UK, have remained grouped together. Using these alternative groupings, we can ascertain potential values for deals in which no financial information was available.

Preliminary analysis of this imputation method for Quarter 1 2018 suggests that the imputed deal averages provide good deal estimation at country group levels and are in line with actual deal value averages determined by Bureau van Dijk, albeit at a slightly lower level. While the use of commercially-available data has made the use of imputation necessary, the method is only required for a relatively small proportion of headline M&A values (less than 10%).

Smaller M&A revisions expected

Previously, revisions to published M&A statistics took place on a quarterly and annual basis. These mainly affected the number of deals, with relatively smaller revisions to values. There were multiple reasons for revisions, such as information from other ONS surveys (like the FDI survey), corrections to data supplied by the company themselves, late response, late identification of deals, or unsuitable deal criteria for M&A activity.

Moving to Bureau van Dijk to collect information on most M&A deals and imputing any missing deal values, means that only large value deals of over £100 million will require the dispatch of survey questionnaires. As fewer survey questionnaires will be distributed and returned, the ONS anticipates that even fewer large revisions will take place, since values for the smaller transactions are readily available.

There is also an expectation that revisions to the number of M&A deals will be reduced, since all transactions are now identified from one comprehensive source at an early stage, whereas, under the previous process, new deals from multiple sources were often identified after the preliminary estimates were produced.

Conclusions and looking ahead

The use of Bureau van Dijk data for M&A has changed the sampling, coverage, imputation and revision processes for this survey. We are seeing an improvement in coverage, with associated increases in the number and value of M&A deals, although some of these deals will be produced using imputation methods where deal values are unavailable in the public domain.

As of the M&A bulletin for Quarter 4 (Oct to Dec) 2018, all quarters of 2018 are measured using the new processes outlined in this annex. We will continue developing our methods for calculating M&A statistics.

Notes for: Annex 1: Changes to how mergers and acquisitions statistics are collected and produced
  1. Bureau Van Dijk Zephyr database.
Back to table of contents

Contact details for this Statistical bulletin

Andrew Jowett
MA@ons.gov.uk
Telephone: +44 (0)1633 455357