AstraZeneca PLC (LSE:AZN)’s acquisition of Alexion Pharmaceuticals (NASDAQ:ALXN) Inc was the highlight of a third-quarter that saw UK companies splash out £32.8bn on acquisitions.
Figures from the Office for National Statistics (ONS) show that while the three months to the end of September saw a decline in merger & acquisition (M&A) deals to 136 a month from 164 in the preceding quarter, UK companies flexed their muscle overseas a bit more, with foreign businesses acquired valued at £32.8bn, well up from £8.2bn in the preceding quarter.
READ AstraZeneca eyes big jump in revenue after Alexion acquisition
AstraZeneca stumped up £27.5bn for Alexion in the third quarter after the EU finally approved a deal first announced in December of last year.
Elsewhere in the FTSE 100, Intertek Group Plc (LSE:ITRK), the relatively obscure (for a Footsie giant) quality assurance specialist spent £470mln on SAI Global (ASX:SAI) Assurance to strengthen its market position in Australia, the US, Canada, the UK and China.
The size of the AstraZeneca purchase means that “outward” M&A deals in the quarter dwarfed “inward” deals, with the value of the latter tumbling to £10.7bn from £28.7bn in the previous quarter.
The value of deals involving UK companies taking over other UK companies totalled £3bn.
The ONS said M&A activity was initially affected by the pandemic, with the total number of completed monthly domestic and cross-border M&A falling to a low of 58 in May 2020. After this decrease, M&A activity started to recover with an upward trend to a new peak of 292 in March 2021 – the highest of all months from the data beginning January 2019; however, in April 2021 there was a sizeable decrease compared with March 2021 (from 292 to 160), which continued to May 2021 (149). Despite an increase to June 2021, there has been a slight downward trend through to September 2021, when 136 completed transactions were recorded.
Monthly domestic M&A activity declined slightly between July (71) and August 2021 (69), continuing the decline to record 64 transactions during September 2021.
Similarly, inward M&A also decreased between the months of July (64) and August 2021 (59), before declining further to 48 completed transactions during September 2021.
The number of monthly outward M&A has followed a relatively flat trend since February 2021 (25) through to September 2021 (24), the ONS said.