(Alliance News) - British firms saw a sharp decrease in takeover deals by foreign companies in the last quarter, the Office for National Statistics (ONS) said.

The total value of inward merger deals, where overseas businesses buy British firms, declined 39% to GBP6.1 billion in the three months to March 31, the lowest figure since 2020.

Just 144 UK firms were snapped up by a foreign buyer, a decrease of 16% on the previous quarter.

Among the biggest inward acquisitions of the first quarter was the buyout of British oil and gas firm Neptune Energy by Italy's Eni Spa for GBP3.9 billion.

The sparse figures appear to be a hangover from 2023, which saw a collapse in M&A activity in the UK, following a period of steep rises in inflation and interest rate hikes by the Bank of England.

The data preceded a flurry of renewed interest in British firms from foreign suitors in recent months, with a number of high-profile approaches in May alone.

London-listed firms including Royal Mail owner International Distributions Services PLC and mining group Anglo American PLC are being pursued, with the former subject to a GBP3.5 billion bid by Czech billionaire Daniel Kretinsky last week.

Meanwhile, Australian mining firm BHP Group Ltd is attempting to seal a GBP39 billion takeover of Anglo American.

Also in May, UK retail investment platform Hargreaves Lansdown PLC said it had rejected a nearly GBP5 billion takeover approach from a group of overseas private equity firms.

The drop in inward deals completed in the first quarter drove down the total M&A activity involving British firms, which ticked down 4% in the first quarter of this year.

UK companies were involved in 426 takeovers both inward and outward, compared to 444 in the three months to December 31, the ONS said on Tuesday.

By Alex Daniel, PA Business Reporter

Press Association: Finance

source: PA

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