UK M&A Activity Surges to 26-Year High Amid Foreign Takeovers
Foreign buyers continued to circle “undervalued” UK firms in the final quarter of 2025, with the value of inward Mergers and Acquisitions (M&A) surging to its highest level in four years. The total value of deals in which foreign companies acquired UK firms rocketed to £27.4 billion in the final quarter of 2025, up nearly £20 billion compared to the previous quarter, according to the Office for National Statistics (ONS).
This put the value of inward M&A at its highest level since the second quarter of 2021. The ONS stated this increase was largely due to a rise in the number of deals valued at over £1 billion. Source
High-Profile Takeovers Signal Trend
A number of high-profile listed businesses were acquired by US firms during this period, continuing a trend of companies leaving the UK’s public markets.
In October, Deliveroo was formally acquired by its US rival Doordash in a £2.9 billion deal, highlighting the contrasting fortunes of public companies on either side of the Atlantic. Deliveroo listed in 2021 with a valuation of £7.6 billion, but struggled to maintain investor confidence, with its shares slumping more than 50% post-listing. Doordash, in contrast, was valued at $71 billion when it went public in 2020 and has maintained its valuation.
US private equity giant KKR also acquired Spectris, the listed industrials firm specializing in manufacturing precision instruments, in a £4.8 billion takeover confirmed in December.
UK Valuations Attract International Bidders
Patrick Sarch, head of UK public M&A at White & Case, said international bidders were attracted by the “relative valuations and many undervalued businesses” in the UK.
A recent report from McKinsey showed that the UK’s average EV/EBITDA multiple – a metric comparing a company’s valuation with its earnings – stands at 7.7, comfortably behind the 13.8 recorded in the US. Although, the McKinsey report also noted this was skewed by the predominance of the biggest tech firms in the US, which have massively outperformed the biggest UK companies. “The relative underperformance of the largest UK companies, as well as the absence of significant outliers, has tended to have a detrimental effect on valuations.”
Domestic and Outward M&A Decline
The value of transactions involving domestic businesses fell to £1.8 billion, from £7.1 billion in the previous quarter. Total outward M&A, deals in which UK businesses acquire foreign firms, was valued at £1.7 billion in the quarter, down from £3.4 billion previously. Source
Looking Ahead to 2026
Looking into 2026, Helen Brocklebank, head of M&A at RSM, said that businesses might be put off major deals due to “global geopolitical tensions and the knock-on impact on inflation.”
“In this environment, industries with strong recurring revenues such as business and professional services, healthcare, technology and industrials will continue to be seen as the most attractive acquisition targets,” she said.
Overall M&A Trends
The provisional combined number of M&A involving a change in majority share ownership was 444 in Quarter 4 2025; this was a fall of 53 compared with the previous year. There were an estimated 165 acquisitions involving a change in majority share ownership in October 2025, followed by a fall to 153 in November and further fall to 126 in December 2025. Source
Data from the London Stock Exchange indicates that the value of mergers and acquisitions involving British companies reached its highest level in 26 years during the first two months of 2026. The total deal value for January and February stood at $89.9 billion, a figure not seen since the year 2000. Source