The United Kingdom is finally joining in the global resurgence in mergers and acquisitions.
The COVID-19 pandemic severely impacted the United Kingdom, just as it did so many other countries and companies. The worst economic contraction in 300 years saw the country’s M&A activity shut down in the early summer compared to that period in 2019. Another factor not helping M&A was Britain’s exit from the European Union, which extended that weakness into the early fall.
United Kingdom M&A Rebounds in Q4
Domestic and cross-border M&A involving United Kingdom companies in the second quarter of last year saw 152 completed transactions. This number contrasts with 311 compared with the previous quarter (463) and 292 fewer than in Q2 2019 (444).
During the third quarter, the estimated values of both domestic and inward mergers and acquisitions with the country’s companies started to see increases, while outward M&A saw a decrease when compared with the second quarter.
Domestic M&A (United Kingdom companies acquiring other United Kingdom companies) in Quarter 3 2020 was worth £4.4 billion. This figure recorded a sizeable increase of £4.0 billion compared with Quarter 2 2020 (£0.4 billion). It’s also £1.2 billion higher than Quarter 1 (Jan to Mar) 2020 (£3.2 billion).
But the fourth quarter showed a real rebound in mergers and acquisitions in the United Kingdom. This was due in part to the efforts to establish a vaccination program to bring the virus under control. Plus, Britain’s trade deal, which took effect at the start of 2021, assured companies and their advisers that the country’s exporters won’t see tariffs and quotas selling into the EU market.
MGM Bids for Entain
MGM Resorts International made an unsolicited of $11 billion for the United Kingdom company Entain. That company is the ownerof British gambling brand Ladbrokes. But MGM decided to walk away after its $11 billion bid was rejected.
The US casino group said in a statement that it would not make a firm offer for Ladbrokes owner Entain. That decision followed “careful consideration” and “limited recent engagement.”
MGM’s bid earlier this month sought to capitalize on a surge in online betting during the pandemic. However, Entain said the offer “significantly” undervalued the company’s shares and its prospects.
Nvidia Seeks Takeover of United Kingdom Firm Arm
Nvidia Corp.’s proposed $40 billion takeover of Arm Ltd. is ready to be investigated by the country’s competition watchdog, the Competition and Markets Authority, in its first major probe since Brexit. Arm is the most valuable tech company in the United Kingdom.
Arm will remain headquartered in Cambridge, but there are plans for expansion to build an AI research facility. The facility will support developments in healthcare, life sciences, robotics, self-driving cars and other fields. Plus, NVIDIA says it will build a state-of-the-art AI supercomputer, powered by Arm CPUs. The plan is to attract researchers and scientists from the United Kingdom and around the world to conduct groundbreaking work.
SSE plc Asset Sale to Viaro
Finally, United Kingdom based energy company SSE plc has agreed to sell all of its interests in its portfolio of gas exploration and production (E&P) assets to Viaro Energy for a total consideration of up to $160 million. SSE’s diverse portfolio comprises non-operational equity shares in over 15 producing fields in three regions in the North Sea: the Easington Catchment Area, the Bacton Catchment Area, and the Greater Laggan Area in the Shetland region.