UK M&A activity falls by almost a fifth in 2023
PwC analysis shows that while the majority of UK deals in 2023 were led by corporates, the number of deals involving private equity reached its highest level at 42%
Merger and acquisition activity in the UK fell by almost a fifth in 2023 according to data from PwC.
In total, the UK saw 3,628 deals across 2023, compared with 4,362 the previous year, a 17% decline, almost triple the rate of decline in global deals volumes of 6% over the same period.
Further analysis shows a drop in deal volume during the second half of 2023 (H2 2023) of almost 600 deals compared to the first half of the year (H1 2023).
The volume of activity seen in H2 2023 is the second lowest in the last five years, next to the first half of 2020 which was affected by a slump in dealmaking early in the pandemic.
There was a total of £46bn worth of UK deals in H2 2023 compared to £42bn in H1, bringing the total deal value for the year to £88bn.
However, total deal value in 2023 was down 41% compared with almost £150bn worth of deals seen in 2022.
Despite this, activity for 2023 was still at pre-pandemic levels and as economic conditions ease, confidence is expected to return to the market.
UK deal activity shows the technology, media and telecommunications (TMT) sector saw the most activity for 2023 while energy, utilities and resources saw the highest deal value
PwC analysis shows that while the majority of UK deals in 2023 were led by corporates, the number of deals involving private equity reached its highest level at 42%.
Tim Allen, Deals Industries and International leader at PwC UK, said: “We are seeing cautious optimism about the deal environment with dealmakers showing increasing confidence after the recent economic shocks that have affected the M&A market.
“Companies’ needing to add new technology capabilities, such as Generative AI, are driving deal volumes in the TMT sector whilst energy transition across the board is supporting activity in the Energy, Utilities and Resources sector. The healthcare industry has also proven resilient.”
He added: “With more than half of UK organisations saying they view transactions as the best way to keep up with market changes, we expect to see companies making strategic deals to keep their businesses viable.”
