Daniel Black
Hello,
There’s optimism in the air this week, with both JPMorgan and Morgan Stanley cautiously anticipating a strong M&A rebound in 2025. The uncertainty around Trump’s tariffs are the main cause of concern for analysts.
The rumour mill has been active as a result, with my highlights including:
- Rio Tinto and Glencore calling off their merger talks
- International Paper getting sign off on its DS Smith acquisition
- A new Global Chair of IB at Barclays
Enjoy the read and get in touch on LinkedIn if you have any feedback or tips to share.
Deal Tracker
Our weekly roundup of all the confirmed M&A deals in the UK.
The Rumour Mill
- Bank of England’s Alan Taylor advocates for quick interest rate cuts, predicting four reductions in 2025
- The BoE, led by Deputy Governor Sam Woods, expresses willingness to collaborate with Keir Starmer’s government on easing fiscal regulations to stimulate economic growth, as global regulators, including Trump’s administration, look to reduce banking rules.
- The BoE delays tougher bank capital rules by a year to January 2027, awaiting clarity on US actions under the new US administration
- IMF raises UK’s 2025 growth forecast to 1.6%, positioning it as the third-strongest in the G7, behind the US and Canada
- UK borrowing jumps to £17.8bn in December as debt interest climbs
- Sterling has been experiencing volatility recently, rising to a two-week high against the dollar on Wednesday, then falling slightly on Thursday due to uncertainty over Trump’s tariff plans.
- WPP plans US expansion having ‘looked at’ New York listing
- Santander reevaluates its UK operations, considering a potential exit as it shifts focus to expanding its digital bank, Openbank, in the US. Despite this, Spain’s most valuable lender plans to retain its corporate and investment banking presence in London.
- UK considers higher cap on foreign state ownership of British media
- The People’s Pension, managing £31bn in assets, plans to invest up to £4bn in private markets by 2030, focusing on infrastructure and real estate
- BNP Paribas has ‘no plans’ to expand its wealth management presence in the UK, instead focus on strengthening its networks in markets like Belgium, Italy and Germany
- Bureau Veritas ditches talks with UK’s Intertek to seek £26.2bn Swiss deal
- Rio Tinto and Glencore discussed merger but talks no longer active
- Hitachi to buy Omnicom, a digital rail monitoring business, from Balfour Beatty
- International Paper is set to get EU approval for its £5.8bn purchase of UK rival DS Smith
- IK Partners considers £1.7bn sale of France’s Kersia
- HongShan nears £0.9bn to acquire Marshal Amplification
- An activist investor pressures Smiths Group to break up its airport scanner business
- Sports Platform DAZN gets a £0.9bn loan for its Foxtel acquisition
- Kantar plans to sell media business to H.I.G. For £0.8bn
- Carlyle’s potential Calastone sale might exceed £600m in valuation
- Sage sues Biogen in wake of £381m buyout offer
- Kanadevia Inova bags 11 UK biogas sites via takeover of Iona Capital
- KKR is to acquire Dawsongroup
- SMC Entertainment signs a letter of intent to acquire Flax Tech
- TDR Capital is to buy majority stake in CorpAcq
- Energean reported a 26% revenue increase in 2024, driven by “strong performance” from its core Israel operations, as it completes asset sales in Egypt, Italy and Croatia
- EnQuest is to acquire Harbour Energy’s Vietnam assets for £68.3m
- Digital 9 Infrastructure strikes a deal to sell its Atlantic and Irish Sea subsea fibre business, Aqua Comms, to EXA Infrastructure for £43.9m
- discoverIE buys German sensor maker Burster for up to £36.3m
- Alpha Real Trust buys five English crematoria for £34m
- Gordon Brothers eyes UK and US brands to transform into asset-light companies
- LGIM’s European ETF business experienced £2.9bn outflows in 2024, the highest among European providers
- Abrdn assets rise to £511bn in 2024 amid slowdown in outflows
- US hedge fund Saba loses first showdown with UK investment trust shareholders
- Fund giants mull passing on investment research costs to UK investors, following new FCA rules allowing cost “rebundling”.
- Wishbone Gold PLC, a Gibraltar-registered miner, is set to acquire Evrensel Global Natural Resources
Salaries and bonuses
- Morgan Stanley hikes European dealmaker bonuses by 20%
- JPMorgan announces bonuses for 2024, with investment bankers seeing a 15% increase, while some technology and back office teams face lower or flat bonuses
Job moves
- Stonehage Fleming hires ex-HSBC private bank veteran Stuart Parkinson as CEO
- Barclays names former European M&A head Colizzi chair of investment banking
- The chair of the UK Competition and Markets Authority (CMA), Marcus Bokkerin steps down and is replaced by Amazon’s former boss in Britain, Doug Gurr. His appointment signals a pro-investment stance and potential leniency towards Big Tech deal-making.
- Bain Capital names Sessa as co-head of private equity in Europe
- BGF makes a series of Partner appointments in investment and portfolio teams
- McWin appoints Guillaume Charlin as managing partner
- Former Blackstone senior managing director Stephen Lewis joins Prosek Partners as partner in London
- Bridges Fund Management names Tom Street as investment director
- Goldman Sachs installs Anthony Gutman and Kunal Shah as new CEOs of its London operations
- Lazard promotes nine managing directors in Europe
- Brevan Howard cuts 7% of trading staff after poor performance
- Schroders to cut 200 jobs under new boss Oldfield
- Panmure Loberum, an investment London bank, has made another round of job cuts, months before bonuses
Market Trends
UK CEOs have bold plans to drive growth
The latest UK CEO Survey from PwC reveals a pivotal moment for business leaders, with nearly all (98%) planning to overhaul their business models in 2025. A third (34%) of correspondents are concerned their business won’t be able to survive the next decade without significant change — up from 21% last year.
Over the course of the past four cycles of the PwC CEO Survey, confidence in the three-year outlook on revenue growth has dropped from 71%, to 64%, to 61%, and now sits only at 57%. However, 61% of CEOs are expressing optimism for the UK economy for 2025, up from 39% last year.
In order to drive growth, CEOs are focused on workforce transformation and technological investments, with 70% investing in retaining talent and 61% backing AI and emerging technologies.
IPO Watch
More analysis from PwC, this time on EMEA IPOs. The themes emerging mirror insights from the CEO Survey: a clear imperative to adapt in an always changing landscape. While European IPO proceeds have more than doubled to £12.34bn, UK IPO activity remained subdued at £0.7bn.
However, the first net flows into UK equities in 42 months and the announcement of larger listings in London towards the end of the year signal a turning point.
Changes to UK M&A rules
The UK’s merger control regime has also undergone significant changes, effective from January 1, 2025, with updated thresholds and new provisions under the Digital Markets, Competition and Consumers Act 2024.
Key updates include:
- Raising the turnover-based threshold from £70m to £100m
- Introducing a “small merger safe harbour” for transactions with UK turnover below £10m
- Expanding CMA’s jurisdiction to include mergers involving parties with at least 33% UK market share and a UK turnover exceeding £350m.
Finish the year with a flourish
In public M&A, December marked a strong finish to the year, according to Herbert Smith Freehills. Eight firm offers were announced including Aviva plc’s £3.7bn offer for Direct Line Insurance Group.
High-value bids accounted for 30% of the offers (over £1bn) compared to 7% in 2023 and 27% in 2022. The average deal value rose substantially in 2024, with the average value being £977m, which dwarfs the 2023 average of £362m.
Fundraising
- International hedge funds and private equity firms pour more money into Lloyd’s tax-exempt ILS vehicle, which doubled in size to £1.54bn in 2024
- Fundment to hit £150m in valuation with Highland funding
- Ex-Millennium portfolio manager Robert Bonte-Friedheim is to launch a $200m hedge fund based in London
