Daniel Black
Hello,
There are reasons to be cheerful this Friday. New data shows the UK’s IT sector had a strong year for dealmaking, while PwC is sounding bullish on the prospects for increased M&A activity in 2025.
The rumour mill has also been busy with a few eyecatching deals, including:
- KKR has bid £4bn for Thames Water
- Santander denied plans to sell its UK business
- BP is considering selling its Castrol unit for around £8bn
Thanks for reading, and connect with me on LinkedIn if you want to discuss how I can help with your next M&A deal.
Deal Tracker
Our weekly roundup of all the confirmed M&A deals in the UK.
The Rumour Mill
- UK inflation rises to 10-month high of 3% in January
- The pound edges up after the jump in inflation
- UK wage growth accelerates in final quarter of 2024
- UK tax officials drop plans for crackdown on buyout firms and accountancies
- UK CMA is to expedite M&A reviews, following government pressure
- KKR makes £4bn management-buyout bid for Thames Water
- Moore Global reports record revenues for 2024 as PE investments and AI adoption fuel client growth
- Rosebank is in talks to buy Electrical Components for £1.6bn
- Assura rejects KKR’s £1.56bn bid approach
- CCLA hires Evercore bankers to explore sale, valued up to £150m
- Elliott pushes BP for cost cuts and divestment in order to preserve its independence and close the performance gap with Shell
- BP considers sale of its Castrol unit for up to £7.9bn amid Elliott push
- CMA pauses GXO Logistics’ Wincanton takeover, citing competition concerns for supermarkets
- Pershing Square proposes £714m deal to increase Howard Hughes stake
- Macquarie agrees to acquire Renewi for £699m
- Steven Madden is to buy Kurt Geiger for £285.5m
- Santander denies plans to sell its UK business despite reported talks with NatWest
- CD&R explores a 25-30% stake sale in UK’s Motor Fuel Group, valuing it at £7bn
- The UK CMA provisionally clears Boparan’s takeover of ForFarmers
- Shuka Minerals hopes to seal Kabwe acquisition by end-March
- Europa Metals abandons bid for Ireland’s Tynagh project
- Anglo American to sell its nickel business to MMG for up to £400m
- Anglo American is to retain a 20% stake in Anglo American Platinum after its planned demerger this summer
- BC Partners aims to sell Keesing
- Bridgepoint considers sale of Finnish clean tech firm Evac
- JMG Group set to continue M&A spree in 2025
- CMA clears Amex GBT’s £453m planned purchase of rival CWT
- PainReform is set to acquire AI-driven solar analytics platform DeepSolar
- Apis Growth Fund I exits investment in financial services provider Baobab
- Kelso Pharma buys ALTURiX
- Glencore reviews its London listing as miners sour on UK market
Salaries and bonuses
- Lloyds Banking Group sets new bonus cap at eight times salary
- NatWest raised bonuses by 27% for its top bankers in 2024, with the average bonus for MRT rising to £404k
- HSBC’s 2024 bonus pool totaled £3bn, with top bankers averaging £1.1m in total compensation amidst ominous bonus rumours
- Credit Agricole plans 5% to 10% boost to its investment bank bonuses
Job moves
- Two Senior Ardian dealmakers are to depart after 20 years
- BCI Private Equity establishes European hub in London
- Barclays hired a Nomura MD who’s been out of the market for two years
- Square’s European head John O’Beirne named new chair of Irish fintech body FPAI
- EQT appoints Per Franzén as CEO and managing partner
- TSG Consumer Partners names Beth Pickens as head of London office
- Colesco Capital appoints Co-Head of Origination
- BNP Paribas promotes Maillard to COO
- Former JP Morgan exec Basil Bailey appointed new TrueLayer Ireland CEO
- UBS promotes 174 people to managing director
- HSBC axes 40 dealmakers in Hong Kong as part of revamp to cut costs, source says
- Former HSBC boss Flint to step down as CEO of UK sovereign wealth fund
- Deutsche Bank names Alison Harding-Jones co-head of investment bank
- Moneyhub shutters D2C business, lays off “around 30%” of UK workforce
- UK fintech Zepz reportedly set to lay off around 200 employees
Market Trends
IT sector finishes 2024 with a flourish
The UK’s IT services sector saw an increase in M&A deals last year, according to a new report from Moore Kingston Smith. A total of 641 completed deals marks a 3% increase from 2023, with Q4 being particularly busy.
There were 172 deals completed in Q4 compared with 162 transactions in Q3, which the report partly attributes to a flurry of activity in the run-up to the Chancellor’s Budget at the end of October.
Despite volatile macroeconomic conditions, PE remained the driving force, backing 70% of deals in Q4. Key trends included a spike in data storage deals (56% of Q4 transactions) and AI deals such as Thoma Bravo’s £4.2bn acquisition of Darktrace.
All set for a bumper 2025?
Momentum is building in the UK M&A market and favourable market conditions will lead to an increase in deal activity in 2025. Or so says PwC in its latest analysis of the prospects for M&A this year.
It references data which shows that M&A deal values in the UK jumped by a whopping 37% in 2024, while deal volumes are also outperforming the EMEA region. Almost a fifth of the region’s companies for sale are based either in the UK or Ireland.
A stable political environment, lower interest rates and investors’ pressure on private equity to show returns point to increased activity.
Deal surge in the South-East
At a more local level, M&A activity in the South East of England (not including London) saw a 24% surge in deal volume in 2024 to 290 transactions in total, surpassing most UK regions with a net increase of 56 deals. This is a notable recovery, though still 11.3% below the five-year peak of 327 transactions in 2021.
The North East also showed significant growth, up 34%, while London recorded only a modest 3% rise.
