UK M&A Outlook 2026: AI, Foreign Buyers and H2 Risks

The latest H1 data shows foreign investment continuing to drive UK M&A, with LSEG reporting USD 202 billion in inbound investment during the period, more than double the total recorded in the previous six months. 

That momentum continued this week, as French telecoms billionaire Xavier Niel agreed to acquire e&’s 16.2% stake in Vodafone for approximately £4.4 billion. Reuters reported that the transaction was agreed within days and valued the stake at a 13% premium to Vodafone’s previous closing share price.

The deal brings one of Europe’s most active telecoms investors into Vodafone following the group’s extensive restructuring, including its exits from Spain and Italy and the completion of its merger with Three UK. It also adds another major cross-border transaction to an active week for UK-listed businesses.

And in other news this week:

• ABB agreed a £4.1 billion recommended cash acquisition of engineering group Rotork, marking the Swiss company’s largest-ever takeover.
• Arlington Capital Partners offered £345.6 million for Gooch & Housego, representing a 40.7% premium to the photonics company’s previous closing share price.
• Supermarket Income REIT agreed to acquire three UK supermarket properties for a combined £118 million.

Thanks for reading, and connect with me on LinkedIn if you want to discuss how I can help with your next M&A deal.

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Week Summary | From July 9 to 16, 2026

The UK recorded 25 announced deals between 9 and 16 July, with business services, industrials and consumer the most active sectors, accounting for eight, four and three transactions respectively.

Domestic consolidation dominated overall activity, although inbound buyers were behind several of the week’s headline transactions, including ABB’s proposed acquisition of Rotork and Arlington Capital Partners’ bid for Gooch & Housego.

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Bigger deals, fewer transactions: UK M&A in H1 2026

Global M&A saw dream deals take over H1 2026. LSEG data revealed a surge in $10 billion-plus mega-deals that pushed worldwide M&A value to a new record. Announced deals totalled $2.8 trillion, up 48% year on year, despite a 9% drop in deal volume.

Good news, indeed. Despite uncertainty, war and volatility, dealmakers still have that hunger for strategy and growth. It was no different in the UK M&A market. 

Here, deal value in H1 more than doubled compared with the previous six months, reaching $237 billion, while volume fell 22% from H2 2025 to 1,303 transactions. An analysis by A&O Shearman also revealed AI and carve-outs as boosters to the numbers. But volatility was also everywhere, with a sharp drop in Q2 amid tensions in the Middle East.

From a global perspective, executives interviewed by Reuters pointed to several reasons for the surge in value. There is a change in mindset that makes investors see large deals as requiring as much work as smaller ones, but offering more attractive premiums and synergies. For buyers, large companies also seem more established and competitive than smaller ones, making their multiples far more compelling.

But, of course, we can see the US impact in those numbers. And when we look at the UK in isolation, there are market signals that revive familiar dangers and risks.

AI and foreign investors: How H1 2026 reshaped UK M&A

The same market drivers that pushed M&A indicators higher are also shaping IPOs: technology and geopolitics. EY-Parthenon’s latest analysis points to global initial public offerings linked to AI and related infrastructure as a pivotal factor in IPO results. In M&A, technology was also the largest sector globally, with $649 billion in announced transactions.

But all of this lands differently in the UK. EY’s data also revealed a revival in listings on the London Stock Exchange. There were seven new listings, raising £577 million in the first half of 2026. This represented a 215% increase in proceeds compared with the £183 million raised in H1 2025. But these figures do not stand alone.

At the same time, companies are leaving the London Stock Exchange faster than new ones are arriving. There is a clear example this fortnight: Rotork, which is set to become the latest company to leave the LSE after Swiss group ABB agreed to acquire it in a £4.1 billion deal. We have discussed in previous editions how Britain seemed to be for sale, and that momentum appears to be continuing.

The problem is serious enough for Downing Street to turn to private equity heavyweights and ask why they are not listing British portfolio companies in London, according to the Financial Times. General Atlantic, Elliott Management and EQT are among the firms that have already met with ministers and aides.

The concern is understandable, and data from investment bank Peel Hunt reinforces the scale of the problem: takeover bids for London-listed companies have reached nearly £60 billion this year. Meanwhile, the combined market value of new entrants to the exchange stands at a comparatively microscopic £2.2 billion. Those seven new listings start to feel small by comparison.

The same signals are visible in M&A. Inbound investment dominated the UK’s deal flow, reaching $202 billion, more than double the previous six-month total and the highest half-year figure since H2 2021.

What the UK M&A outlook means for H2 2026

Growth in value, a drop in volume, tech dominance and the impact of geopolitics. The UK remains a market where stability and a positive business environment create opportunities. That is good: it attracts capital. But, at the same time, uncertainty is still raging.

Dealmaking in H2 will require the ability to manage risks ranging from limited diversification and the UK capital market’s dependence on foreign investors to AI valuations and geopolitical tensions. 

Not an easy task.

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