PwC reveals more than half of British CEOs expect major takeovers in the next three years.

PwC reveals more than half of British CEOs expect major acquisitions in the next three years, with UK mergers and acquisitions down nearly 3% by 2566.

On February 7, 2024, Bloomberg News reported that a survey by PricewaterhouseCoopers (PwC) revealed that the downturn in UK deals was likely to ease as interest rates stabilized, with more than half of UK company CEOs expecting to make a major acquisition in the next three years.

PwC said that mergers and acquisitions in the UK are down almost 20% in 2566 compared to the previous year, but added that a survey of 300 senior executives showed that confidence is returning as inflation slows and interest rates peak.

Although a PwC survey indicates that the UK is the top investment region for US companies and is becoming increasingly attractive for businesses in China, it also found that UK companies are planning to increase acquisitions.

Tim Allen, PwC's Head of Deals, Industry and International, said: "More than half of UK companies see transactions as the best way to keep up with market changes. We expect to see companies making strategic deals to keep their businesses running."

Undervalued properties could incentivize takeovers, particularly from foreign entities. The MSCI UK EBITDA Multiple, a benchmark used to assess merger and acquisition targets, shows a 48% discount for US companies, up from 15% in 2558.

Potential drivers of mergers and acquisitions include the need to increase capabilities in emerging technologies such as generative AI in the technology, media, and telecommunications sectors, while a green transition should promote acquisitions of energy, utilities, and resources.

PwC also notes the growing role of private equity in UK M&A, accounting for 42% of all such investor-related transactions in 2566.

Reference: bloomberg.com