Experian: UK 'mega deals' boost in 2012

Latest figures reveal the UK saw 39 deals worth more than £1bn last year in the most active year since 2009

Last year was the most active year for so-called "mega deals" in the UK since 2009, the latest Experian figures have revealed.

According to the market watcher, the number of mega deals worth more than £1bn in 2012 increased to 39 (up from 34 in 2011) and were valued at a total of £128bn.

The majority of these were cross-border and the IT industry was in the thick of it, with Cisco's £5bn acquisition of pay TV software developer NDS Group. Across the UK the overall number of mergers, acquisitions and flotations fell by three per cent, from 4,683 transactions in 2011 to 4,543 in 2012.

This was, according to Experian, led by a decline in deal making in Q4, but the number of mega deals helped the total value of deals to increase by 4.8 per cent, from £231bn in 2011 to £242bn in 2012.

And the UK is performing well compared with the rest of Europe, which saw a 10.2 per cent drop in deal volume last year, and a 10.5 per cent fall in their total value.

Mid-market-range deals (worth between £10m and £100m) were the worst affected, dropping 6.2 per cent year on year. But on a slightly more positive note, the level of small (£500,000 to £10m) and large (£100m to £1bn) deals remained relatively static.

Elsewhere, deals in the Asia-Pacific region were down by 15.2 per cent in volume and 13.5 per cent in value, while in the US activity was down by just under five per cent, and value by 6.4 per cent.

Wendy Driver, business development manager at Experian UK&I, said: "Despite the challenges faced by the eurozone crisis, the UK has proven to be one of the most attractive markets in what has been a subdued year for mergers and acquisitions globally.

"The quality of UK businesses and assets, as well as favourable interest rates, has been consistently attractive to overseas investors, which is helping to keep mergers and acquisitions activity buoyant and may serve to boost confidence further."

In addition, the US dominated the chart of countries dealing with the UK in 2012 - accounting for 12.1 per cent of deals. Next was Germany, accounting for 2.9 per cent of deals; followed by France with 2.4 per cent of deals. Australia and Ireland also appeared in the top five, accounting for 2.1 per cent and 1.9 per cent of deals respectively.