Legal and Finance: Acquisitions and Mergers Still Slow
The average value of mergers and acquisitions by UK companies has reached its lowest level since the tail end of the last recession in 1994, according to the latest figures published by the Office of National Statistics and analysed by Grant Thornton.
Expenditure decreased by more than half between the 2002 average quarterly value of pounds 6.2 billion and first quarter 2003's pounds 3 billion. The figure compares with an average quarterly value of pounds 7.1 billion in 2001 and of pounds 26.6 billion in 2000.
The figures also show a return to the trend towards paper consideration for UK companies acquiring in the UK, with the issue of ordinary shares accounting for 20 per cent of M&A expenditure and issues of fixed interest securities for 12 per cent, up from respective expenditure of three per cent and six per cent at the same time last year.
The statistics also show that expenditure on acquisitions abroad by UK companies almost doubled in the first quarter of 2003, compared with the average quarterly value of 2002 - pounds 11.1 billion against pounds 6.6 billion - reaching its highest level since 2001.
However, this was bolstered by an exceptionally large acquisition during the first quarter of 2003, namely Household International by HSBC Holdings for a reported pounds 9. …