United Kingdom

The M&A state of play

UK M&A reached record levels in the first half of 2026, although activity was volatile across the period. Notwithstanding persistent concerns over energy supply and inflationary pressures, central banks maintained interest rates at broadly stable levels throughout the period. Domestic political uncertainty drove gilt yields higher over the second quarter but UK equities proved comparatively resilient and a series of higher value deals bolstered market confidence.

On the target side, in the first half of the year, 1,850 transactions were announced. Of those, around 18% disclosed deal values, with those deals worth an aggregate value of around £197 billion. This represented more than double the aggregate deal value when compared with the corresponding period in 2025.

The uptick in aggregate deal value was driven primarily by a series of large-cap deals. The return of higher value deals signalled a degree of confidence that has been absent in recent years, though deal announcements tended to cluster around periods of relative market stability, and transactions generally fell into either small-cap or large-cap categories without any significant resurgence of the mid-market. For many companies, both domestically and internationally, M&A seems to remain the most compelling route to achieve the scale required to keep up with rapid technological change.

2026's market-defining transactions

The UK has continued to be one of the most active jurisdictions globally for large-scale M&A in 2026.

Key deals announced in 2026 included a number of marquee public takeovers, with Prologis's £18.7 billion offer for UK REIT, SEGRO, the largest UK public offer to be announced since Takeda / Shire in 2018. Ashurst Perkins Coie advised on both. Unilever's £32.3 billion sale of its food business to McCormick topped the overall UK league tables.

The top 10 publicly disclosed UK M&A deals announced in 2026 are as follows:

Source: Mergermarket

Financial services consolidation

Aggregate disclosed value for UK M&A in the Financial Institutions sector surged four-fold to £44 billion in H1 2026. Wealth and asset management was the busiest sub-sector, followed by insurance, with the offers for Schroders, Beazley and Janus Henderson all helping to push the aggregate deal value to record highs.

The primary drivers for M&A in the Financial Institutions sector mirror broader M&A themes – acquirors are looking to build scale, diversify revenue streams and to enhance their own digital and AI capabilities. We expect further consolidation in this sector in the next 12 months, particularly in the fintech space, as larger institutions look to acquire tech-enabled platforms.

A continuing shift from public to private

Despite improved IPO activity in the US, the UK IPO market has remained sluggish, with a continued net outflow of companies from the public markets.

The perception that UK equities are undervalued has persisted for a number of years. This has both attracted acquirors and encouraged target boards to re-evaluate the benefits of remaining listed. Multiple arbitrage is limiting larger companies from building scale through acquisitions, while smaller companies are struggling with access to liquidity. For both, the private arena offers a viable alternative. While there have been attempts by the UK Government to re-imagine equity capital markets this trend looks set to continue.

There are two counterpoints to this: first, shareholders are challenging bids they consider to be opportunistic, even in the context of recommended deals. A good premium to the share price is no longer always sufficient, and acquirors are having to adapt their tactics. PE acquirors, for example, have offered unlisted securities as an alternative consideration in a quarter of all take-privates in the first half of the year as they sought to gain shareholder support. Second, there is some congestion in the private markets. This has led to delayed or extended sale processes and valuation and financing pressure.

Overseas interest and competition for assets

International acquirors accounted for more than three quarters of the aggregate deal value in the UK in the first half of 2026. In the public markets, the split was even more pronounced, with international acquirors accounting for a striking 82% of aggregate deal value in the first half of 2026. Low valuations and favourable currency dynamics have helped to attract overseas acquirors to the UK market where asset-heavy UK targets offer a natural hedge against tech-focused US investments. US acquirors were particularly active on larger deals, participating in around 263 deals worth over £110 billion in aggregate deal value.

Competition for attractive assets continued to be strong as well-resourced corporates, PE and sovereign wealth funds looked to deploy a wall of capital, although we did not see as much of an inflow from the Middle East as the market initially anticipated.

Consortium arrangements, co-investment vehicles and new sources of financing, including private credit, have all helped acquirors mitigate risk on larger transactions.

Mind the gap

Over the past decade, the regulatory environment for M&A has become increasingly complex. Conditions attached to regulatory clearances have lengthened deal timelines and introduced additional execution risk. This is most pronounced in larger mergers – for example a public offer valued above £1 billion takes, on average, around double the time from announcement to completion as a transaction valued below £1 billion.

Whilst acquirors will hope that the key regulatory authorities continue to review their policy in this area and shift focus to driving growth (for example see the Competition and Markets Authority's new “4Ps framework”: pace, predictability, proportionality and process), with acquiror deal timelines extending, parties have an increased focus on risk allocation prior to completion. This is more pronounced in the private markets where a buyer and seller can largely, subject to certain regulatory considerations, agree the scope of information that will be provided to a buyer between signing and completion, what actions of the target group will require buyer consent and what power the buyer has to walk away/price chip following signing. Global political uncertainty is pushing buyers to argue for material adverse change walk away rights and sellers are weighing such requests carefully in the light of the longer potential gap period and any enhanced information provision.