South East business deals down 8 per cent last year and transaction value plunges

The South East remained the busiest area for deal-making activity outside London last year, but the value of transactions in the region more than halved compared to 2022.

According to its merger and acquisition (M&A) review from credit group experian, the recorded value of deals in the South East in 2023 came in at £16 billion compared to £36 billion seen in 2022.

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There were 1,126 deals involving a South Eastern business in 2023, down 8% on 2022, while companies in the South East had a role in 17% of the UK’s total deal count in 2023 (6,427 deals, down from 7,304 in 2022), which accounted for around 8% of total value.

What's more, there were just two deals with a consideration of £1bn or more in the region, down from nine deals in 2022 - representing the slowest year at the higher end of the market in more than ten years, the report showed.

Breaking the numbers down by industry, showed that the information and communication sector remained the South East's likeliest source of M&A but here there was still a 9% decline in volume year-on-year (y-o-y).

There was also a 10% downturn in financial services transactions, and in hospitality, there was a substantial 29% y-o-y decline and a 19% downturn in transport and logistics y-o-y.

However, there was 'bucking the trend' growth in the professional, scientific and technical industry, where volume in the South East was up by 2% y-o-y to reach 295 transactions.

The region's two largest M&A deals included Newbury-based mobile giant Vodafone. One was agreeing the sale of the latter's Spanish business to Zegona for around £4.4bn and the other was US cable business Liberty Global taking a 4.9% stake in Vodafone for around £1.2bn.

Vodafone has also since confirmed plans to combine its domestic business with CK Hutchison-owned Three UK - a deal currently being investigated by the Competition and Markets Authority.

Meanwhile, in funding terms, the number of private equity transactions declined by 18% in the South East in 2023 and the value of PE-backed deals, at £6.2 billion was almost £3bn under 2022’s total.

Authors at the experian report said: "The South East of England remains the busiest region for deal making outside of London and, while transaction volume fell last year - having reached record levels in 2022 - it still sits at the higher end of our ten-year review period and outperforms the wider UK market across a range of key metrics."

They added of 2023: "Corporate acquisitions, accounting for 72% of all transaction activity, dominated the regional deal landscape, and the higher interest rate environment encouraged deal makers to refocus their attention towards small and mid-cap transactions."

For the full report, click HERE.