Japanese groups invest £4.2bn in the UK and Ireland between 2013 and 2017, reveals new M&A report by Livingstone

  • Transaction values in UK and Ireland reached £978m from Japanese group acquisitions in 2017
  • 230 middle market companies acquired across the globe by Japanese groups – up 13% from 2016
  • Global increase in total transaction values globally to £15.9bn in 2017 –up 15%
  • Europe continued to experience high buyer interest from Japan in 2017, with average transaction value reaching £69m, up 6% from 2016

Findings released today from Livingstone, the international mid-market M&A and Debt Advisory firm, show that merger and acquisition (M&A) activity by Japanese groups in 2017 grew by 42% over 2013 and 13% over 2016 across the globe, stimulated by Japanese interest in international expansion with the encouragement of the Japanese authorities.

The latest findings also reveal that Japanese groups acquired 215 middle market companies in Europe between 2013 and 2017, reaching an aggregate value of £13.5bn.

Between 2013 and 2017, the UK & Ireland were the most popular destination for Japanese acquirers, with the number of transactions equalling 62 out of the total of 215, accounting for 29% of all transactions. In 2017 alone, the UK & Ireland secured 14 deals with Japan, accounting for 37% of the European total.

The UK & Ireland was the most active territory by aggregate deal value for three of the five years under review (2013, 2016 and 2017). In 2017, the transaction values in UK and Ireland reached £978m from Japanese group acquisitions.

Overall M&A activity in UK & Ireland overtook the DACH region across the five years under review, with Eastern Europe (32), Mediterranean Europe (30) and then Benelux (19) following behind. The Nordic Countries were the least active, with only 14 deals having been completed.

The top targeted UK & Ireland sectors across the 5 years were: Industrial (71 deals), Consumer (46), Business services (35), Media & technology (28), Healthcare (16). 

Europe continued to experience high buyer interest from Japan in 2017, with 38 deals and an average transaction value reaching £69m, up 6% from 2016. The top targeted European sectors between 2013 and 2017 were: Consumer (18), Business Services (15), Industrial (12), Healthcare (7), Energy (5), Media & Technology (5).

Jeremy Furniss, Partner at Livingstone, comments on the findings: 

“Japan has emerged as a major participant in global M&A flows over the last decade and has its sights firmly set on Europe, in particular the UK & Ireland.  Although our figures show that Japanese international investment is slightly lower than its peak in 2016 when transaction values reached £1.1bn, it is encouraging to see that the UK & Ireland remains an attractive option for Japanese M&A activity and reinforces the ongoing trend for the UK to be seen as a market of strategic importance. Despite concerns around Brexit, 2017 proved to be the second most active year for Japanese acquirers over the period under review.

“Activity in the Consumer, Industrial and Business Services sectors remained most prominent across the five years as Japan’s groups have looked to the UK & Ireland to enhance their global footprint. This high and sustained activity is due in no small part to the region’s strong technology base, skilled workforce and world-class service economy. However, the picture is less clear in the first half of 2018, with M&A activity slowing across Europe, albeit more noticeably in mainland Europe rather than the UK & Ireland.”