UK Stock Market Shrinks as M&A Activity Surges, Led by Foreign B

The UK stock market is shrinking at its fastest pace in over a decade due to increased mergers and acquisitions (M&A). About 45 companies have delisted from the London market this year, a 10% increase from last year, marking the highest number since 2010. The total value of deals targeting UK companies has surged 81% to over $160 billion.

Foreign private equity firms are particularly active. Starwood Capital Group (USA) acquired Balanced Commercial Property Trust Ltd. for £674 million, while Sweden’s EQT AB bought Keywords Studios Plc for £2.1 billion. Thoma Bravo purchased Darktrace Plc for $5.3 billion. These deals highlight the appeal of the UK’s undervalued market, which is at a 40% discount compared to global peers.

Significant cross-border deals include Czech billionaire Daniel Kretinsky’s acquisition of Royal Mail’s owner for £3.6 billion and Carlsberg’s £3.3 billion purchase of Britvic Plc. More deals are underway, including Aviva’s interest in Direct Line Insurance Group and General Atlantic’s pursuit of Learning Technologies Group Plc.

Amid these transactions and a lack of IPOs, the number of UK-listed companies continues to decline. Only 11 IPOs have occurred in London this year, raising $1 billion, an 11% drop from 2023. Companies like Just Eat Takeaway.com NV and Flutter Entertainment Plc are shifting their primary listings overseas.