UK merger committee records first loss since 2014

According to Financial Times (FT), the UK’s Takeover Panel, which regulates M&A, recorded its first loss due to the low number of mergers among UK companies.

The committee is funded by commissions it receives from companies and financial advisors. As of the last financial year, which ended in March, the deficit was £3.8 million, the committee’s first loss since 2014, according to FT calculations.

“In the second half of the financial year – from October 2022 to March 2023, activity in the markets decreased noticeably due to a sharp acceleration in inflation, which caused a significant increase in discount rates,” the committee noted. “Thus, the committee’s total annual revenue fell by 25%, to £11.4 million. At the same time, expenses increased from £13.5 million to £15.7 million due to increased costs for legal services and IT services.” Compared to 2021, the number of mergers and acquisitions in the UK decreased by 20%, to 48 transactions, of which there were only 12 large transactions (value of £1 billion or more). A year earlier, there were 16 large transactions in the country.

However, the FT notes that, despite the annual loss, the committee retains a surplus of funds obtained through savings from previous years – just £33.5 million.

Read more about what is happening in the Russian mergers and acquisitions market in the Kommersant article. “No time for slow dancing”.

Evgeny Khvostik