Mergers and aquisitions deals leap in 2011 Q1

Published:  13 April, 2011

LONDON: The number of mergers and aquisitions deals in the UK construction sector has risen dramatically during the first quarter of 2011 almost doubling the number of deals seen in the previous quarter (Q4 2010) according to business and financial adviser Grant Thornton UK.

The firm's Construction M&A Tracker, which tracks announced UK Building & Engineering and Construction Materials deals,  shows an increase in deal volume to 28 deals from 15 deals seen in Q4 2010. This is the highest level of deals since Q2 2010.

The tracker found that the value of the deals announced in Q1 2011 leaped from £161m in Q4 2010 to £2.014bn. Even after allowing for the £1.6bn announced merger between Lafarge Cement with Anglo American,  the rise in mergers and aquisitions activity for the second half of 2010 is significant.

Rupert Rawcliffe, corporate finance director at Grant Thornton said: "Despite concerns about a slowdown in the construction sector’s recovery, we are seeing a lift in the number of deals being done. The market is becoming more confident, with UK businesses looking to acquire strategically to either enhance skillsets or to gain critical mass in new markets and we are still see strong overseas demand for quality UK businesses in the sector.

“The  increase of the lifetime allowance to £10 million effective April 6, 2011 for Entrepreneur’s Relief* in the recent budget will further stimulate mergers and aquisitions activity in 2011 and 2012 allowing qualifying owners to exit earlier than they had envisaged before the announcement.”


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