The City of London has always taken pride in being open to international business. But in recent years, it has become a raiding ground.
FT analysis of four decades of deals shows the current wave of takeovers of UK public companies by foreign acquirers is unusually fierce. Over the past 10 years alone, more than 300 companies with a combined price tag of over half a trillion pounds at today’s prices have been snapped up by overseas buyers. The traffic in the opposite direction has been far more modest by comparison.
This year’s multibillion-pound takeovers of companies — which include testing business Intertek, real estate group Segro and the low-cost airline easyJet — show the continuing vulnerability of UK plc. So far in 2026, announced foreign acquisitions of whole UK-listed companies, including debt, have reached £73bn, the highest level since 2018.
“London has become a clearing house for companies. The UK grows them and then another country acquires them,” says Patrick Sarch, leader of the UK public mergers and acquisitions practice at the US law firm White & Case. A weak domestic institutional shareholder base, the low valuations of British companies compared with their US peers, the barriers to scaling up and the financial incentives to sell up are sustaining the trend — and creating a growing economic problem for the UK. “There is a feeding frenzy and the more that it happens, the more it will. We are in effect exporting economic growth, tax revenue and wealth creation,” says Charles Hall, head of research at the UK investment bank Peel Hunt.
Often, it is foreign private equity groups doing the feasting. The Swedish private equity firm EQT led the £10.7bn Intertek buyout in June, while easyJet accepted a £5.7bn takeover by Apollo after resisting a rival private equity bid. “The UK market is very efficient. Capital moves quickly when there is an opportunity,” says one adviser. Bankers and lawyers in the City are being rewarded. According to London Stock Exchange Group data, the takeover of Segro by Prologis of the US is expected to generate fees totalling $116mn for banks including Morgan Stanley and JPMorgan Cazenove. “We make a good living from the car boot sale of UK companies, but it is sad,” says one City adviser.
The FT analysis of LSEG data shows how the sale of UK companies is a long-term phenomenon, often the outcome when boards cannot find a way to grow faster, or a foreign acquirer is looking for an entry to the market. Governments have avoided blocking deals, except on grounds of national security, and big companies are less shielded by family shareholdings than in Europe, where countries such as France and Germany have experienced lower rates of foreign acquisition. The City of London itself was one of the first targets. In the aftermath of the so-called Big Bang liberalisation in 1986, venerable London names such as Morgan Grenfell Asset Management, SG Warburg, Smith New Court and others were acquired by US or European rivals. The City was increasingly compared to Wimbledon: a place that hosted championships dominated by foreign players.
The millennium brought the next wave of deals, with takeovers of companies such as supermarket chain Asda, acquired by Walmart for £6.7bn in 1999. But this was also a period when UK companies, from the energy group BP to the mobile operator Vodafone, were acquiring foreign businesses. They had high valuations and investors, enthused by the dotcom boom, backed rights issues to raise capital. The contrast with this year, where acquisitions of UK companies have far outweighed outward-bound deals such as Shell’s $16.4bn purchase of Arc Resources, is stark. WPP, the marketing group, was one of the most voracious acquirers under Sir Martin Sorrell, acquiring a series of big US rivals during the 1990s and 2000s. “I would probably move to the US today if I wanted to build a global business, but there’s an even greater need for the UK to repeat what we did then,” says Sorrell.
Another wave of activity came around 20 years ago. Cadbury was acquired by US food group Kraft for £11.6bn after an acrimonious stand-off that raised political concerns about foreign ownership. The mobile telecoms group O2 was acquired by Telefónica of Spain, and banking group Abbey National by Santander. But the high point for worries about UK companies being undervalued and vulnerable came in 2016. Arm Holdings, the Cambridge-based group that had become a global leader in chip design, was taken private by Japan’s SoftBank for £24bn following the Brexit vote. Along with the £400mn private acquisition of DeepMind, the AI start-up, by Google in 2014, the Arm deal offered clear evidence that businesses emerging from the UK’s technology start-up ecosystem, linked to world-class universities, were being picked off before they had fully developed. Saul Klein, co-founder of the venture capital group Phoenix Court, calls the opportunity cost to the UK of Arm being acquired “harrowing”.
AstraZeneca, for a time Britain’s most valuable listed company, was one of a very few to successfully defend itself, fighting off a £69bn takeover bid from Pfizer of the US in 2014. Its market value has since tripled. The appetite for UK companies offers a riposte to those who question the country’s entrepreneurial culture. “We beat ourselves up that we are not good at producing great companies, but the rest of the world obviously disagrees,” says Andy Haldane, president of the British Chambers of Commerce and an FT contributing editor. But these companies are not valued as highly, relative to profits, revenues, assets or cash flow, as they would be in the US, and the differential has widened in recent years.
That reflects the US economy’s higher growth rate and the willingness of investors there to pour huge sums into risky ventures, particularly in the technology sector. The UK market has traditionally been more cautious and focused on dividends, making it harder for businesses to invest in growth.
“[Companies] cannot buy their way out of it. They are waiting to be bought,” says one banker of the valuation gap. The gulf in valuations has been exacerbated by the retreat of investment institutions from the stock market. UK pension schemes have switched heavily into government bonds after accounting rules changed in the early 2000s, and now hold only about 3 per cent of their assets in UK-listed equities. The lack of such a core long-term shareholder base makes it less likely that investors will reject takeover bids and back executives to expand the business instead, as they did with AstraZeneca. In other markets, including the US and Australia, domestic institutions have retained more of a presence, and Goldman Sachs has established a correlation between the level of domestic investment and valuations.
That is set to change. From 2028, UK ministers will have the legal power to force certain pension funds to invest up to 10 per cent of their funds in UK companies and private assets. Hall of Peel Hunt argues that there should be a default allocation of pension savings to UK equities, with members able to pick a different strategy if they choose. Listed company executives cannot wholly blame a lack of support from UK investors for unsolicited takeover bids. Private equity firms have often tracked them for years, looking for companies that could grow faster with more capital investment, a stronger focus and fewer of the distractions that a public listing brings. “Some of the companies have made themselves vulnerable,” says an adviser.
But the UK has moved from having an open capital market that encouraged inward and outward corporate investment into experiencing a one-way flow. Klein, at Phoenix Court, remarks that the country is “one of the best places in the world to buy a team and one of the hardest to build an owner”. Foreign investors are increasingly capturing the investment returns from UK businesses, and there is little sign of it easing — or reason to believe it will. Whether through the City’s openness to bids, the country’s lack of trade barriers, a paucity of domestic investment or lack of corporate ambition, the banquet of British listed companies continues. “This is not happening in France because it does not put its companies up for sale,” Hall says. “We let it happen, and we’ll look back with regret.”
The biggest deals
Morgan Grenfell | Deutsche Bank
The merchant bank that helped fund Britain through the first world war was floated on the London Stock Exchange in 1986, but its share price fell during the crash of 1987 and because of its involvement in the Guinness share-trading fraud. That allowed an expansionist Deutsche Bank to acquire it for £950mn in 1989. It was later renamed Deutsche Asset Management, killing off a hallowed name in the history of world finance.
Asda | Walmart
In 1999, the Leeds-based supermarket chain was all set to crown an impressive turnaround by merging with B&Q owner Kingfisher when Walmart swooped in to snap up the group for £6.7bn. But the US retail giant’s plan to use Asda as a bridgehead to Europe never really succeeded, while an attempt to merge it with J Sainsbury in 2018 was blocked by regulators. In 2021 it sold most of its holding to TDR Capital and the petrol station billionaires Zuber and Mohsin Issa, returning Asda to UK ownership.
Cadbury | Kraft
Founded by John Cadbury in 1824, Cadbury was as famed for its Quaker principles and the factory town it built for its workers in south-west Birmingham as it was for its chocolate and cocoa. It was bought by US processed foods group Kraft for £11.5bn in 2010 after an unusually rancorous takeover battle. Kraft was later censured by the Takeover Panel for making misleading statements and criticised by politicians for closing a factory it had pledged to keep open.
O2 | Telefónica
Spun out of former state monopolist BT in 2001, mobile operator O2’s chances of survival were initially seen as shaky. But clever marketing and rapid rates of customer acquisition allowed it to pay a maiden dividend in 2005. Later the same year, Telefónica snapped it up for £17.7bn. By the 2010s, the heavily indebted Spanish group was hawking O2 around potential buyers, and it returned to semi-British control in 2021 when it merged with Liberty Global’s Virgin Media.
Arm Holdings | SoftBank
Founded in 1990 by a dozen British computer scientists, Arm became a world leader among so-called fabless chip companies, which design chips for others but do not actually manufacture them. Aided by a weak pound in the aftermath of the Brexit vote in 2016, Japan’s SoftBank bought the UK’s leading tech company for £24.3bn in a deal that then prime minister Theresa May called a “vote of confidence” in the UK. But when the time came to relist Arm, SoftBank chose Nasdaq, where its valuation is now almost six times its purchase price.
Shire | Takeda
Founded in 1986 by married couple Harry and Caroline Stratford above a shop in Basingstoke, Shire started as a maker of calcium supplements for osteoporosis. But it gradually shed its Britishness as it looked for markets and products abroad, starting with its 1997 acquisition of US-based Richwood Pharmaceuticals, which made ADHD medication Adderall. A series of acquisitions followed before Shire itself was bought by Japan’s Takeda for £46bn in 2019.
EasyJet | Apollo
British-Cypriot entrepreneur and shipping scion Stelios Haji-Ioannou built easyJet from two leased aircraft in 1995 into one of Europe’s largest budget airlines, though he clashed with its management along the way. Apollo beat out rival asset manager Castlelake to buy the carrier after offering more and pledging to continue paying royalties to use the easy brand. The deal could result in Haji-Ioannou and his family increasing their stake to 49 per cent.
Segro | Prologis
While many commercial real estate groups focus on shops and offices, Segro’s speciality was ready-to-use warehouses that appealed to large corporations. For many years it was known as Slough Estates due to its base west of Heathrow airport, a location that also gave it proximity to fibre optic cables connecting North America to London and helped make it the world’s second-largest cluster of data centres. American logistics and real estate investor Prologis agreed to pay £14bn for Segro in August.
Schroders | Nuveen
Although its origins were German — it was founded in 1804 by Johann Heinrich Schröder, a banker from Hamburg — Schroders became a famous British name in global finance by arranging bond issues for the Confederates in the American civil war and becoming the first foreign lender to Japan. But it struggled to compete with the giant US institutions that muscled their way into the City after the Big Bang. Having sold its investment bank to Citigroup in 2000, it agreed a takeover by Chicago-based asset manager Nuveen in February, robbing the FTSE 100 of its last British asset manager.
UK companies that bought abroad
Vodafone | Mannesmann
Vodafone was launched in 1985, after its parent company Racal won one of the two UK cellular radio licences being sold by the Thatcher government. Under chief executive Chris Gent, it became Britain’s biggest company and pulled off what was for many years the biggest buyout in corporate history: the $183bn takeover of Germany’s Mannesmann. The group later acknowledged it had overpaid. Its empire-building phase is also over; current boss Margherita Della Valle has sold off Spanish and Italian businesses to refocus on the UK.
WPP | Young and Rubicam
Wire and Plastics Products, better known by its initials WPP, was bought up by British businessman Martin Sorrell in 1985 as a listed vehicle he could use to build an advertising empire. A three-decade run of acquisitions included Madison Avenue giants J Walter Thompson, Ogilvy & Mather, and Grey, reaching its peak in 2000 with the £3bn purchase of Young & Rubicam. By 2018, when Sorrell resigned amid allegations of bullying and the improper use of company funds, which he denied, the company controlled over 450 entities.