UK M&A: Can the Budget get deals moving again?
Mike Trenouth, managing director and co-lead of Alvarez & Marsal’s Private Equity Performance Improvement practice, says: “The most recent figures show that the recovery in M&A is still narrow. Although the number of UK deals fell in Q2, the value of inbound investment increased considerably – a signal that capital is still available for the right assets. Buyers have not disappeared, but they are being highly selective and concentrating capital behind businesses where they have conviction on the quality and durability of earnings.
“With the Budget approaching, the government has an opportunity to help turn that appetite into a broader recovery. Investors need certainty and a stable environment in which to make long-term decisions. Giving businesses greater confidence around the tax and regulatory outlook, while continuing to make the UK an attractive place to invest, would help get more capital off the sidelines and into businesses across the UK economy.”
Domestic M&A (Domestic deal count has fallen from 241 in Q2 2025 to 130 in Q2 2026)
“The weakness in domestic deal volumes is more telling than the headline value figures. UK-to-UK transactions have fallen sharply compared with a year ago, even though total deal value has increased. That suggests confidence has not yet returned across the market: larger transactions are getting done, but there remains a much tougher environment for the broader pool of assets.”
“The UK continues to stand out as a destination for private capital. Foreign buyers completed £25.4bn of UK acquisitions in the second quarter, up sharply from £15.7bn in Q1, despite the number of transactions falling. That combination is important: international appetite for UK assets remains strong, but capital is increasingly concentrating around larger, high-conviction opportunities, instead of lifting the market as a whole.”
“The second half could still produce strong headline deal values, but today’s figures are a reminder that this does not necessarily mean a broad recovery is underway. There is clearly capital available for larger, high-quality assets, particularly from overseas buyers, but the real test will be whether activity starts to spread into the wider market. A sustained recovery needs deal counts to rise alongside deal values.”