2014 was a great year for international M&A with both inbound and outbound activity performing well. Improving economic sentiment in the UK has given North West companies the confidence to invest for growth and we expect this to continue in 2015.
According to our Cross-Border Deals Radar, North West corporates injected over £2bn into overseas businesses in 2014, with the volume of deals increasing by 15 per cent on the previous year. Transactions including AMEC's £1.9bn cash offer for Swiss engineering firm Foster Wheeler and PZ Cussons' £51.8m acquisition of Australian organic yoghurt brand Five:am, demonstrated how the appetite for overseas assets remained high.
Meanwhile, inbound activity, where overseas buyers are investing in the UK, also remained healthy last year following the completion of 40 transactions worth £1.27bn. This represented a 26 per cent increase on 2013 in terms of value, but the volume of transactions fell by 25 per cent.
With the final Budget from this government just around the corner and the General Election fast approaching, this could introduce a degree of uncertainty for M&A in the short-term. However, we expect the overall growth trend in cross border activity to continue in 2015, particularly on the UK-North America corridor as US companies seek to take advantage of the strong currency to do deals.
In addition to this, the Northern Powerhouse initiative is already turning 2015 into a very interesting year. The move to improve connectivity between northern towns and cities should provide a boost to the competitiveness of businesses in the region over the medium term making them increasingly attractive to foreign buyers.
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