British 'mega deals’ worth over £1bn are at a three-year high, driving the value of UK M&A deals in 2012 to £242bn.
The number of big increased from 24 to 39, helped by the £5bn acquisition of NDS by US software company Cisco and by the £4.6bn partial acquisition of Alliance Boots by US rival Walgreens.
In total, such deals accounted for £128bn in 2012 and helped boost the overall value of deals by 4.8pc, from £231bn in 2011 to £242bn in 2012.
The most active sector for large deals was food and drink mnufacturing, followed by chemical manufacturing, and professional and business services.
Deals included Diageo’s £1.3bn acquisition of Vijay Mallya’s stake in Indian drinks company United Spirits, as well as the £1.2bn sale of Weetabix to Chinese conglomerate Bright Food.
However, according to the research compiled by Experian (Other OTC: EXPGF - news) , the overall number of deals across mergers, rights issues, flotations, and acquisitions actually fell by 3pc, from 4,683 transactions in 2011 to 4,543 in 2012.
Meanwhile, the amount of bank debt used to fund deals jumped 11.6pc as the debt markets began to recover from the financial crisis, with 309 deals funded by bank debt in 2012, up from 277 in 2011.
However, funding deals through venture capital slipped from 651 in 2011 to 595 in 2012, with slower growth rates effecting the appetite of would be investors.
According to Experian, the UK held up well in comparison to Europe, which saw a 10.2pc downturn in deal volume. The UK represented 47.3pc of all European transactions, up 4pc from 2011. Experian’s Wendy Driver said: “Despite the challenges faced by the eurozone crisis, the UK has proven to be one of the most attractive markets in what has been a subdued year for mergers and acquisitions globally. “