UK merger and acquisition activity is sending two different signals in 2026. Deal counts weakened in the second quarter, while the value of foreign acquisitions of UK companies rose sharply. That is why a single headline saying “UK M&A is up” or “M&A is down” is usually too crude.
The Office for National Statistics recorded a provisional 353 completed M&A transactions involving UK companies in Q2 2026, down from 407 in Q1. At the same time, the value of inward M&A — foreign companies acquiring UK companies — rose to £25.4 billion, from £15.7 billion in Q1.
The important qualification is concentration. ONS says the high Q2 inward value included a small number of acquisitions worth more than £1 billion. A stronger aggregate value can therefore coexist with fewer completed deals.
The Q2 2026 UK M&A picture
Across domestic, inward and outward transactions, the provisional combined deal count fell from 407 in Q1 to 353 in Q2. Monthly activity also slowed from 139 transactions in April to 102 in May before recovering slightly to 112 in June.
The three categories moved differently:
- Inward M&A: £25.4 billion of completed acquisitions by foreign buyers, up £9.7 billion from Q1. ONS estimated 162 inward transactions, down from 183 in Q1.
- Domestic M&A: £4.2 billion of UK-on-UK acquisitions, up from £1.8 billion in Q1. The number of domestic deals fell to 130 from 142.
- Outward M&A: £2.7 billion of UK acquisitions of foreign companies, down from £4.1 billion in Q1. Deal count fell to 61 from 82.
Those figures are provisional and ONS warns that early M&A estimates are subject to revision, often upwards. They cover transactions worth £1 million or more that result in a change of ultimate control.
Foreign buyers are still an important part of the UK deal market
The strongest number in Q2 was inward value. Foreign buyers completed £25.4 billion of acquisitions of UK companies, compared with £9.7 billion in the same quarter of 2025.
That does not prove that UK companies are universally “cheap”. Large deals can dominate a quarterly value series, and acquisition decisions depend on strategy, financing and asset quality as well as valuation. But persistent inward activity is relevant to the long-running question of whether international buyers see more value in UK assets than public-market valuations imply.
For investors, the better question is not whether foreign takeovers are good or bad in aggregate. It is which sectors combine globally valuable assets with valuations or ownership structures that make a transaction plausible.
Why deal count and deal value can diverge
M&A value is lumpy. One multibillion-pound acquisition can move a quarterly total more than dozens of smaller transactions. Deal count is therefore often the cleaner measure of breadth, while aggregate value tells you more about the size of capital being deployed.
Q2 2026 is a good example: inward value increased substantially even as the number of inward transactions fell. Domestic deal value also rose while domestic deal count declined. The market was not simply “busier”; more value was concentrated in fewer completed transactions.
What financing conditions change
Interest rates affect M&A through the cost of debt, the return hurdle used by financial sponsors and the discount rate applied to future cash flows. Lower or more predictable financing costs can make leveraged transactions easier to underwrite, while volatile rates widen the gap between what buyers can pay and what sellers will accept.
That is one reason UK M&A should be read alongside the Bank of England rate outlook and UK gilt yields. The relevant variable is not only the current Bank Rate but the financing curve and confidence that the cost of capital will remain within the deal model.
Sterling matters, but not mechanically
A weaker pound can reduce the foreign-currency cost of a sterling-denominated target, but exchange rates are only one part of a cross-border acquisition. The same currency move can reflect weak UK growth or higher risk, which may reduce the attractiveness of some assets.
The more useful framework is to consider valuation, currency, financing and the strategic value of the asset together. See Briefed's sterling outlook for the main drivers of GBP rather than treating the exchange rate as a standalone takeover signal.
The CMA is part of the timetable, not a generic anti-deal signal
Large or competitively significant transactions can face Competition and Markets Authority review. The live CMA mergers case list in September 2026 includes inquiries across utilities, retail, healthcare, financial services and other sectors.
Regulatory scrutiny should therefore be assessed deal by deal: market definition, concentration, remedies and jurisdiction matter. A high-profile intervention in one sector does not imply that UK regulators oppose inbound M&A generally.
What to watch next
The next ONS M&A release is scheduled for 1 December 2026. The useful questions are whether transaction counts recover from the Q2 slowdown, whether inward value remains elevated without relying on one or two very large deals, and whether domestic deal breadth improves.
For the current public-company offer universe, use the live UK takeover tracker, which reads the Takeover Panel disclosure table hourly. Company-specific reporting sits in Briefed News and the M&A topic. This Note remains the slower-moving reference for the UK deal environment.
Primary sources
- Office for National Statistics: Mergers and acquisitions involving UK companies, April to June 2026.
- Office for National Statistics: Mergers and acquisitions datasets and release calendar.
- Competition and Markets Authority: live merger cases and projects.
Checked 11 September 2026. Latest ONS M&A release: 1 September 2026. Next scheduled release: 1 December 2026. Q1 and Q2 2026 estimates are provisional and may be revised.