Deal-making is back as confidence recovers, the UK boss of PwC has declared.
Kevin Ellis, the auditing giant’s chief executive, said potential buyers are ready to unleash a ‘wall of money’ having been sitting on their hands for the past year.
Merger and acquisition (M&A) activity has dwindled since 2022 as rising interest rates made it harder to finance deals.
But Ellis said that a ‘more positive vibe’ late last year turned into increased ‘activity levels in December and January’ as private equity firms and sovereign wealth funds eye acquisitions.
‘Positive vibes’: firms are beginning to eye acquisition deals, according to PwC’s UK boss
‘I think it’s turning now,’ Ellis told the Mail at the World Economic Forum in Davos, Switzerland.
‘Our indicators on the deals market have turned green,’ he added, noting they had been ‘very solidly red’ for the past year. Recent figures showed M&A activity involving UK businesses fell by 33 per cent last year to £208billion – the lowest level since 2009 and bigger than the 17 per cent downturn seen globally.
But not all takeover deals will necessarily be welcome – especially if they involve more British companies being snapped up on the cheap by foreign buyers.
Ellis said the upturn was across all sectors though ‘probably isn’t the supersize deals yet’.
He added: ‘When there’s a wall of money, when you haven’t had deals activity for a very long time, the money still has to find a home.
‘People will sit on their hands because they can’t see value. Immediately they can see value they’re back in quickly – it’s the fear of missing out factor.’