This is turning into a year like no other in the City of London.
The financial district is consumed with a deal-making frenzy. Bankers, lawyers and corporate PR advisers are working flat out — and, of course, raking in hefty fees — as a tidal wave of foreign takeovers has engulfed the UK market.
There has been no end to the whirlwind activity across all manner of sectors.
One day it is budget airline easyJet being bought by US-based investment firm Apollo Global Management, after seeing off a bid from US investment firm Castlelake. Another day, it's a household name, sugar maker Tate & Lyle, under offer from American player, Ingredion. Or it’s industrial unit-owner Segro, accepting a £14bn strike from US rival Prologis.
Even the City itself is not immune, with one of its grandest, most hallowed names, the mighty Schroders, agreeing to a £9.9 billion approach from the nowhere near-as-well-known Nuveen of the US.
Financial services and asset management, industrials, engineering and aerospace, defence, tech and AI – no sector is immune.
There is a pattern to the gold rush, which is of Americans charging across the Atlantic and shopping for Brits. The traffic has been nearly entirely one-way, with a searing exception: AstraZeneca entering talks with US-based Bristol Myers Squibb to form a $400 billion pharmaceutical behemoth. Although in that case the UK company is the bigger player, the muscular attraction of the US is still driving the marriage.
So far in 2026, inbound merger and acquisition activity into the UK has surpassed an incredible $231 billion. Foreign swoops have accounted for 86 per cent of all the mergers announced in the UK this year. Yet it is only August; there are many more such raids to come.
To put this in context, this year’s buying spree from overseas is already three times the tally for the whole of 2025.
Sweethearts
In short, UK PLC is for sale. A growing number of the bids are known as "bear-hug" offers, where the buyer quotes a price that is too good to refuse. Typically, it’s 20 per cent above the last closing price of the shares. Faced with that sort of premium, that scale of inducement, the shareholders are understandably minded to accept.
The chances of raising the share price by 20 per cent without the external influence of a takeover are slim. Here is 20 per cent in the hand now.
Analysis shows that while businesses in other countries are also under attack, the UK has experienced more such unsolicited "sweetheart" overtures than any other country. Most are successful; the UK, it seems, is happy to take the money. This is an era of least resistance.
It has not always been the case. The foreign raider is not a new phenomenon in the UK. Indeed, the nation’s media and politicians have vented repeatedly over the last few decades against "selling off the family silver".
This 2026 surge, though, feels — and is — different. "We used to put out unrecommended bear hug announcements 10 to 15 years ago and it was seen as a tactical disaster, and all the shareholders would rally around the board," said Philip Noblet, Jefferies’ co-head of UK and Ireland investment banking, in the FT.
Not today. The shareholders are not too bothered about hearing what the directors have to say; they are willing to surrender. They may hold out for a higher premium, above 20 per cent, but at present, from the moment the other side comes knocking, the outcome appears preordained.
The suitors are saying to the shareholders and bypassing the board: "Here is our offer, what do you think? Not them, what do you think?" The directors are instantly forced onto the back foot, knowing that the writing is on the wall and resistance will probably prove futile.
The bidder is encouraging, inviting, the investors to do their lobbying work on its behalf to persuade the board to accept its price. If the board has any sense, it will open talks with the other side immediately as to how the two can combine and work together – further cementing the friendly nature and certainty of the deal.
In the past, the usual tactic was to try to win the board round first; these days, would-be buyers tend to be confident the shareholders will approve and the board will fall into line and do as they say.
It doesn’t always pan out that way. The board of DCC, the Irish energy group quoted in London, has recommended an offer of £5.75 billion from KKR and Bridgepoint-funded Energy Capital Partners. It was a higher price than the original, opening gambit. A good-sized portion of DCC shareholders, however, voiced their disapproval, but the directors nevertheless remained minded to accept. Not that the deal is guaranteed to complete – all the shareholders will have the last word, with a vote on the sale next month.
Stalker
In another instance, the board agreed, only for a counter-bidder to jump in and rain on the parade. That was at easyJet, where Castlelake stalked the carrier and eventually thought it had its interest rewarded and victory was in sight, only for rival Apollo to gazump them at the last minute by making a higher counter-bid.
The invaders are picking their targets carefully. They’ve done their homework. It is not a general smash-and-grab. They are alighting on companies that have frequently struggled to achieve sustained, impressive growth and to produce the sort of returns that shareholders crave. Covid and a slow recovery from the pandemic, Brexit and the exit from the neighbouring enormous free-trade bloc, a revolving prime ministerial door and constant chopping and changing of government policy, two wars and ongoing global instability, tariff shocks and added uncertainty, a rising cost of living and sluggish consumer spending - these have all combined to sap UK shareholder confidence.
Not all these factors are unique to the UK – other businesses around the world have also been bought, including in America itself. But what sets the UK apart is an institutional shareholder base, mainly pension funds, which are innately cautious and conservative and prefer to downplay the value of the stocks they own. Investors from other nations can see their underlying worth and future prospects.
It’s a fair assumption that two similarly sized corporations operating in the same line of business, one listed on the NYSE, the other on the LSE, will almost certainly have vastly different capitalisations and ratings. The US company may find it relatively easy to access the finance it requires; in more risk-averse and not so rich and less liquid London, the UK opposite number might not.
Under UK law, foreigners are officially reviewed or referred if they seek to acquire 25 per cent of the shares or voting rights in a company in a sensitive area or aim to purchase "material influence".
Safeguards
Others are adopting a less open-door, more protectionist stance. In France, Prime Minister Sebastien Lecornu this week issued a decree lowering the country's investment-screening threshold from the same 25 per cent to 10 per cent. The scope was also widened to apply to French businesses listed outside the EU.
The move enables the Paris economy ministry to examine transactions that could affect public order, public security or national defence. The sectors covered include defence, cyber security, AI, semiconductors, quantum technology, robotics, space operations, and goods with both civilian and military applications, essential infrastructure and services in energy, water, transport, telecommunications and healthcare, food security, political and general-interest news media, critical raw materials, low-carbon technologies, energy storage and biotech.
That’s pretty much everything basically, underlining French resolve to safeguard their future economic and technological independence. In the past, France has not been afraid of insisting that the overseas purchaser commit to keeping employment, production, research and strategic facilities within France. Mr Lecornu is going further still.
The new UK government of Prime Minister Andy Burnham has yet to pronounce on foreign takeovers. He is in a tricky bind because he wishes to attract investment, to drive the economy, to pay for the reforms he wishes to make.
The transformation of Manchester, where he was mayor until recently, was founded on attracting outside money and wooing enterprises to believe in his domain. He’s trying to repeat the trick, but on the larger, arguably tougher and wider stage.
Previous regimes were accused of selling the family silver, but they were also keen to show that the UK was ‘open for business’.
Mr Burnham may be new; he is undoubtedly different from his predecessor, but that key message has not changed. While UK institutions continue to believe in and cherish the companies they own and have faith in their managements, the foreign buying will continue.
The 20 per cent uplift has gone from being a one-off to being expected. The UK is unlikely to escape the bear hug anytime soon.
