Britain's takeover lauded by Reeves criticized, with Brummer likening it to celebrating a self-goal
In 2022, the London Stock Exchange witnessed a flurry of takeover activity, with 46 firm takeover offers announced on the Main Market and AIM. However, a comprehensive public list of these companies and their acquirers is not readily available. This article provides an overview of some of the major UK takeover deals of 2022 and the trends they represent.
The Just Group takeover, valued at over £1billion, was one of the significant deals of the year. The company, which has accumulated £27billion in pension fund assets and serves around 500 smaller firms, is set to be acquired by Brookfield. The deal, promoted by the current Chancellor, Rachel Reeves, as evidence that Britain is good for business, will see Brookfield pledging to merge Just with its own pensions' buyout operation Blumont and keep headquarters in London.
Another notable deal involved Rolls-Royce, a company that has undergone a significant turnaround since 'Turbo' Tufan Erginbilgic took control in January 2023. Erginbilgic aims to make Rolls a bigger player in engines for jets, worth a potential $1.6trillion, but faces competition from subsidized rivals GE and RTX. Despite this, Rolls-Royce has first mover advantage in the nuclear energy sector with the emergence of Small Modular Reactors. The company's stock valuation has exceeded £90billion, a dramatic increase from near insolvency during the pandemic.
The competition for market dominance was also evident in the cloud computing sector, where the Competition & Markets Authority (CMA) found that Microsoft Azure and Amazon Web Services have a dominant position, each with stakes of 30 to 40%. The CMA wants more competitive prices, easier switching for users, and innovation in the sector.
Unilever, a prominent UK listed company, is also undergoing changes. The company is retreating from food to focus more on personal care and beauty. Its best-performing business, ice cream, is heading for a listing in Amsterdam.
De Beers, a division of Anglo American, is facing challenges. The price drop for diamonds, partly caused by the prevalence of lab-grown diamonds, is affecting the relationship between De Beers and Botswana, which owns 15pc of the equity. The company is also struggling with the disposal of De Beers.
As defence budgets expand across Europe, Rolls-Royce's nuclear propulsion for submarines and engines for fighter aircraft and weaponry will benefit. The company has become a national champion, with a significant presence in most of the world's fastest-growing industrial sectors.
It's worth noting that finding specific companies and their acquirers involved in takeovers in 2022 requires reviewing official announcements from the London Stock Exchange during 2022, the Takeover Panel’s historical takeover announcements and rulings, and financial news archives specializing in M&A activity for that year.
Despite the challenges, the UK takeover market in 2022 demonstrated resilience and dynamism, with companies adapting to changing market conditions and seizing opportunities for growth. As we move forward, it will be interesting to see how these trends continue to evolve.
Investing in the Just Group, a company with a £27billion pension fund and serving around 500 smaller firms, offers a potentially lucrative opportunity as it is set to be acquired by Brookfield, following a takeover deal promoted by the current Chancellor, Rachel Reeves.
In the real-estate sector, Unilever, a prominent UK listed company, is transitioning its focus away from food and towards personal care and beauty, with its best-performing business, ice cream, heading for a possible listing in Amsterdam.
The finance industry witnessed the competition for market dominance in the cloud computing sector, where the CMA called for more competitive prices, easier switching for users, and innovation, due to the dominant positions held by Microsoft Azure and Amazon Web Services.
