Manufacturing mergers and acquisitions at 10-year high

Mergers and acquisitions (M&A) activity in 2022 involving North West manufacturers was at its highest level for a decade according to new research, with overseas bidders having a big impact.

Analysing M&A activity over the course of last year, law firm Irwin Mitchell found that the number of deals across the UK reached its highest level since 2016, with a total of 1,344 manufacturers involved in mergers or acquisitions.

In the North West specifically, 163 manufacturers were the target of M&A activity, more than at any point in the last decade.

Two thirds (67 per cent) of deals in the region were acquisitions, compared to 57 per cent across the country UK as a whole. The North West also differs from the rest of the UK when it comes to venture capital (VC), with just 12 per cent of manufacturing deals in the region backed by VC in 2022 – three times less than London and more than two times less than Yorkshire.

Overall, nearly a third (29 per cent) of deals in the North West involved an international bidder, with the US the most common source of overseas interest.

Speaking to Insider Media, Adam Kaucher, Corporate Partner at Irwin Mitchell, commented:

“Although 2022 was a challenging year for the economy, there was a notable change in the type of transaction with restructuring type deals reducing significantly and acquisitions becoming more prevalent.

“It's also clear that UK manufacturers are highly attractive to overseas buyers. We have seen strong interest from both overseas investment groups acquiring to hold, and global manufacturers seeking vertical integration and consolidation of market share. We've seen deal flow in the sector continue to be strong and I am hopeful that 2023 will be strong, if not stronger than 2022.”

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