Large UK companies ‘are planning to make acquisitions’

Posted 04/05/2011

New research has suggested that larger businesses in the UK are ready to acquire other firms as they aim to expand.

A poll by Royal Bank of Scotland (RBS) discovered that more than a third of bigger companies intend to buy out smaller ones in the next year, with half planning on acquiring a firm in the same sector.

Meanwhile, one in ten businesses with a turnover of more than £25 million intends to make a purchase overseas, suggesting that the hesitant corporate approach seen after the recession is beginning to fade.

RBS spokesperson Tim Boag said: “This is encouraging as mergers and acquisitions activity helps firms expand where prospects for organic growth are limited.”

He pointed out that many business owners are likely to have been building up cash reserves wherever possible during the recession, which can now be spent on making well-priced acquisitions.

In March, KPMG predicted that companies will be taking part in more strategic mergers and acquisitions this year than they have been doing during the global economic downturn.