Overseas Acquirors Drive Record UK Retail Deals in 2021

  • Overseas interest in UK retail sector M&A reached a decade high in 2021
  • Disclosed deal values returned to pre-Covid levels at £13.5bn
  • UK retail and consumer deals highest since 2017 with 65 deals
  • Private equity activity at the highest level in over a decade
  • Notable deals include Morrisons and Selfridges acquisitions

The UK retail sector has experienced a significant surge in deal activity in 2021, with overseas acquirors accounting for 43% of deals, the highest level seen in a decade. According to Grant Thornton UK’s research, this marks a ‘significant’ increase compared to pre-Covid levels in 2019 when overseas acquirors accounted for 35% of deals. In Q4 2021, investors and trade buyers acquired 19 UK-based retail companies, bringing the total volume of UK retail and consumer deals to 65 – the highest since 2017. Disclosed deal values for the sector in 2021 returned to pre-Covid levels at £13.5bn, up from £7.9bn in 2020. The early days of coronavirus saw a near halt in deal activity but it bounced back in 2021. Private equity (PE) activity also reached the highest level in over a decade. Notable deals included US private equity group Clayton, Dubilier and Rice’s £7bn takeover of Morrisons and the £4bn acquisition of Selfridges by Thai-Australian alliance Central Group and Singa Holding. Nicola Sartori, head of Retail at Grant Thornton UK, said: ‘The UK is once again seen as an attractive proposition for international investors. The uncertainty surrounding Brexit that made acquirors reluctant to invest in the UK has largely disappeared, and the nation has regained its foothold as a strategically important market.’ She added: ‘Covid-19 altered the way we shop and live, leading buyers to seek deals capitalising on post-pandemic consumer trends such as health and fitness and increased demand for home delivery.’

Factuality Level: 8
Factuality Justification: The article provides accurate information about the increase in overseas interest in UK retail sector, citing research from Grant Thornton UK to support its claims. It also mentions notable deals and trends observed in 2021, such as private equity activity and post-pandemic consumer trends. The article is well-researched and objective, with no clear signs of sensationalism or personal perspective presented as fact.
Noise Level: 3
Noise Justification: The article provides relevant information about the increase in overseas interest in UK retail sector and highlights notable deals. It also mentions the role of private equity in the sector. However, it could benefit from more analysis or context on why Brexit uncertainty has disappeared and how post-pandemic consumer trends are shaping the industry.
Financial Relevance: Yes
Financial Markets Impacted: UK retail sector
Financial Rating Justification: The article discusses the increase in deal activity in the UK retail sector, impacting companies such as Morrisons and Selfridges, and mentions disclosed deal values returning to pre-Covid levels. It also highlights private equity’s role in the sector.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no mention of an extreme event in the last 48 hours.

Reported publicly: www.retailsector.co.uk