By Daniel Hunter
The North West, South West and Yorkshire experienced the most inward investment deals by foreign companies (outside of London), according to new figures from Experian.
In the first nine months of the year with Preston, Leeds and Bristol were the most popular towns within their respective regions.
Mergers and acquisition deal analysis involving foreign investors has revealed in the first three quarters of this year, although London and the South East lead with 193 deals, foreign-led deals in the North West, South West and Yorkshire rose the fastest and in some cases outperformed the full year’s performance from 2012.
Overall overseas investment in the first three quarters of 2013 is slightly down on the same period last year (407 deals compared to 451), but experienced a significant uplift in Q3 with 157 deals compared to 107 in Q2 of this year. To date, the most interest has come from the USA, followed by France and Germany.
US companies were involved in 152 of the 407 deals this year, followed by France with 28 deals and Germany closely behind with 27 deals. Manufacturing was by far the biggest sector for inward investment, with over 141 manufacturing deals taking place in the UK involving overseas firms.
In the first nine months of this year, there was a significant increase in the number of foreign-led deals targeting North West firms with 38 deals totalling over £983 million. This is a 15 per cent increase in volume compared to the same period last year and a huge 176 per cent rise in terms of deal value. In fact, the North West has seen the best year to date (YTD) performance for five years, having followed a steady upward trend from its lowest point in Q2 of 2009.
The USA has been the biggest investor in the North West so far this year with 18 deals. In terms of sector, manufacturing deals had the highest volume (14 deals) with professional and business activities boasting the highest value sector with nine deals worth £418 million.
At a town level, inward investment targeted Preston (five deals, worth £393 million in total), Warrington (five) and Manchester (four).
Outside of London, the South West saw the most deals in the first three quarters with 31 deals so far this year, compared to 20 in the same period last year — a 55 per cent increase. It hasn’t fared quite so well in terms of deal value which fell from £350 million to £297 million.
After the USA, Denmark and Germany were the biggest investors in the South West with three deals apiece. The region’s top sectors for inward investment are similar to those in the North West with manufacturing (18 deals), wholesale, retail and repair (nine deals), followed by computer activities (four deals).
Bristol and Gloucester were the most active cities with seven and five deals respectively.
Firms in Yorkshire saw a three-fold increase in the number of deals from January to September 2013, from 10 in 2012 to 30 deals so far this year. This was also mirrored by a large increase in the value of deals, up from £27 million to £425 million.
After the USA (11), countries of origin for Yorkshire deals included Germany (four) and France (three). As before, manufacturing (11), wholesale, retail and repair (seven) and professional and business activities (six) were the investment industries of choice.
Businesses in Leeds were the most common target for foreign investment with nine deals worth £196 million, followed by Sheffield (five deals worth £8 million) and Huddersfield (five transactions worth £225 million).
Max Firth, UK Managing Director for Experian’s Business Information Services division, said: “The fact that British firms are increasingly attracting investment from foreign investors reveals the quality of businesses in this country. It’s also encouraging to see the manufacturing sector being a focus for so much of this attention after a tough few years.
“For firms seeking international investment, keeping abreast of the overseas deals market within the region would be useful. Overseas investors may also take a credit report into consideration when selecting a UK company to trade with so maintaining a healthy report could strengthen a firm’s position within an international network.”