Mega-mergers back in fashion

Mega takeover deals were back in vogue in the City this year, with bosses becoming more confident as the economic recovery gathered pace.

Spanish bank Banco de Sabadell bought UK lender TSB in one of the largest cross-border banking deals since the financial crisis. Picture: TSPL

Mergers and acquisition (M&A) activity involving UK businesses leapt almost 63 per cent to $565 billion (£381bn), a 15-year high involving 3,385 deals, according to data firm Dealogic.

The biggest of these acquisitions saw London-listed Peroni and Grolsch group SABMiller swallowed by Budweiser brewer Anheuser-Busch InBev for £71bn in a deal just recently finalised. The takeover by the Belgium-based group was the largest ever for a British company and the fourth-biggest takeover in history.

The next biggest deal came with oil major Royal Dutch Shell’s £47bn agreed takeover bid for gas explorer BG Group announced in April.

The swoop by the Anglo-Dutch firm came as the industry looks to become more efficient and trim costs in the face of plunging crude prices.

Another notable deal was Spanish bank Banco de Sabadell buying UK lender TSB for £1.7bn, in one of the largest cross-border banking deals since the financial crisis.

There was also a flurry of deals in the gambling sector, driven by a combination of new taxes on online betting around the world and the need to invest in marketing and technology.

In June, Gala Coral and Ladbrokes proposed a £2.3bn tie-up, which if passed by regulators will create Britain’s biggest bookmaker, overtaking rival William Hill with some 4,000 betting shops.

Meanwhile, Paddy Power and online rival Betfair agreed to merge in August, creating one of the world’s largest online gambling operations valued at £5bn.