UK M&A is ‘on fire,’ Citi U.K. CEO says
Citi UK CEO Tiina Lee told CNBC that mergers and acquisitions in the UK remain at a fever pitch as large companies simplify their businesses and overseas buyers target cash-generating British assets.
Speaking to CNBC’s “Squawk Box Europe” in Canary Wharf on Thursday, Lee said mergers and acquisitions are “on fire,” pointing to ongoing efforts by major companies to streamline portfolios and focus on core operations.
“This is being driven by the ongoing theme around simplifying the UK plc,” Lee said, referring to a trend among large companies modernizing their business models.
He highlighted the transaction involving McCormick and Unilever’s food business, as well as the sale of Diageo’s Indian cricket team, as examples of companies focusing on core competencies.
Lee added that foreign investment into the UK is also strong, with 28 transactions announced so far this year, particularly targeting businesses with solid cash flow and an international profile. Pointing out that Rosebank acquired MW Components earlier this year, the official also added that British companies continue to invest abroad.
“All of this is focused on large capitals focusing on core competencies,” he added.
Lee said the strength in deal-making contrasted with a quieter IPO market, with mergers and acquisitions currently providing the main momentum in UK capital markets.
He said one of the main factors is the valuation difference between the UK and the USA, adding that well-established British companies with strong cash generation and durable business models continue to be extremely attractive to international buyers.
