UK remains top target for US M&A deals

The UK remains one of the world’s most active and trusted jurisdictions for mergers and acquisitions (M&A).

Among international investors, the US continues to play a significant role, accounting for a large proportion of inbound transactions. The two nations share deep commercial ties and a common law heritage that underpin a relationship of familiarity and confidence in cross-border investment.

For American investors, the UK offers a combination of legal certainty, access to global markets and a stable environment for corporate transactions.

US investment and market influence

The US remains the largest single source of foreign direct investment in the UK. Strong capital availability within US private equity markets, together with the relative strength of the dollar, has helped fuel a steady flow of acquisitions across a wide range of sectors.

Private equity continues to be a defining feature of this investment landscape. US-based funds are drawn to the UK’s flexible corporate structure, reliable contract law and well-regarded professional services ecosystem.

The alignment between US and UK business practices and governance standards further supports transactional efficiency. Cultural and legal compatibility also play an important role. Both jurisdictions share a similar understanding of directors’ duties, fiduciary obligations and corporate governance principles. This legal consistency allows for greater predictability and reduces uncertainty in complex, high-value transactions involving multinational investors.

Tariffs and trade policy

Tariffs and trade policy have become increasingly influential in shaping M&A strategy. Shifts in global trade dynamics can alter supply chains and affect the relative competitiveness of industries, prompting companies to pursue acquisitions as a means of mitigating exposure to import costs or trade barriers.

For US investors, acquiring or expanding operations within the UK can provide a strategic advantage by securing a local production base and reducing reliance on imported goods subject to tariffs.

In sectors such as manufacturing, automotive and energy, the potential for tariff-related disruption has encouraged greater localisation of operations through cross-border mergers. Similarly, uncertainty in international trade relations often accelerates investment decisions, as corporations seek to stabilise supply lines and ensure market access through ownership rather than contractual dependence.

These factors illustrate how trade policy now plays a significant role alongside financial and legal considerations in determining M&A activity.

Regulatory oversight and deal control

M&A activity in the UK is supported by a regulatory regime designed to ensure fairness, transparency and market integrity. Central to this framework is the City Code on Takeovers and Mergers, administered by the Takeover Panel.

The Code governs public company takeovers and sets out principles requiring that all shareholders are treated equally, that sufficient information is provided to enable informed decisions, and that bids proceed in an orderly and transparent manner.

The UK’s system is distinct from the more litigation-driven environment of the US. Rather than relying heavily on courts to resolve disputes, the Takeover Panel operates as a proactive and authoritative regulator. Its decisions carry substantial weight, providing swift and pragmatic oversight that promotes confidence in the market and reduces the scope for disruption during live transactions.

The Competition and Markets Authority (CMA) also plays a key role in safeguarding competition. It has powers to investigate mergers that may result in a substantial lessening of competition and has increasingly taken a robust approach to reviewing high-value or cross-border transactions. This reflects a global trend toward more interventionist merger control, echoing developments within US antitrust enforcement.

Transaction structures and market outlook

US-to-UK acquisitions typically take one of three principal forms: share purchases, asset purchases or schemes of arrangement.

Share purchases offer a straightforward means of acquiring control of a target company and are most common where continuity of operations and contracts is important.

Asset purchases allow buyers to select specific assets and liabilities, which can be advantageous in managing risk exposure.

Schemes of arrangement, approved by the courts under the Companies Act 2006, provide a structured and legally certain mechanism for effecting mergers, particularly in larger or more complex transactions.

Access to finance

Since 2008, the UK’s debt finance market has evolved significantly. Prior to the financial crisis, the UK’s major clearing banks dominated the domestic market landscape in terms of providing businesses and sponsors with access to leveraged finance and corporate lending.

Since then, private credit and other non-bank financial institutions have been gaining market share. They typically provide greater structural flexibility, whether through covenant headroom, increased leverage, non-amortising bullet structures, greater speed of execution or funding throughout the capital structure.

With a great deal of liquidity available in the market, it has never been a better time to access debt finance in the UK and Europe.

Conclusion

Looking ahead, the UK’s M&A market continues to demonstrate resilience and international appeal. Strong US investor confidence, supported by legal predictability, regulatory sophistication, access to finance through a mature and liquid credit market and an extensive advisory network, ensures that the UK remains one of the leading destinations for cross-border mergers and acquisitions.

Although the regulatory environment has become more rigorous, particularly in competition and national security matters, it remains transparent and efficient. This balance of openness and oversight is central to the UK’s continuing success as a preferred market for American investors seeking strategic acquisitions and global expansion opportunities.