Key takeaways: This year, overseas buyers are driving a sharp rise in the number of takeover deals for UK-listed companies. By the third quarter, the total value of public M&A transactions in the UK surpassed £75 billion, already exceeding the full-year total of last year. Overseas buyers accounted for 94% of the total deal value, and the number of hostile takeover approaches faced by UK corporate boards quadrupled year on year. UK-listed companies have long traded at low valuations, fueling a wave of public takeovers, with many UK equities becoming targets for overseas acquirers.

According to the latest analysis by law firm White & Case, as the fastest-growing economy among the G7, the UK saw public M&A deal value reach £75 billion (equivalent to $99 billion) by the end of the third quarter. That figure is nearly double the £38.2 billion for all of 2025. This wave of M&A activity is being driven by overseas capital, and the number of hostile takeover approaches this year has risen to four times the level of previous years.

Patrick Sarch, head of UK public M&A at White & Case, said there is a long-standing valuation gap between UK-listed companies and their global peers, which has attracted international investors. The law firm disclosed on Thursday that deals involving international investors accounted for 72% of total deal count and as much as 94% of total deal value. Over the past five years, the UK blue-chip FTSE 100 index has fallen by about 50% cumulatively. There were four hostile takeover approaches this year, two of which occurred in the third quarter. By contrast, there was only one in 2025 and none in 2024.

White & Case also counted 14 so-called "bear hug" approaches 鈥?where a potential acquirer makes a sharply premium offer, using a public bid to pressure the company's board. The law firm said international capital is behind the large deals, including both listed investment institutions and private equity buyers; of the eight deals worth more than £1 billion in the third quarter, seven involved overseas capital.Major large-cap M&A deals this year include: condiment giant McCormick's $45 billion acquisition of Unilever's food business; and U.S. asset management giant Nuveen's £9.9 billion acquisition of Schroders, the UK's largest independent asset manager.

Bear Hugs and Boardroom Battles

Sonica Tolani, a partner in White & Case's global M&A and corporate practice, said: "With hostile takeover approaches increasing, the use of bear hugs is becoming more common. Overseas acquirers are increasingly willing to make their terms public, encouraging shareholders to pressure boards and pushing boards to negotiate.""This shows that overseas acquirers are becoming more familiar with the UK regulatory environment. They no longer treat public pressure as a last resort, but as a compliant and viable negotiating tool."Sarch noted that the persistent discount in UK corporate valuations means investors will "continue to target high-quality UK-listed companies with global revenue, strong cash flow and experienced management teams."Oliver Ives, managing director of UK M&A at Deutsche Bank, believes the valuation gap between UK-listed companies and their US-listed peers mainly stems from differences in the two market environments, not from problems with the companies' underlying fundamentals.

A recent Deutsche Bank survey points to strong momentum ahead for the UK M&A market: 87% of respondents expect UK M&A activity to continue increasing over the next 12 months; 71% said acquirers are more optimistic about UK companies than they were last year. Ives wrote in a Monday research note: "Even after accounting for takeover premiums, international acquirers still see plenty of opportunity to buy high-quality UK companies with globally oriented businesses at highly attractive valuations."