Value of UK takeovers in 2026 already double that of 2025: who’s next?

The value of UK mergers and acquisitions continue to gather pace, with the cumulative value of announced deals touching £70 billion, more than double the total across the whole of 2025, according to AJ Bell data.

Deals have been struck at an average premium of around 44% to the undisturbed price, up from 40% in the prior year, showing buyers are becoming more aggressive to secure shareholder approval.

Private equity groups have been a key driver of UK M&A activity, reflecting high levels of financial firepower and the need to put cash to work to justify active management fees.

Trade buyers stepping up

However, so far this year trade buyers have more prevalent, representing more than half of the announced takeovers. This may party explain the rising bid premiums paid as trade buyers can more easily justify a takeover on strategic grounds and pay a higher price.

Trade buyers have advantages such as the ability to eliminate duplication, consolidate supply chains, as well as initiate cross-selling opportunities, which mean buyers can pitch the target’s products to their existing client base.

A good example is Swiss engineering giant ABB’s recent all-cash acquisition of flow control and instrumentation business Rotork for £4.13 billion. A 73% premium to the undisturbed share price.

Rotork’s business was seen as highly complementary to ABB’s automation portfolio, allowing the Swiss company to leverage Rotork’s trusted customer relationships, and support participation in larger projects across new geographies.

FTSE 100 deals on the rise

Interestingly, there have been five acquisitions of FTSE 100 companies this year compared with none in 2025, barring the quickly abandoned Anglo-American bid for BHP.

This is a contrast to recent years where M&A activity has centred around mid and small cap companies.

One of the largest announced takeovers in the FTSE is private equity firm EQT’s £9.4 billion offer for testing and quality assurance group Intertek, pitched at a 40% premium.

Could AstraZeneca be making its move across the Atlantic?

The FTSE’s second largest company by market value revealed it held merger talks with US firm Bristol Myer Squibb, which sent its shares down by as much as 8% to a 10-month low, on 3 August.

Shareholders recoiled at the prospect of a transformative deal when AstraZeneca’s growth profile was already the envy of the drug industry. Analysts at Jeffries said they were ‘perplexed’ by the talks arguing that AstraZeneca doesn’t need a deal to boost earnings.

The Anglo-Swedish firm has made no bones of its intention to target the US to achieve its growth ambitions, while mitigating potential tariff hurdles. Astra launched a full US listing in February and has committed $50 billion to new US manufacturing and research facilities.

Increasing activity involving FTSE 100 companies speaks to the perceived undervalued nature of UK-listed companies relative to global peers. Although the volume of deals is reducing the breadth and depth of the market as a whole.

The value of the pound has fallen against the dollar and euro in recent years, which increases the bidding power overseas buyers.

Which companies might be next?

Identifying companies which might be vulnerable to a takeover is not easy and certainly should not lead to an investment decision on its own. That said, there are certain financial metrics which can be used to screen for targets, seen through the lens of a private equity buyer.

We have crunched the data to focus on firms which have modest debt, trading at less than 10 times enterprise value (market value plus net debt) to EBITDA (earnings before interest, tax, depreciation and amortization).

Given that private equity takeovers are made with debt, we wanted to identify companies which generate healthy free cash flows to service higher debts.

Institutional shareholders backed telecoms firm Zegona Communication’s experienced management team to buy Vodafone Spain, aggressively cut prices and re-finance debts.

Zegona has achieved these goals ahead of schedule and returned the business back to growth. Exiting to a trade buyer would not be a total surprise.

Institutional shareholders have historically put pressure on the Dr Martens board to explore strategic options following the poor performance of the shares since listing in 2021.

Although the company appears to be back on the front foot, private equity firm Permira which owns 38.5% of the shares may back a buyout from an overseas buyer with the ability to exploit the brand’s global potential.

Halfords has a history of private equity ownership and is frequently the subject of takeover speculation. Most notably, it rejected a £1.4 billion approach by van rental firm Redde Northgate, pitched at 230p per share.

A 75% recovery in the shares in 2026 pushed Halfords back the into FTSE 250 index for the first time since 2019.

Trading at a discount but potentially unavailable

EnQuest is an independent oil producer which recently diversified its production away from the UK via the acquisition of offshore Malaysian oilfields from Petronas.

While it trades at a discount based on the metrics we’ve examined, EnQuest has a long-term production agreement with Petronas which would be at risk should the company be taken over.