M&A in the UK is set to break record, but PE sponsors are sidelined

UK M&A value is tracking to a record high in 2026, as corporate buyers sidelined PE investors in the year's largest deals with financing options that sponsors couldn't easily replicate.

UK M&A value reached £178.9 billion (about $240 billion) in the year to July 7, putting the market on track for an annualized total of around £347 billion, eclipsing the prior high of £309.2 billion set in 2015, according to PitchBook data.

The top 10 deals accounted for roughly 52% of the overall M&A value.

Eight of the 10 biggest M&A transactions in the UK were struck by strategic acquirers in the first six months, led by McCormick's $44.8 billion merger with Unilever's food business in March. In February, Engie acquired UK Power Networks for an equity value of £10.5 billion while Nuveen acquired Schroders for £9.9 billion.

Sponsor acquisitions made up just 33.1% of overall UK deal value in the first half of the year, the second-lowest share since 2014, when PE typically captures 40-55% of the market. That gap widens further at the top of the market, with PE accounting for only 15.1% of the value of the 10 largest deals. EQT took Intertek private for £10.9 billion in June, while TDR Capital acquired software-escrow provider Escode in January for £3.09 billion.

The gap comes down to financing. Roughly two-thirds of McCormick's Unilever Foods combination was funded in stock, a currency that PE funds cannot offer.

PE firms are increasingly boxed out of the largest deal sizes as debt costs bite into buyout economics. At the same time, corporate acquirers can rely on balance-sheet cash and equity, gaining room to pursue scale that would once have drawn sponsor competition.

While dealmakers are increasingly turning to tools such as earn-outs, rollovers, and structured equity to bridge valuation gaps, none of those tools gives a sponsor its own tradeable stock to offer directly to the seller's shareholders.

Get our daily digest of private capital markets in the EMEA region.

This article originally appeared on PitchBook News