Americans buying up UK businesses for sale

Acquisitions of British companies by US businesses is skyrocketing of late, mainly due to the weak pound.

With confidence on the rise, American companies are looking to spend and where better to do so than in Britain, where the pound has fallen against the dollar by 25 per cent in the last two years.

Many American companies have been hoarding cash during the recession and corporate giants are leading the way in the mergers and acquisitions surge.

Life is sweet for Kraft Foods, who has taken over Cadbury's, alongside American Sugar Refining who has snapped up the refinery operations of Tate & Lyle for a reported £211 million.

We have of course been here before - three years ago, British companies were being bought up left, right and centre thanks to its free market and cheap debt. Airports owner BAA and mobile phone giant O2 were both snapped up by overseas buyers.

Now, history is repeating itself - according to recent figures released by Experian Corpfin, the corporate finance information firm, 10.6 per cent of all UK businesses sold in the first six months of this year were bought by American firms, up from 6.4 per cent last year.

“You are going to see more US companies coming for UK assets because the currency is so undervalued,” said one fund manager.

Companies on the American shopping list include Astra Zeneca, the pharmaceuticals group, BAE Systems, the defence contractor, and construction firm Balfour Beatty, who are all attractive propositions due to their industry sectors and appealing share options.

The fund manager added, “The hope is that you get some decent competition to keep the players honest.

“Absent of that, there may well be some things that go for less than a full price,” he added.

It's not just the corporate giants that are being sought after – the favourable exchange rate means that the Americans may well be coming for small businesses too.

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