British firms feel pinch overseas

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The Independent Online
THE NUMBER of deals being done by British firms overseas has fallen sharply as choppy financial markets around the globe have prompted a steep decline in takeover activity worldwide. The value of cross-border deals struck by British businesses in the third quarter was down to $16.6bn from $19.69bn in the previous quarter despite the strength of sterling, according to a survey by KPMG, the consultancy group.

American firms, by contrast, have stepped up takeover activity abroad, particularly in Germany which has now overtaken Britain as the most favoured destination for US corporate purchases aboard. Globally the value of cross- border deals is down from $160.45bn to $137.82.

Stephen Barrett, the head of UK mergers and acquisitions at KPMG Corporate Finance, said: "British companies have been drawing in their horns. Their appetite for doing deals has been spoiled by the turmoil in financial markets."