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UK landed record foreign investment in year of Brexit

LONDON — Net flows of foreign direct investment (FDI)into the United Kingdom hit a record high in 2016, the year of the Brexit vote, boosted by major takeovers, Britain’s official statistics office said on Friday.

Reuters

Net FDI flows jumped to 145,6 billion pounds in 2016, up from 25,3 billion pounds in 2015 and the largest value recorded for a year since comparable data began to be compiled in 2006.

Anti-Brexit campaigners had warned before the June 2016 referendum that a vote to leave the European Union would make Britain a less attractive place to foreign investors. Prime minister Theresa May has welcomed big takeovers since the vote as a sign of confidence in Britain.

The Office for National Statistics (ONS) said the three main components of net FDI flows increased in 2016, although equity capital — typically used for takeover deals — increased the most by far, jumping to 133,8 billion pounds from 26,1 billion pounds in 2015.

“The large value of inward FDI flows recorded were dominated by a handful of high-value M&A deals in 2016,” the Office for National Statistics said. “Large publicly reported transactions in 2016 included the acquisitions of SABMiller, ARM Holdings and BG Group.”

Belgium-based brewer AB InBev’s 79 billion-pound takeover of SABMiller, which was completed in October 2016, was one of the largest mergers in corporate history.

Japan’s Softbank struck a deal to buy ARM in July 2016 for 24 billion pounds. Shell sealed a 36 billion-pound purchase of BG in February 2016.

Separate ONS figures from its balance of payments data have suggested 2017 is unlikely to be such a bumper year. Inflows of net direct investment to Britain in the first two quarters of 2017 slowed to about 20 billion pounds, down from 82 billion pounds in the same period of 2016.

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