Record High in Foreign Ownership of British Businesses
Foreign ownership of British businesses has reached an all-time high, marking a significant shift in the UK's corporate landscape. This surge is largely attributed to international acquisitions that have taken place since the pandemic, reshaping the way businesses operate in the country.
Growth in Foreign Ownership
The data shows that foreign ownership of British businesses increased by 35% from 2020 to 2024. Despite the total number of businesses in the UK remaining relatively stable over the same period, the number of businesses under foreign control rose to just over 200,000 in 2024, compared to 148,742 in 2020.
This growth is driven by a combination of factors, including lower company valuations, a weaker pound during parts of the post-Brexit period, and renewed merger-and-acquisition activity. These elements have made British businesses increasingly attractive to overseas buyers across various sectors such as manufacturing, financial services, technology, and logistics.
South African Firms Lead the Charge
While North American, European, and Asian investors dominate this trend, South African firms have emerged as Africa's leading corporate presence in the UK. Companies like Bidvest, Investec, and Old Mutual exemplify how South African multinationals have expanded their operations through strategic acquisitions and long-term investments.
Strategic Expansion and Acquisitions
Bidvest Group stands out as a prime example of this approach. Rather than focusing on a single large acquisition, the industrial conglomerate has steadily built a significant UK business through a series of acquisitions across different sectors, including foodservice, commercial products, facilities management, and industrial services. The UK has since become one of the group’s largest international markets outside of South Africa.
Investec, a financial services group founded in Johannesburg, followed a similar strategy. The bank expanded its UK investment banking presence through the acquisition of Evolution Group in 2011, transforming London into one of its two principal operating markets alongside South Africa. Today, the UK accounts for a substantial portion of Investec's banking, wealth management, and advisory business.
Old Mutual, another South African financial institution, established a significant UK presence over several decades. It used London as a base for international operations before restructuring parts of its business. This move reflected a broader strategy among South African financial institutions to diversify beyond domestic markets and gain access to global capital.
The Appeal of the UK Market
Britain remains an attractive destination for international investors, particularly after the pandemic. Lower company valuations, a weaker pound, and increased M&A activity have made British businesses more appealing to overseas buyers. Additionally, the UK offers access to global capital markets, institutional investors, and multinational clients, which is especially beneficial for companies like Investec and Bidvest.
For these firms, a strong UK presence helps diversify earnings and reduce dependence on domestic economic conditions. This strategic advantage allows them to operate more effectively in a competitive global market.
Africa's Role in the UK's Corporate Landscape
Despite the successes of South African firms, African companies remain relatively modest participants in Britain's broader foreign ownership boom. The majority of foreign-controlled UK businesses are still owned by companies based in the United States, Canada, Europe, and increasingly Asia. These regions continue to dominate cross-border acquisitions due to their larger capital markets and multinational corporations.
However, South African firms have demonstrated that African businesses can successfully compete in advanced economies through disciplined expansion strategies, strategic acquisitions, and long-term investment. As the UK continues to attract overseas buyers, Africa's corporate footprint may be smaller than those of other regions, but it is steadily growing.
Key Players in the South African Business Expansion
Several South African multinationals have spent decades establishing themselves in one of the world's most competitive business markets. Their success highlights the potential for African companies to thrive in developed economies through careful planning and execution.
Challenges and Opportunities
While the UK offers numerous advantages for foreign investors, there are also challenges. These include navigating complex regulatory environments, managing currency fluctuations, and adapting to local market conditions. However, for well-prepared companies, these challenges are outweighed by the opportunities presented by the UK's strong financial infrastructure and global connectivity.
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