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Although UK M&A activity has slowed in the first three months of 2008 compared to the same period last year, international deals have been less affected by the economic downturn.

Research from accountant Grant Thornton reveals that while the £20.4 billion worth of announced offshore acquisitions was a significant drop on the first three months of 2007 (£37.2 billion), it marked a slight rise on 2007’s last quarter figures (£19.7 billion).

In total 309 businesses in 59 countries were targeted by UK companies in the first quarter of 2008. Although the US commands the greatest pull for UK firms on the international acquisition trail, less-trodden routes to investment are being explored, with Brazil (2nd), Turkey (6th), Kazakhstan (8th) and Russia (10th) all featuring in the top ten offshore acquisition destinations.

Mining and extraction companies featured highly on the list of the quarter's largest announced deals, including the largest offshore deal by a UK firm - Anglo American's acquisition of all the outstanding stock of a company holding assets of MMX Mineracao e Metalicos, a Brazilian mineral mining company. Companies extracting fossil fuels made up a significant proportion of offshore deals, including targets in Kazakhstan, the Philippines and Australia.

David Brooks, head of Corporate Finance at Grant Thornton cites economic growth rates, and the race to secure increasingly expensive natural resources behind the push to internationalise. He commented: “This process of acquiring these offshore assets is fundamentally positive for the UK economy and should be more actively encouraged by central government and business support agencies.”

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