There were 48 acquisitions in the UK by foreign companies during the second quarter of the year (unchanged from Q1 2006), worth £18bn. The value of foreign acquisitions in the UK during the first half of 2006 (£42bn) is almost as much as the amount invested during the whole of 2005 (£50bn).

In contrast, UK companies were more cautious with regards to buying assets abroad. The value of acquisitions abroad by UK companies was just under £3bn in Q2 2006 (compared with £7.4bn in Q1 2006), while the number of such deals dropped by 22% between Q1 and Q2 2006 (from 90 to 70).

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David Brooks, head of M&A at Grant Thornton Corporate Finance, said: “While foreign companies are currently making more aggressive moves on UK businesses than vice versa, British companies are still very active abroad but are adopting a more cautious approach, typically buying more modest assets, at least in value terms.

“There is certainly a trend for more UK companies scouring developing economies, with high-risk/high-return investment potential.”