The frenzy of UK tech takeovers shows no signs of slowing down after three separate billion-pound M&A moves were made within hours of each other as US tech giants continued their hunt for British bargains.
First to announce a move was London-listed semiconductor firm Alphawave, which confirmed it had reached an agreement with American chipmaker Qualcomm in a cash and shares deal that valued the company at $2.4 billion (£1.8 billion).
That was followed, a few hours later, by Quantum computing business Oxford Ionics, which signed a $1.1 billion deal to be taken over by New-York listed rival IonQ. And then on the same day, precision and testing equipment specialist Spectris saw its share rocket after the firm unveiled it had received a £3.7 billion takeover offer from US private equity company Advent. Spectris said it was minded to accept the proposal.
The moves, which represented a combined £6.3 billion in M&A transactions as all went ahead, lay bare the continued undervaluation of UK tech businesses by British investors as deeper-pocketed US rivals swoop in for cheap deals.
All three tech firms received takeover proposals with an offer price well above their domestic valuations. Alphawave’s offer of 183p per share represented a near-doubling of where the stock had been trading prior to the deals emergence back in April, while the Spectris proposal represented a premium of more than 60 per cent.
The billion-dollar offer for Oxford Ionics, a private company, dwarfs the valuation it fetched at its £30 million raise in 2023, which was unlikely to have exceeded £200 million.
The deals come just days after food app Deliveroo was acquired by US rival Doordash and fintech firm Wise moved its primary listing from London to New York, highlighting the difficulty of keeping British startups in the UK.
Wise announced its desire to pursue a New York listing, telling investors the move would “significantly enhance its profile” in a market that it has made no secret of wanting to majorly expand into.
The trio of takeovers are likely to come as a blow to Prime Minister Keir Starmer, who sought to tout the success of the sector during a visit to London Tech Week , in which he spoke alongside billionaire Nvidia chief Jensen Huang.
“The day has delivered a double blow for London markets”, said Danni Hewson, head of financial analysis at AJ Bell. Whether or not the writing was on the wall from the start after Alphawave’s discouraging IPO, this is exactly the kind of tech company that the UK struggles to support and exactly the kind of company the UK needs to thrive”. He added: “Considering its US suitor has agreed to pay handsomely for the company, it’s clearly a business that has value to Qualcomm and its plans to expand data centres. Many UK companies still look cheap and that’s likely to keep the takeover offers coming”. There have been supportive words from Jenson Huang, who described the UK’s AI ecosystem as “nearly perfect for take-off” — if only it had the data centres, something Starmer has vowed to deliver.
Nvidia also announced plans to “lean in” to the UK’s AI sector with a new industry forum to support experimentation and expansion. Founding members include BAE Systems, BT, Babcock, National Grid and Standard Chartered. This is welcome development, but it’s quite separate from the wider issue of fast-growth tech firms abandoning the UK in favour of great opportunities abroad.
There is no shortage of incredible startups and fast-growing tech businesses in the UK — across sectors including finance, AI, life sciences and manufacturing — but something has gone seriously wrong if the UK isn’t viewed as a logical or attractive market in which to grow from startup to scale-up and from scale-up to industry leader.
Oman Observer is now on the WhatsApp channel. Click here
