Legal Review: billion-plus price tags energise mergers and acquisitions

Gareth Edwards reports on a strong year for mergers and acquisitions in Scotland, which saw overall volume fall but value soar thanks to ‘mega-deals’ completed across the financial services and energy sectors.

Scotland has been the land of the ‘mega-deal’ over the last year, with mergers and acquisitions worth over £1 billion pushing up value even as the number of deals dropped sharply.

In its latest report into Scottish mergers and acquisitions, Experian MarketIQ noted that across the first half of 2026 there were 236 deals announced, a drop of 22% on the 303 recorded in H1 2025.

The disclosed value of those deals however was almost double that of the previous year, at £8.2bn - an increase of 93% on the £4.2bn recorded in H1 2025.

And the total value will be significantly higher, with the figures based on disclosed value only - and in all, 175 of the 236 H1 2026 deals had no disclosed value.

The average disclosed value deal was £134m, an increase of 115% on the £62m value recorded in the same period last year. The latest available figures covered the period from January 2026 to June 2026.

In a note on the half year figures, Experian MarketIQ said: “Scottish M&A in H1 2026 reinforced the ‘volume down, value up’ pattern seen in Q1. Deal volume fell 22% year on year to 236, while disclosed value rose 93% to £8.2bn, the highest first-half total since 2022. Value was heavily concentrated: two £1bn-plus deals delivered 62% of the total, and the first quarter alone accounted for £7.1bn.

“The second quarter was quieter, with 118 deals worth £1.1bn. Mid-market activity was a bright spot, with deals of £10m–£100m doubling from 11 to 22, and financial services and energy deal volumes both rose.”

As detailed in the report, a ‘mega’ deal is one valued at over £1bn. The headline ‘mega’ deals that helped push up the value despite the fall in volume included two worth over £2bn.

The headline deal was the £2.7bn acquisition by Edinburgh-based NatWest Group of Evelyn Partners Group, a London-based provider of investment management and financial planning services for individuals and businesses, from funds advised by Permira and Warburg Pincus.

The company said the transaction, completed at the end of June, created ‘the UK’s leading private banking and wealth management business’, and would ‘transform NatWest Group’s financial planning and investment management capabilities.

NatWest Group CEO, Paul Thwaite, said at the time: “This is a unique opportunity for the Group, delivering unmatched scale and capabilities in a market with considerable growth potential. Our new colleagues at Evelyn Partners bring with them long-standing, trusted client relationships and industry-leading expertise in financial planning and investment management.”

The other mega-deal was the acquisition of LLOG Exploration by Edinburgh-based Harbour Energy for £2.3bn, a deal which marked the Company’s strategic entry into the US Gulf of America, strengthened Harbour’s global portfolio and established a new core business unit alongside Norway, the UK, Argentina and Mexico for one of the world’s largest independent oil and gas companies.

Linda Z Cook, CEO Harbour Energy said when the deal completed in February: “This marks another important step in Harbour’s journey by establishing a leading position in the US Gulf of America. With the combined strengths of our teams, the quality of the assets, and the depth of opportunities ahead, we are well-placed to deliver significant value for our shareholders.”

Notable activity also included the £97m acquisition by Edinburgh-based ERG UK Holding, a subsidiary of Italian wind power group ERG SpA, of a portfolio of seven operational onshore windfarms in Northern England, from OnPath Energy Holdings, a Jersey-based renewable energy company.

And the Glasgow-based energy group ScottishPower secured £600m of funding from the National Wealth Fund to support the development of a subsea power link between Scotland and England, underscoring continued investment in strategic infrastructure and the energy transition.

Shehzad Khalid, Partner at Morton Fraser MacRoberts, said Scotland’s energy infrastructure would play a huge part in the viability of deals next year.

“Looking ahead to 2027, Scotland will remain an attractive market for investing in renewable Projects,” he said. “Projects with secure grid access, planning consent and viable revenue arrangements are better positioned to attract investment. For those facing greater uncertainty, flexible deal structures and the ability to manage risk around development milestones could prove increasingly important in getting deals over the line.”

In the first half of 2026, professional services was the most active sector, with 43 deals, down 22%. Financial services deals rose 74% to 33, with £3.7bn of disclosed value.

Energy & utilities deals more than doubled, from seven to 16, and Harbour Energy featured in four of the top ten deals. TMT fell from 36 deals to 14.

Acquisitions remained dominant, accounting for 159 deals (67% of activity), although this was down 18% on the previous half year. Development capital fell from 48 to 32 deals, and management buy-outs from 18 to 9.

The Experian Market IQ data showed that overseas bidders were involved in 26 deals, against 45, while there were 37 venture capital-backed deals.

Perhaps one of the most significant deals of the past 12 months was Karman’s £70 million acquisition of Glasgow-based Walker Precision Engineering. The complex transaction created a strategic European manufacturing platform while securing the next phase of growth for a critical defence and aerospace supplier.

The Glasgow-based high-precision manufacturer was founded in 1979, and has integrated capabilities spanning engineering, advanced materials design, precision machining, electroplating and electromechanical assembly.

Walker Precision Engineering provides mission-critical components to the advanced technology aerospace and defence markets. Its products support missile seekers, guidance systems and control systems across more than 25 European tactical missile, air and defence programmes.

As such its sale to a US firm led to significant commercial, financial, legal and regulatory complexities to overcome.

In February, Volaris Group acquired the Edinburgh-based UK hospitality tech firm Zonal company to “accelerate its next generation software”.

Zonal’s portfolio comprises electronic point of sale (EPoS) and hospitality technology solutions, designed to help operators manage day-to-day operations, and its customers include Greene King, Mitchells & Butlers and Pizza Express.

The deal led to the departure of Zonal CEO and shareholder Stuart McLean, who said “Building and leading this company has been the privilege of my life but this is a truly great opportunity for Zonal and our customers. I look forward to seeing the business go from strength to strength.”

The half-year report continued a trend noted in the first quarter for a reduction in the volume of deals but a huge increase in the value. Data for the first quarter of 2026 recorded 66 transactions with an aggregate disclosed value of £3.9bn, compared to 129 transactions over the same period in 2025 - which were valued at £1.94bn.

So while the volume of deals was almost cut in half, the value more than doubled, reflecting a market which has been increasingly driven by high-value energy transitions, financial services consolidations, and strategic cross-border tech investments.

“The data suggests sustained investor confidence, underpinned by a more selective and strategic approach to capital deployment amid a cautious macroeconomic backdrop,” the Experian MarketIQ Q1 report noted.

“Although deal volume declined across small, mid-market and large-cap segments, overall value was materially supported by a landmark mega transaction, underlining Scotland’s continued ability to attract large scale, transformational investment.”

Scottish Enterprise was the most active investor during the first quarter, completing four transactions with an aggregate disclosed value of £5.4m, followed by the Scottish National Investment Bank, which completed two transactions valued at £27.6m.

It has been a challenging 12-months for the SNIB however, after it revealed in August that it had made a net loss of £138m during the 2025-26 financial year. This included £65m of realised losses from the failure of three early investments - M Squared Lasers, the electric car charging firm Trojan Energy and the satellite and digital company Krucial.

There was a further £85m of unrealised losses after rocket manufacturer Orbex and medical technology firm Pneumowave entered administration.

The bank also invested a record £374m in Scottish ventures, while its operating costs were below budget.

The full-year figures are expected to continue the trend for low-volume but high value, with more ‘mega’ transactions to come in, including the £2bn deal agreed in April by Standard Life to buy Aegon UK from its Dutch parent company.

The deal creates a pensions and savings group with 16 million customers and £480bn of assets under administration. It is expected to complete around the end of 2026, pending regulatory approval.

Andy Briggs, the group chief executive of Standard Life, said at the time that the deal was announced in April that it would “significantly accelerate our vision to be the UK’s leading retirement savings and income business”.

And in September Shackleton Advisers agreed to acquire Aberdein Considine Wealth (AC Wealth), adding around £800m in assets under management and advice to its business and expanding its Scottish footprint to more than £1.3bn.

Shackleton chief executive Paul Feeney said of the deal: “This is a transformative deal for Shackleton in Scotland, a country with which our namesake, Sir Ernest Shackleton, had important connections.

“Scotland is a core market for us, and I believe today’s announcement represents an excellent outcome for all parties, most importantly existing clients of AC Wealth, who should in time benefit from our growing scale and strong track record of driving down the cost of investing, while retaining an absolute commitment to providing first-class advice and service.”