UK landed record foreign investment in year of Brexit vote

[LONDON] Net flows of foreign direct investment into the United Kingdom hit a record high in 2016, the year of the Brexit vote, boosted by major takeovers, Britain's official statistics office said on Friday.

Net FDI flows jumped to £145.6 billion pounds (S$265.3 billion) in 2016, up from £25.3 billion in 2015 and the largest value recorded for a year since comparable data began to be compiled in 2006.

Anti-Brexit campaigners had warned before the June 2016 referendum that a vote to leave the European Union would make Britain less attractive place to foreign investors. Prime Minister Theresa May has welcomed big takeovers since the vote as a sign of confidence in Britain.

The ONS said the three main components of net FDI flows increased in 2016, although equity capital - typically used for takeover deals - increased the most by far, jumping to £133.8 billion from £26.1 billion in 2015.

"The large value of inward FDI flows recorded were dominated by a handful of high-value M&A deals in 2016," the Office for National Statistics said. "Large publicly reported transactions in 2016 included the acquisitions of SABMiller, ARM Holdings and BG Group." Belgium-based brewer AB InBev's £79 billion takeover of SABMiller, which was completed in October 2016, was one of the largest mergers in corporate history.

Japan's Softbank struck a deal to buy ARM in July 2016 for £24 billion. Shell sealed a £36 billion purchase of BG in February 2016.

Separate ONS figures from its balance of payments data have suggested 2017 is unlikely to be such a bumper year. Inflows of net direct investment to Britain in the first two quarters of 2017 slowed to about £20 billion, down from £82 billion in the same period of 2016.

REUTERS