U.K. M&A activity surges as large firms simplify and foreign buyers target cash-generative assets.

U.K. mergers and acquisitions (M&A) are booming, driven by large-cap companies streamlining their operations and overseas investors seeking British businesses with strong cash flows. Citi U.K. CEO Tiina Lee highlighted examples like McCormick's deal with Unilever's food business and Diageo's sale of its Indian cricket team as part of this trend. While M&A activity fuels momentum in U.K. capital markets, the IPO market remains subdued. The valuation gap between the U.K. and U.S. makes well-established British companies attractive to international buyers, sustaining strong foreign investment.