FTSE 100 takeover activity jumped in 2024. And with the index moving sideways in the second half of the year, valuations may lend themselves to more takeover activity in 2025. In 2024, five FTSE 100 companies received bids. This is a notable increase from 2023, when no blue-chip stocks were targeted.
This shift, while not seismic, suggests that some institutional investors and firms are finding value in Britain’s top-tier stocks. The average value of takeover deals across the broader UK market increased to £1.07bn in 2024. That’s up from £390m in 2023, indicating a focus on larger, more established companies.
To put this in perspective, the total value of recommended bids — those recommended by the board to shareholders — reached £49bn in 2024, compared to £17.2bn in 2023. While significant, it’s important to note that this figure represents a small fraction of the FTSE 100’s total market capitalisation, which stands at £2.05trn at the time of writing.
FTSE 100 still offers value
The perceived undervaluation of UK stocks appears to be a key factor driving interest. Despite the FTSE 100 seeing a 12% increase in value over the past 12 months, 22 companies within the index have experienced negative share price performance during this period. This disparity has created potential opportunities for acquirers.
The macroeconomic environment is also playing a role in this increased interest. The Bank of England’s gradual approach to monetary policy easing, with expectations of the base rate reaching 3.5% or 3.75% by 2026, has created a more favourable borrowing climate for acquisitions. This slow reduction in interest rates is making financing more accessible. This is good news for potential buyers and is complemented by a relatively optimistic outlook for the UK economy.
It’s worth noting that the FTSE 250 has also seen an increase in acquisition activity. So far, 19 companies have received bids in 2024, compared to three in the previous year. This broader trend across both indexes suggests a wider recognition of potential value in the UK market.
So who are the takeover targets?
Looking ahead, several FTSE 100 stocks may be vulnerable to potential takeovers due to recent share price weakness. Companies such as Burberry (LSE:BRBY), Entain, Diageo, and Whitbread have all been highlighted as potential takeover targets by AJ Bell.
Burberry — recently demoted to the FTSE 250 but not far off re-promotion to the FTSE 100 — is perhaps one of the most obvious takeover targets given the underperformance of the stock, the strength of the brand, and the existing consolidation within the industry. In other words, there are already several companies, like LVMH, which own and operate a significant number of luxury brands.
The iconic fashion brand has seen its earnings growth go into reverse over the past 24 months. In its most recent financial report for the first half of 2025, Burberry posted a pre-tax loss of £80m. That’s a pronounced contrast to the £219m profit recorded in the same period the previous year.
This dramatic shift underscores the severity of the challenges facing the company. Revenue for the six-month period plummeted by 22% to £1.09bn, down from £1.4bn in the prior year. However, I’m sure several industry targets will see opportunities for synergies and cost-efficiencies if Burberry is acquired by another fashion business.
