London's dealmakers earn £1bn amid record M&A frenzy
Takeover boom fuels multimillion-pound payouts while living costs soar
1Record-breaking M&A year
UK-listed company mergers and acquisitions surged 175% to £100bn in 2026, driven by private equity cash and American buyers targeting undervalued British businesses. The London Stock Exchange reported this as the fastest pace of takeovers on record, with 14 major deals involving UK companies totaling £67.6bn. This activity has raised concerns about the London market's future as companies get acquired at unprecedented rates.
2£1.2bn in advisory fees
Investment banks, law firms and accountants earned over £1.2bn from the takeover boom, with JP Morgan leading as the busiest advisor on 14 deals. Slaughter and May emerged as the top law firm. The figures exclude incomplete or unpublished deals like easyJet's £5.7bn potential acquisition by Apollo, suggesting actual fees are even higher. These payouts have sparked public anger during a cost-of-living crisis.
3Bonus cap removal impact
Bankers' compensation soared after the UK government scrapped bonus caps in late 2023, previously limiting payouts to twice annual salaries. Goldman Sachs now allows top performers to earn up to 25 times their base pay. At boutique bank Evercore, senior dealmakers averaged £2m, with the highest-paid collecting £16.2m. Magic circle law firms Linklaters and Clifford Chance paid partners £2.5m and £2.3m respectively.
4Most lucrative deal
The £10.6bn takeover of lab testing group Intertek by private equity firm EQT stands as 2026's biggest transaction, expected to generate £370m in fees. Morgan Stanley, Barclays and Deutsche Bank advise EQT, while Intertek hired Goldman Sachs and JP Morgan Cazenove. Such mega-deals demonstrate how private equity continues reshaping UK corporate ownership despite growing political scrutiny.
5Taxation tensions rise
Banking sector faces 28% corporation tax plus surcharges as Jamie Dimon of JP Morgan warns Chancellor John Healey against further increases. UK Finance argues current rates already disadvantage London versus global rivals. Meanwhile, TUC demands windfall taxes on banks' profits, noting their ability to pay huge bonuses proves capacity for higher contributions during economic hardship.
6Stock market concerns
While M&A booms, London's stock market struggles with just seven listings raising £577m in H1 2026, despite hopes for revival. Airtel Africa's planned IPO offers some optimism. Experts warn banks may lose research and flotation revenue if companies continue leaving the public market. The dichotomy between private dealmaking wealth and public market decline highlights structural challenges.
7Public backlash grows
GMB union condemns 'bloated' finance sector payouts while essential workers struggle, questioning national priorities. With average earnings growth slowing to 3.9% and energy prices set to spike, the £2m+ packages for dealmakers fuel resentment. Critics argue the system rewards financial engineering over productive investment, exacerbating inequality during economic hardship.
8Regulatory crossroads
The M&A boom presents policymakers with dilemmas: curb excessive pay risking London's competitiveness, or tolerate wealth disparities undermining social cohesion. As private equity reshapes UK plc and public markets atrophy, the government must balance financial sector growth with broader economic stability. Coming budgets may redefine the City's social contract amid mounting pressure for reform.
Original article: Business | The Guardian — London's dealmakers earn £1bn amid record M&A frenzy