Key Highlights

  • British dealmaking hit a 26-year high, with buyers agreeing close to $90bn of UK transactions in January and February 2026 alone.
  • Analysis counts 27 potential and confirmed UK takeovers so far in 2026, worth more than $70bn, at an average premium near 43%.
  • Over five years the FTSE All-Share has shed close to 300 constituents once AIM is included, and the UK's share of global stock-market value has slid from 10-15% to roughly 3%.
  • An exodus of incumbents is compounding the bid wave: Glencore is pursuing a secondary Australian listing, Shell's CEO has called its London listing 'undervalued', and Ashtead, Flutter, CRH, Wise and Arm have already left or shifted their primary listing.
  • Policy responses include the FCA's 2024 listing-rules overhaul, the PISCES private-share venue, and the Mansion House Accord, under which 17 pension providers pledged to put at least 10% of default-fund assets into private markets by 2030.

A record run of bids is thinning the London market faster than it can replenish itself, forcing an uncomfortable question in the City: can a shrinking exchange still credibly call itself a global one?

A market being bought out from under itself

The defining feature of London's equity market in 2026 is not a single blockbuster deal but the sheer pace of them. British dealmaking has hit a 26-year high, with buyers agreeing close to $90bn of UK transactions in January and February alone, according to figures compiled by law firm White & Case. In the final quarter of 2025, inward M&A reached £27.4bn, the highest level since mid-2021.

What unsettles advisers is less the value than the direction of travel. Every completed takeover removes a company from the exchange, while the pipeline that should replace them has all but dried up. The result is a market being quietly bought out from under itself — a process the City has taken to calling "de-equitisation".

The scale: how fast London is shrinking

The numbers are stark. Analysis drawing on Deutsche Numis data, cited by AJ Bell and Aberdeen, counts 27 potential and confirmed UK takeovers so far in 2026, worth more than $70bn — nine of them announced in the past month alone. The average premium across roughly three dozen live or completed deals sits near 43%, with the recent bid for outsourcer Mitie pitched at 45% above its undisturbed price. That is the market's blunt verdict: buyers think listed Britain is cheap.

Over five years, the FTSE All-Share has shed close to 300 constituents once AIM is included, and the UK's share of global stock-market value has slid from 10–15% to roughly 3%. Broker Peel Hunt, a persistent chronicler of the trend, notes the FTSE SmallCap has lost 21% of its members in five years and the FTSE Fledgling 37% over a decade. The FCA itself concedes the number of UK-listed companies has fallen by about 40% from its 2008 peak.

Why the buyers are circling

Three forces are drawing acquirers in. The first is the so-called "UK discount": British shares trade at a persistent valuation gap to US and, increasingly, European peers, leaving cash-generative businesses on multiples that private equity and overseas strategics find hard to resist. The second is sterling, which despite recovering from its post-2022 lows still flatters dollar- and euro-denominated bidders. The third is liquidity — or the lack of it. Thin domestic demand, as UK pension funds and insurers have retreated from home equities over two decades, depresses prices and makes companies easier to carry off.

Advisers are careful to separate cause from symptom. Peel Hunt argues the deeper problem is not the discount itself but the "loss of growth companies" and a structural drought of new capital, with takeovers a consequence rather than the disease.

The listings exodus compounding it

If bids are draining the market from one end, an exodus of incumbents is doing so from the other. Glencore, the FTSE 100 miner, confirmed this month it is pursuing a secondary listing in Australia to tap the country's deep pension pool. Shell's chief executive, Wael Sawan, has publicly branded the group's London listing "undervalued" and declined to rule out a move to New York.

The roll-call of the departed is longer still. Ashtead is shifting its primary listing to New York; Flutter Entertainment and building-materials group CRH have already gone; payments firm Wise won shareholder approval in July 2025 to make the US its primary home; and chip designer Arm chose Nasdaq for its 2023 float rather than London. Each defection removes not just a line on the index but a slice of the fees, research coverage and prestige that sustain a financial centre.

The policy response

Westminster and the regulator are not idle. In July 2024 the FCA enacted its biggest overhaul of the listing regime in more than three decades, collapsing the old premium and standard segments into a single category and stripping out mandatory shareholder votes on large transactions — a deliberate tilt towards risk and founder-friendliness intended to lure IPOs back.

Alongside it sits PISCES, the Private Intermittent Securities and Capital Exchange System launched in 2025, which lets private companies' shares trade in periodic windows — an on-ramp designed to keep growth firms in the UK ecosystem before they list. On the demand side, the Mansion House Accord of May 2025 saw 17 pension providers pledge to put at least 10% of default-fund assets into private markets by 2030, half of it in the UK, potentially mobilising £50bn. The more targeted "British ISA", floated in 2024 to channel retail savings into domestic shares, was quietly shelved.

What it means for the City and investors

For investors, the wave is double-edged. Chunky premiums hand shareholders in target companies a windfall and, arguably, prove the market's underlying value. But each cash exit shrinks the opportunity set, concentrates the index in a handful of mega-caps and leaves reinvested proceeds chasing a smaller pool. For the London Stock Exchange as an institution, the danger is a self-reinforcing spiral: fewer listings mean thinner liquidity and coverage, which widens the discount, which invites yet more bids.

Risks and uncertainties

Much here is contested. Some commentators, including those at AJ Bell, read the takeover surge optimistically — as a floor under valuations that should eventually tempt buyers other than acquirers. Whether the reforms work is unproven: rule changes take years to alter behaviour, the pension pledges are voluntary, and a genuine IPO revival has yet to materialise beyond a scattering of smaller floats. A single large new London listing, or a shift in the interest-rate and sterling backdrop, could change the mood quickly.

What to watch

  • Whether 2026's bid tally keeps pace once the larger deals, which advisers expect to slow, have worked through.
  • Any firm decision by Shell or another heavyweight on a US move — the symbolic blow would dwarf the mechanics.
  • Early trading volumes on PISCES and hard evidence that pension money is actually flowing into UK equities.
  • The autumn fiscal set-piece, for any revival of retail-focused incentives after the British ISA's demise.
  • The IPO pipeline: London needs new listings, not merely fewer delistings, to break the cycle.