Report predicts investment in UK engineering firms from Asia

Until now, UK firms, including specialists in aerospace and automotive, have mostly been targeted by Western trade buyers and private equity groups attracted by supply-chain contracts with companies such as Rolls-Royce, BAE Systems and Jaguar Land Rover.

However, Clearwater, a corporate finance advisory firm specialising in mid-market deals, said in a statement that evidence points towards impending acquisitions by investors from China and India.

In its latest Precision Engineering report, Clearwater predicts increasing consolidation in the engineering sector. Some of that is likely to come from buyers from the two powerhouse Asian economies.

Constantine Biller, a partner in Clearwater’s specialist industrials team, said investors were attracted by existing expertise and contracts held by UK firms, particularly those in aerospace and automotive, which could be used to exploit opportunities in their own fast-growing Asian markets.

Engineering companies are also seen as well priced compared with other sectors and there is now less competition from European buyers, who are struggling with anaemic economies.