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www.ma-review.uk I I S E M T N A T R E C N U N I A & M S T E K R A M G N G D R B I I S E R U T U F G N D L I U B I 6 2 0 2 / 1 e u s s I | 1 e m u o V l i H b m G s e c v r e S a d e M A & M i MERGERS & ACQUISITIONS · Equity Investments · Alliances · Restructurings · Divestments · Private Equity

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EDITORIAL M&A IN UNCERTAIN TIMES BRIDGING THE M&A DIVIDE Dear Readers, Mergers and Acquisitions (M&A) sit at the heart of corpo- rate transformation. They allow firms to renew their capa- bilities, enter new markets, access technologies, reshape portfolios, and respond to strategic drift. Yet, the paradox remains striking: despite decades of research, sophistica- ted advisory practices, refined due diligence processes, better spreadsheets, and increasingly professional integ- ration playbooks, the success rates of M&A have not fun- damentally improved and still resemble a coin toss. The question, therefore, is not whether we know too little about M&A. The more uncomfortable question is whether we have been trying to solve the wrong problem. For too long, the relationship between M&A research and M&A practice has been shaped by a divide. Academics often generate rigorous insights that remain locked in jour- nals, written in a language and format that remain irrele- vant for practitioners. Practitioners in turn, develop expe- rience-based knowledge under time pressure, in complex and politically charged situations, but this knowledge often remains local, implicit, and difficult to generalise. The result is a persistent theory-practice gap. The M&A REVIEW UK is founded on the conviction that this divide can and must be bridged, in both directions. Research should not be translated into simplistic recipes, and practice should not be reduced to anecdotal wisdom. What is needed is a space where rigorous evidence, prac- titioner experience, and market intelligence can interact. The goal is not taking a prescriptive role. M&A is too com- plex, too context-dependent, and too political for universal prescriptions. Rather, the task is to create a genuine ex- change between research and practice: one that allows research to ask better, more relevant questions, and ena- bles practitioners to think differently about the patterns, tensions, and logics that shape their deals. This distinction matters. If research only speaks to practi- ce in the form of ready-made answers, it will disappoint. If practice only treats research as distant theory, it misses an opportunity to reflect on its own assumptions. A more pro- ductive relationship is reciprocal. Practice brings the ambi- guity, pressure, and richness of deals into the conversation. Research brings structure, evidence, and conceptual clari- ty. Together, they can move the discussion beyond isolated best practices and toward a deeper understanding of why certain M&A patterns repeat, and how they might be ad- dressed differently. This is particularly important because M&A failure rarely results from one poorly executed process step alone. Of course, valuation matters. Due diligence matters. Integra- tion planning matters. Communication, governance, and culture matter. But improving each of these activities in isolation will not necessarily improve the overall outcome. Contrary to the linear, task-based view, acquisitions are not sequences of tasks, they are systems of interdepen- dent decisions unfolding across different layers. A deal can be financially sound but strategically irrelevant. It can be operationally well integrated and still destroy the very ca- pability it was meant to acquire. It can deliver quick cost synergies while undermining long-term renewal. This is why improving M&A outcomes requires more than better tools. It requires better ways of thinking. The M&A REVIEW UK aims to provide this way of thinking. It will provide a platform where research does not remain theoretical, and practice does not remain isolated. It will bring together academics, dealmakers, corporate leaders, advisers, and investors to examine not only what is happe- ning in the market, but why certain patterns repeat and how they can be managed more effectively. Our ambition is to contribute to a more reflective, evidence-based and practice-relevant M&A conversation in the UK and beyond. This is the space the M&A REVIEW UK seeks to occupy: at the intersection of research and practice, evidence and experience, insight and action, and communication. Not as a bridge from academia to practice alone, but as a two- way platform through which both can learn, challenge, and strengthen each other. Yours sincerely, The Editorial Team of M&A REVIEW Prof. Dr. Florian Bauer Stefan Schneider Alexander Griesmeier published by – a brand of M&A Media Service GmbH M&A REVIEW UK 1/2026 • Volume 1 I

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W&I Insurance Perspectives from the UK and European M&A Market in times of challenges: Warranty & Indemnity Insurance as a Strategic Deal Enabler Katie Devlin & Sebastian Tuff, Liberty GTS 25 Target Screening The Accumulation Effect: How M&A Screening Quietly Undermines Strategic Intent Dr. Mai Anh Dao & Dr. Wieland Alge, MADiscover, Prof. Dr. Florian Bauer, University of Bristol Business School 28 Point of View Where Intellect Meets Capital: Why the M&A Ecosystem Needs the Symbiosis of Academia and Practice Jan Pörschmann, atares 31 Bristol M&A Society The London Discount: Five Deals Defining UK M&A in 2025–2026 Erik Pavlovskyy, Gwen Sargent, Charlotte Bryce, Jai Chauhan, Jeevan Johal & Arjun Sandhu 33 Award Sharing Excellence – Stimulate Exchange: Make Better Deals Stefan, mandaco 36 CONTENTS Editorial Bridging the M&A Divide I REPORTS Strategy When Low-Hanging Fruits Kill the Future: Maintaining Strategic Intent in Transformational M&A Prof. Dr. Florian Bauer, University of Bristol Business School 1 Markets Will the UK remain a major global player? A UK perspective on Global M&A Duncan Angwin, University College London (UCL) 6 EY Perspective: UK M&A Market Trends over the last 5 years Klaus Ort, EY 9 Legal A UK perspective: M&A in uncertain times Alistair Francis, Louise Grzasko & Dipika Keen, Osborne-Clarke 12 Transformation Portfolio Management in Complex Markets: From Episodic Optimization to Continuous Transformation Tobias Huesmann, Interpath 15 The Art of Letting Go: How a Carve-out Unlocks the Potential of a High-Performing Mid-Sized Organization Joseph Wu & Alexander Griesmeier, Grant Thornton 19 IIII M&A REVIEW UK 1/2026 • Volume 1

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IMPRINT Issue 1/2026 | Volume 1 www.ma-review.uk Editor Prof. Dr. Florian Bauer • University of Bristol Business School • University of Bristol M&A Observatory • University of Bristol Bristol, United Kingdom • www.bristol.ac.uk Editorial Office M&A Media Services GmbH • Stefan Schneider (Project Lead & Publisher) • Habenschadenstr. 16, 82049 Pullach, Germany hello@manda.co • www.manda.co Publisher M&A Media Services GmbH • Habenschadenstr. 16, 82049 Pullach, Germany • hello@manda.co • www.manda.co Managing Director: Stefan Schneider Academic Partner University of Bristol Business School • University of Bristol M&A Observatory, Bristol, United Kingdom Publication M&A REVIEW UK is an international publication focusing on mergers & acquisitions, private equity, transformation, restructuring, entrepreneurship through acquisition and strategic corporate development. The publication serves as a platform connecting academia, advisory, corporates, investors and future talent within the European M&A ecosystem. Subscription Management M&A Media Services GmbH • Subscription Management M&A REVIEW UK • Habenschadenstr. 16, 82049 Pullach, Germany • hello@manda.co Cover & Visual Identity Layout & Realisation Henrike Tack ht.design.marketing • Schulstraße 17, 17194 Moltzow, Germany • Mail: info@ht-design-marketing.de • www.ht-design-marketing.de Printing Joh. Walch GmbH & Co. KG, Im Gries 6, 86179 Augsburg, Germany Liability & Notices Articles, recommendations and information published in M&A REVIEW UK are based on sources considered reliable by the editorial team. However, no guarantee can be given regarding completeness or accuracy. The editorial office reserves the right to shorten, edit or reject unsolicited submissions. Opinions expressed in signed articles are those of the respective authors and do not necessarily reflect the views of the publisher, editor or academic partners. Copyright © 2026 M&A Media Services GmbH, Pullach, Germany. All rights reserved, including translation rights. No part of this publication may be reproduced, stored or transmitted in any form or by any means without prior written permission of the publisher. Photography & Media Notice Photography and video recordings may take place during related M&A REVIEW UK events and activities. Participation may imply consent to the use of visual material for editorial, promotional and community communication purposes unless otherwise stated in writing. Contact hello@manda.co • www.ma-review.uk AD M&A REVIEW UK 1/2026 • Volume 1 IIIIII

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REPORT • STRATEGY When Low-Hanging Fruits Kill the Future: Maintaining Strategic Intent in Transformational M&A Prof. Dr. Florian Bauer, University of Bristol Business School 1. Introduction Mergers and Acquisitions are often announced with the language of transformation. Companies acquire to access new technologies, enter new markets, build digital capa- bilities, reshape value chains, strengthen resilience, or repo- sition themselves for a future that organic development alone cannot reach quickly enough. In this sense, M&A is one of the most powerful instruments of corporate renewal. Yet many acquisitions that begin with transformational ambition end as exercises in short-term value capture. The deal is justified by the future. But integration is often managed for the present. This is one of the central tensions in M&A. At the outset, senior leaders discuss strategic renewal, new capabilities, business model innovation, market access, or long-term repositioning. Once the deal progresses, however, manage- rial focus shifts toward what is tangible, measurable, and immediately actionable: cost synergies, process harmoniza- tion, reporting structures, procurement savings, headcount reductions, systems integration, and other visible quick wins. None of these are wrong in themselves. Indeed, many acquisitions require disciplined integration and early value capture. The problem emerges when these short-term gains begin to crowd out the strategic future that justified the acquisition in the first place. In transformational M&A, the greatest risk is not that no value is realized. The greater risk is that the wrong value is realized first. 2. The M&A Paradox: Acquisitions are Necessary but Dangerous Acquisitions occupy a paradoxical role in corporate strat- egy. On the one hand, they are among the few manage- rial tools capable of accelerating strategic renewal. When firms face technological change, shifting customer needs, new competitors, regulatory changes, or business model erosion, acquisitions can provide access to resources and capabilities that would take years to build internally. This matters because successful companies often become prisoners of their own success. Over time, routines become formalised, structures harden, and established ways of working become difficult if not impossible to question. The organisation becomes highly efficient at doing what made it successful in the past, while becoming less prepared for what tomorrow requires. Strategic drift often hides behind strong current performance. In such situations, acquisitions can help firms reintroduce variation. They can bring in new capabilities, new people, new technologies, new customers, and new ways of com- peting. They can help close the gap between the com- pany’s current trajectory and the future it needs to create. On the other hand, acquisition performance remains deeply uneven. Many deals fail to deliver their strategic or financial expectations. This is not because M&A is inher- ently flawed. Rather, it is because acquisitions are difficult to manage as instruments of renewal. The same pro- cess that is meant to transform the company can easily become dominated by transaction momentum, financial modelling, execution pressure, and integration routines. 11 M&A REVIEW UK 1/2026 • Volume 1

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That is the paradox: Acquisitions are often necessary because firms must renew themselves, but they are dan- gerous because the process can undermine the very renewal they are meant to enable. 3. The Strategic Idea is Fragile Every transformational acquisition should begin with a stra- tegic idea. This idea does not merely explain why the target is attractive. It explains what the acquirer is trying to become. A company may acquire a software business not simply to add revenue, but to shift from product sales to data- enabled services. It may acquire a logistics specialist not merely to optimise distribution, but to build a direct-to- customer business model. It may acquire a niche technol- ogy firm not because of immediate profits, but because the target possesses capabilities that could redefine the acquirer’s future value proposition. In these cases, the acquisition is not just an asset purchase, or the purchase of an undermanaged asset (which was a dominant deal logic in the past). It is a bet on a future state. But this strategic idea is fragile. It must travel across the entire M&A process and across hierarchies. From corporate strat- egy, to target screening, from target screening to due dili- gence, from due diligence to valuation, from signing to inte- gration, and from integration to post-deal evaluation. At each stage, the idea can be sharpened, translated, diluted, or lost. In the pre-merger phase, the danger is that the strategic idea becomes reduced to financial feasibility. The original question “What is the future that we are trying to create?” is replaced by narrower questions around valuation assump- tions, comparable transactions, synergy estimates, and deal mechanics. Financial discipline is essential, but it can become problematic when the spreadsheet becomes the strategy. In the transaction phase, the danger is momentum. As resources are committed, advisors engaged, manage- ment attention it becomes harder to step back and ask whether the acqui- sition still serves the desired transformation logic. invested, and expectations raised, In the integration phase, the danger is operational grav- ity. The organisation must now act. Systems need to be aligned, reporting lines are clarified, structures adjusted, people reassured, customers protected, and synergies delivered. Under this pressure, managers naturally gravi- tate toward what they can control. The strategic idea, which is often abstract, long-term, and uncertain, can be overwhelmed by functional tasks that are concrete, imme- diate, and measurable. REPORT • STRATEGY 4. The Three Layers of M&A Value One way to understand this problem is to distinguish between three layers of M&A value: the strategic layer, the business-model layer, and the functional layer. The strategic layer defines the long-term aspiration of the acquisition. It answers the question: why are we acquiring, and what future position are we trying to create? This may involve entering new markets, accessing new technolo- gies, transforming the portfolio, strengthening the core, or creating options for future growth. The business-model layer translates this ambition into a logic of value creation and delivery. It answers the ques- tion: how will the combination of acquirer and target cre- ate, deliver, and capture value in a way neither firm could achieve alone? This is where the real transformation logic often sits. The target may provide new value creation capabilities, while the acquirer provides market access. Or the target may provide customer access, while the acquirer provides products, capital, and scale. The functional layer operationalises the acquisition. It answers the question: which systems, processes, struc- tures, functions, and people need to be aligned to make the combination work? All three layers matter. The problem is that they differ in visibility, measurability, and time horizon. Functional synergies are often immediate and measurable. They can be translated into project plans, saving targets, and integration milestones. Strategic and business-model synergies are usually more uncertain. They may depend on learning, experimentation, trust, capability transfer, mar- ket development, or customer adoption. They often take longer to materialise and are harder to quantify early on. This creates a predictable bias. During integration, the functional layer tends to dominate. It promises progress. It produces numbers. It creates the impression of control. But in transformational acquisitions, the deepest value often lies at the strategic and business-model layers. If the functional layer dominates too early or too strongly, the acquisition may become operationally efficient but strate- gically disappointing. The company may realise synergies and still miss the transformation. 5. When Low-Hanging Fruits Become Dangerous This is how transformational acquisitions lose their future. Low-hanging fruits are attractive because they create early evidence that the deal is working. They reassure M&A REVIEW UK 1/2026 • Volume 1 22

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REPORT • STRATEGY boards, investors, executives, and integration teams. They demonstrate discipline and provide visible financial ben- efits. In many deals, they are necessary. But they become dangerous when they are treated as the essence of value creation in transformational deals. The danger is particularly acute in acquisitions aimed at renewal, innovation, market entry, or capability building. In these deals, the most important value drivers are often embedded in the target’s people, routines, relationships, culture, decision speed, product knowledge, or customer intimacy. These are rarely visible in a synergy spreadsheet but are easily damaged. A cost-saving measure may look rational in isolation but carry disproportionate symbolic consequences. A report- ing requirement may improve transparency but reduce entrepreneurial speed. A system migration may create control but weaken customer responsiveness. A pro- curement initiative may reduce cost but disrupt supplier relationships that are central to the target’s value propo- sition. A new approval process may reduce risk but frus- trate engineers, developers, or commercial teams whose autonomy made the target valuable. From a functional perspective, these actions may appear sensible. From a strategic perspective, they may destroy the future. This is why transformational M&A requires a different dis- cipline. The question should not only be: what value can we capture quickly? The better question is: what value must we avoid destroy- ing while we capture what is necessary? 6. Integration is Not Value Creation Per Se It is often said that value creation in M&A happens during integration. This is true, but incomplete. Integration is not value creation per se. Integration is the process through which the strategic intent of the acquisi- tion is either realised or undermined. This distinction matters. If the acquisition logic is primarily exploitative, for example consolidation, scale, cost efficiency, or operational improvement, then functional integration may be the main path to value creation. In such cases, speed, standardisation, systems alignment, and cost synergy cap- ture may be appropriate. Here, the functional layer is central because the deal logic itself depends in integration. capabilities, or creating a new business model, then the path to value is different. Value may depend less on struc- tural integration and more on interaction, learning, selec- tive connection, and the preservation of difference. In exploitative deals, value is often created through integra- tion, in explorative deals, value emerges through interaction. Confusing these logics is one of the most common causes of acquisition failure. Companies use integration approaches that fit efficiency-driven deals and apply them to transfor- mation-driven deals. They impose standardisation where learning is needed. They centralise where local knowledge matters. They harmonise where difference is the source of value. The issue is therefore not whether integration is good or bad. The issue is whether the integration approach matches the acquisition logic. 7. Maintaining the Strategic Idea If transformational M&A is vulnerable to the crowding-out effects of short-term value capture, then the central man- agerial task is to maintain the strategic idea throughout the process. This does not mean repeating the deal rationale in pres- entations. It means translating the strategic idea into deci- sions, principles, metrics, and governance choices. A useful starting point is to formulate the acquisition’s desired future state in concrete terms. Not simply: “This acquisi- tion will accelerate digital transformation.” But rather: “This acquisition should enable us to build a recurring revenue model based on data-enabled services, combining the tar- get’s software capability with our installed customer base.” Not simply: “This acquisition gives us access to an attrac- tive market.” But rather: “This acquisition should allow us to enter the market through local relationships and customer knowledge that must be preserved during integration.” Not simply: “This acquisition strengthens innovation.” But rather: “This acquisition gives us access to engineering capabilities and decision routines that are valuable pre- cisely because they differ from our own.” Once the future state is explicit, it can guide the entire pro- cess. Target screening can ask whether a target contributes to the desired future, not merely whether it fits current categories. But if the acquisition logic is explorative, for example acquiring innovation, entering new markets, building new Due diligence can examine not only risks and financials, but also the sources of value that must be protected. 33 M&A REVIEW UK 1/2026 • Volume 1

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REPORT • STRATEGY Valuation can distinguish between short-term functional synergies and longer-term strategic or business-model value. The problem is not bad or poor management. The prob- lem is unmanaged coherence. Integration planning can separate what must be inte- grated quickly from what must remain autonomous, experimental, or protected. Post-deal evaluation can assess not only whether planned synergies were realised but whether the company has actually moved closer to the desired future state. This is what it means to maintain the strategic idea. 8. From Synergy Management to Coherence Management Traditional M&A management often focuses on synergy management. Identify synergies, quantify them, assign owners, track progress, and report realisation. This is impor- tant, but in transformational acquisitions it is insufficient. What is needed is coherence management. Coherence management asks whether the strategic layer, business-model layer, and functional layer continue to reinforce each other over time. It asks whether the acquisi- tion’s long-term purpose is still connected to the business- model logic and whether functional integration decisions support rather than undermine that logic. In practice, this means asking different questions: • Are we still pursuing the future state that justified the deal? • Have our integration decisions shifted the deal toward short-term efficiency at the expense of strategic renewal? • Do the metrics we track reflect the real sources of value? • Are we protecting the capabilities, relationships, and routines that made the target attractive? • Are we using our integration playbook because it fits the deal, or because it is familiar? • Are we creating operational progress but strategic drift? The shift from synergy management to coherence manage- ment is especially important because many acquisition deci- sions are locally rational but globally inconsistent. A finance team standardises reporting because transparency mat- ters. IT harmonises systems because complexity is costly. HR aligns policies because fairness is important. Procurement consolidates suppliers because scale creates savings. Each decision may be defensible. But together, they can create a pattern that undermines the acquisition’s very strategic logic. 9. Practical Implications for M&A Leaders For executives, boards, corporate development teams, and integration leaders, the message is practical. First, distinguish clearly between the acquisition logic and the integration logic. Do not assume that every deal should be integrated in the same way, even though the efficiency of repeating the same things over and over again would be appealing. Consolidation deals, capability deals, plat- form deals, market-entry deals, and innovation deals cre- ate value differently. Second, define the desired future state before the process becomes dominated by valuation, execution, and low- hanging fruits. A transformational deal needs more than a financial business case. It needs a clear view of what the company should become because of the acquisition. Third, identify the source of value before identifying those synergies that appear salient and proximate. Is value expected at the functional layer, the business-model layer, or the strategic layer? If this is unclear, integration will default to what is easiest to measure and fast to realise. Fourth, treat low-hanging fruits with caution. Early syner- gies are useful only if they do not harm the long-term value logic. The question is not whether a quick win is available, but whether capturing it changes the conditions under which strategic value can emerge. Fifth, build integration principles from the deal logic. If the deal is about efficiency, integration principles may empha- sise speed, standardisation, and control. If the deal is about renewal, they may emphasise learning, selective connec- tion, autonomy, and capability protection. Sixth, evaluate the acquisition against the desired future state, not only against a business case. A deal may meet its cost synergy targets and still fail strategically. Conversely, a transformational deal may show limited early financial impact while building the capabilities required for future growth. 10. Conclusion: Do Not Let the Present Consume the Future Transformation through M&A is difficult because it requires organisations to manage two different activities at the same time. They must deliver visible value in the present. But they M&A REVIEW UK 1/2026 • Volume 1 44

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REPORT • STRATEGY must also protect and develop the future that justified the acquisition. The first activity is easier and straightforward: It is meas- urable, reportable, follows a checklist, and in most cases familiar. The second is more difficult. It is uncertain, delayed, and often dependent on fragile capabilities, relationships, and learning processes. This is why transformational acquisitions so often drift toward short-term value capture. Not because managers lack ambition, but because the process pulls them toward what is visible and controllable. The central task of M&A leadership is therefore to prevent the present from consuming the future. This requires more than a compelling deal rationale. It requires discipline in maintaining the strategic idea across the entire acquisition journey: from the first articulation of strategic need, through target screening, and due dili- gence, into integration, and post deal evaluation. M&A can accelerate transformation. But only if the acquisi- tion remains connected to the future it was meant to create. AD Low-hanging fruits may be tempting. But in transforma- tional M&A, the real discipline lies in knowing which fruits not to pick. Prof. Dr. Florian Bauer is Professor of Strategic Management at the University of Bristol Business School. Florian investigates organizational transformation processes, especially non-organic growth strategies such as Mergers and Acquisitions (M&A), from strategic, organizational, and procedural perspectives. Particularly, he investigates how firms should strategically think and organisationally embed M&A to survive in the long run and how firms can effectively manage the acquisition process. As engagement plays an important role for him, he regularly exchanges with executives, consultants, and M&A associations. He was actively involved in multiple M&A processes and supported a wide range of firms in developing acquisition strategies and acquisition integration ap- proaches. Since February 2020 he is editor in chief of the M&A Review, he is co-founder and chief research officer of MADiscover GmbH (www.madiscover.com), a start-up company that digitalised M&A screening. Furthermore, he is a board member of the German M&A Association. In 2022 he received the Medal for Research from the British Academy of Management. 55 M&A REVIEW UK 1/2026 • Volume 1

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REPORT • MARKETS Will the UK remain a major global player? A UK perspective on Global M&A Duncan Angwin, University College London (UCL) Mergers and Acquisitions (M&A) play a critical role globally as a primary, high stakes engine for corporate rejuvenation and transformation. The UK is one of the most important players in global M&A activity being closely tied to its origins and subsequent growth. M&A has a very long history in the UK, reaching back to one of the earliest recorded mergers between the East India Company, and its rival, the English Company Trading to the East Indies in 1708 to create the United Company of Merchants of England. This merged company managed to maintain its monopoly well into the 19th century1. Along with longevity of the phenomena in the UK, the country has been the second largest partici- pant in global M&A for decades, coming second only to the USA, where both countries have dominated global deals, although more recently other countries have vied for sec- ond position. This underscores the importance M&A plays in the UK economy and its scale in global M&A activities. The UK also has a track record of innovation in M&A with the first hostile takeover in the world, by Charles Clore in 1953, to be followed by a decade of hostile bids and innovative practices in the 1980s – 1990s.2 The UK pioneered a rules based-takeover regime through the world’s first dedicated takeover regulator, the panel on takeovers and mergers, established in 1968, and a takeover code. The UK became a leader in sophisticated PE-backed take private structures and its M&A advisors were amongst the first to mainstream ESG due diligence into M&A. The combination of a long his- tory of M&A, high volumes of deal activity, deep financial markets, sophisticated advisory systems and a track record of innovation, explain why the UK has been, and continues to be, one of the main global players in M&A today. UK M&A activity has followed the broader global pattern of activity with peaks in 2000, 2007, 2018 and 2021 and troughs in 2003, 2013 and 2020, reflecting geopolitical con- flict, supply chain disruption, technological disruption, and economic uncertainty (Figure 1). As a major player in global M&A, the UK’s M&A landscape cannot be understood in isolation from global shifts. As shown in Figure 2, UK announced deals have remained relatively constant as a proportion of global deals over the last 10 years, at approximately 11% by value and by num- ber, although with a downturn at the beginning of 2025. Although global M&A showed recovery during 2025, in the UK deal volumes fell by 12% mirroring low growth and lack of confidence across the wider economy. Observers such as PwC3 suggest that UK M&A was characterised by fewer transactions but with significantly larger deal sizes, increasing by 28%, and higher deal values, increasing by 12%, reflecting quality over quantity. Figure 2 shows over the last two years that global M&A has been increasingly dominated by the USA, up from its previous levels of around 60% of global totals per year to 72.5% by value in 2025. This dominance matters as the US is outperforming the UK in terms of M&A market share and advisory fees, with Wall Street Banks generating higher M&A revenues. Not only does this show greater concentra- tion of financial power in the US but a weakening of Lon- don’s competitiveness. 1 Angwin, D. N. (2026) Origins of M&A, in Angwin, D.N., King, D., Bauer, F. (eds) (2026) Encyclopaedia of Mergers and Acquisitions, Edward Elgar Publishing. July 2 Angwin, D. N. (2026) Hostile takeovers, in Angwin, D.N., King, D., Bauer, F. (eds) (2026) Encyclopaedia of Mergers and Acquisitions, Edward Elgar Publishing. July 3 PWC (2026) Bigger bets, sharper choices: the new shape of UK M&A, UK 2026 M&A trends. https://www.pwc.co.uk/services/value-creation/insights/ mergers-and-acquisitions-trends.html M&A REVIEW UK 1/2026 • Volume 1 66

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REPORT • MARKETS Fig. 1 Mergers & Acquisitions United Kingdom Source: IMAA (Institute for Mergers, Acquisitions and Alliances) s n o i t c a s n a r T f o r e b m u N 8000 7000 6000 5000 4000 3000 2000 1000 0 700 600 500 400 300 200 100 0 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 (Mar 31) Number of Deals in bil. GBP ) P B G . l i b n i ( s n o i t c a s n a r T f o e u a V l One of the most influential factors influencing London’s competitiveness has been Brexit. The choice to leave the European Union has caused investors and businesses to reassess the attractiveness of the UK as a gateway to Europe and as an acquisition target destination. Whilst there was a short-term decline in confidence, the picture subsequently has been nuanced, partly due to the decline in the value of sterling making UK assets relatively cheaper to those in the US. However, Brexit has also made regu- latory compliance more complicated where cross border deals between the UK and Europe are concerned. This has increased transaction costs and lengthened due diligence processes. Currently the UK government is making signifi- cant efforts to promote a pro-business regulatory environ- ment for business and strengthen trading links with the EU. versities are attractive grounds for acquiring intellectual property, digital capabilities, such as cyber security and AI expertise. Recent examples include; Swedish private equity group, EQT, bid of $12.7bn for Britain’s Intertek in 2026, a multinational Total Quality Assurance provider that operates over 1,000 laboratories in 100 countries that test, inspect and certify that products, systems and supply chains meet qual- ity standards; the $5.3bn take-private acquisition of Dark- trace, an AI and cybersecurity firm, by US private equity firm Thomas Bravo in 2024; the $3.9bn acquisition of Deliveroo, the UK food delivery platform by US company Door Dash in 2025; the acquisition of Schroders, a venerable asset and wealth manager, for $13.4bn by US investment manager Nuveen in 2026. Indeed, at the time of writing in 2026, Reu- ters4 has commented that there is now a rush of foreign bids In terms of target sectors in the UK, the country’s strong technology ecosystem, fintech companies and leading Uni- 4 Sakoui, A. (2026) Foreign bids drive UK M&A to new highs at $192bn already in 2026, Reuters, May 18th Fig. 2 Global v. US v. UK announced deals ($bn) Source: Author derived from public sources 6 5 4 3 2 1 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 USA UK Global 77 M&A REVIEW UK 1/2026 • Volume 1

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for UK companies that puts Britain on track to outstrip pre- vious records, with M&A into the country tripling to £192bn, from the same time the previous year. In addition to the Intertek and Schroder’s deals mentioned above, other nota- ble deals include the merger of Unilever’s food division with US global flavour, seasonings and spices company McCormick for $44.8bn, and the recent $3.7bn offer for sweeteners manufacturer, Tate and Lyle by US listed global food and beverage ingredients manufacturer, Ingredion. Outward M&A by UK firms generally operates at a lower level than inward acquisitions, although recently the gap has grown significantly, with £42.5bn inward M&A ver- sus £16.3bn outward M&A5. The US has consistently been the largest destination for UK overseas acquisitions due to opportunities in technology and energy, the size of the market, sophisticated capital markets and shared legal and language similarities. Otherwise overseas acquisi- tions have tended to be in a relatively small group of other advanced economies, such as Ireland, due to closeness to the UK, strong pharmaceutical and technology sectors and tax advantages, Germany for strengths in manufac- turing, engineering, chemicals and industrial technology, France for consumer brands, transport, infrastructure, luxury goods, energy and utilities, Netherlands as a Euro- pean hub and home to many multinationals, Denmark and Nordic countries for strengths in renewable energy, biotech, logistics and sustainability technology, Australia for mining and natural resources, sports and financial services. Recent examples of overseas acquisitions by UK companies include GSK’s $950m acquisition of 35Pharma, a Canadian biop- harmaceutical company manufacturing biologics products in 2026; GSK’s $2.2bn acquisition of US based RAPT Thera- peutics, a clinical-stage biopharmaceutical company, in 2026; AstraZeneca’s purchase of US based Modella AI, a biomedical artificial intelligence company in 2026; Rio Tin- to’s $6.7bn acquisition of global speciality chemicals com- pany Arcadium Lithium, previously listed on the New York and Australian securities exchanges, in 2025. The imbalance between inward and outward acquisitions emphasizes the attraction of the UK as a stable country with strong shareholder protections, transparent takeover rules and open capital markets. Also, the weakening of sterling has made UK assets more attractive for acquisi- tion. This can be viewed as positive for the UK as it brings foreign investment into the country, it can support employ- ment and innovation, save struggling firms and create shareholder gains. However, it does mean the loss of own- ership and reduced control of strategic industries, although the Government has strengthened its scrutiny of foreign takeovers with the National Security and Investment (NSI) Act 2021 and through specific frameworks such as the Modern Industrial Strategy and the Defence Industry 5 Q3 (2024) – Q3 (2025) Office for National Statistics. https://www.ons.gov. uk/businessindustryandtrade/changestobusiness/mergersandacquisitions/ bulletins/mergersandacquisitionsinvolvingukcompanies/julytoseptember2025 REPORT • MARKETS Strategy. Almost always when UK companies are acquired, the UK headquarters are relocated overseas or closed down with the loss of senior management jobs, and profits flow abroad rather than remain in the UK. Arguably a con- tinuous imbalance of inward M&A over outward M&A can weaken the long-term development of the UK economy as domestic firms may focus more on becoming acquisition targets rather than growing into global competitors. This may be of particular concern for innovative, AI and biotech start-ups. Foreign acquirers are also likely to prioritise their global interest over national ones which could see closures, production shifting abroad, supply chains being reor- ganised. Nevertheless, if inward investment is productive, innovation stays strong and the domestic firm continues to grow, the net effect may be positive for the UK. Looking ahead, it is likely the UK will remain a major player in global M&A. Despite increasing competition from New York, Paris and Singapore, London’s position as a global centre for arbitration, legal services, and international finance remains a major competitive advantage. More broadly the UK’s relatively stable legal system, sophisti- cated financial markets, and strong corporate governance standards continue to make it an attractive destination for international investors seeking certainty in volatile times. There are signs that confidence is gradually returning and many corporations hold very significant cash reserves that can be used for M&A. Companies also need to achieve growth which is likely to be through strategic acquisitions and they are under pressure to adapt to rapid techno- logical changes. For the moment it is likely UK buyers will remain selective, focusing on acquisitions that offer clear technological advantages, operational resilience, or long- term strategic positioning. Whilst the UK’s structural advan- tages will enable it to remain important in global M&A, over the longer term the extent to which the UK’s leading position can be maintained will depend upon its ability to adapt to an evolving global M&A landscape. Duncan Angwin is Professor of Strategic Management and Director of Executive Education at University College London (UCL), ranked number 8 in the world. Formerly he was Dean of Nottingham University Business School and is now an Honorary Professor at the University of Nottingham. Duncan has significant practitioner and academic experience in the areas of Strategic Management and Mergers & Acquisitions (M&A), as a graduate of the Universities of Cambridge and Warwick and as a senior investment banker. He is the most published author in Europe on M&A in journals including ASQ, AMLE, BJM, CMR, JBR, JWB, LRP, MIT SMR, Organization Studies. He has authored twelve books including the first multi-disciplinary book on M&A (Angwin, 2007), co-authors the world best-selling strategy textbook, Exploring Strategy (14th ed), is a co-founder of the European M&A Institute and also Consulting Editor of Long Range Planning (LRP). His work has been cited 8,821 times (Google Scholar). Duncan’s research focuses upon managerial practices in M&A strategy and integration. M&A REVIEW UK 1/2026 • Volume 1 88

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REPORT • MARKETS EY Perspective UK M&A Market Trends over the last 5 years Klaus Ort, EY Post-pandemic Boom and Peak (2021–Early 2022): and financing tightened for large deals, slowing down some transactions. The UK experienced a record surge in M&A activity in 2021, mirroring the global deal boom. Over £175 billion worth of UK deals (more than 3,700 transactions) were completed in 2021 – a 33.5% increase over 2020. Investor optimism was high as companies sought acquisitions to fuel growth after the pandemic slump. In early 2022, 66% of UK CEOs signaled plans to pursue M&A within the year (versus 59% globally), underlining robust deal appetite. The UK also ranked as Europe’s top M&A destination, second globally behind the US, buoyed by its strengths in financial services, fintech, high-end consumer, and industrial sectors. By 2023, UK M&A had clearly cooled off from its 2021 peak, as companies grappled with sustained economic chal- lenges. Deal volumes and values declined across many sectors. For example, UK financial services M&A – a major component of the market – saw 273 deals in 2023, down 9% from 301 in 2022. Total disclosed FS deal value dropped to £12.1 billion, the lowest annual value since 2014. Rising interest rates (peaking above 5%), recession concerns, and fallout from the March 2023 banking turmoil contributed to this slowdown. The trend was not limited to finance: UK private equity activity also moderated, and global cross- border flows shrank amid heightened geopolitical and regulatory frictions. Headwinds and Slowdown (Mid/Late 2022–2023): By mid-2022, macroeconomic headwinds began to tem- per the deal frenzy. Volatile stock markets, surging infla- tion, higher interest rates, and geopolitical uncertainty (e.g. the war in Ukraine) made buyers and sellers more cautious. Even so, deal activity remained resilient through much of 2022. In Q3 2022, 459 UK domestic and cross-border deals were completed – in line with pre-pandemic levels – with especially active dealmaking in industrials, technology, and energy sectors, partly driven by the energy transition and high commodity prices. But valuations started to reset, Domestic vs. Cross-Border Dynamics: UK deal activity in 2023 was characterized by reduced cross-border transactions. In financial services, inbound acquisitions of UK targets by foreign buyers fell (54 in 2023 vs. 65 in 2022), and outbound deals by UK firms abroad also dipped (66 vs. 69). Total inbound deal value declined from £7.7 bn to £6.3 bn year-on-year. This suggests over- seas investors grew more cautious about UK assets during the volatile period. By contrast, domestic deals (UK-to-UK) formed a larger share of activity in the slower market. 99 M&A REVIEW UK 1/2026 • Volume 1

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REPORT • MARKETS M&A Rebound (Late 2024–2025): Sector Dynamics: Toward late 2024, conditions improved and deal confi- dence returned. With inflation easing and expectations of interest rate cuts building, many firms regained their appetite for strategic acquisitions. Global dealmak- ing began picking up: notably, the first half of 2024 saw $2.1 trillion in deals announced worldwide – one of the strongest H1 totals in a decade. In the UK, this translated into renewed M&A momentum that accelerated through 2025. Crucially, UK deal value surged in 2025, even if deal counts remained below peak levels. For instance, UK financial ser- vices M&A in 2025 totaled £38.0 billion (announced and completed deals), up 93% from £19.7 bn in 2024. This jump was driven by a wave of megadeals over £1 billion – 12 such large transactions occurred in FS that year. Inbound M&A interest rebounded sharply: the number of non-UK firms acquiring UK FS targets rose from 74 in 2024 to 94 in 2025, and inbound deal value soared from £3.9 bn to £30.3 bn. In short, foreign buyers returned to the UK mar- ket once macro conditions stabilized, snapping up British assets on a large scale. As EY analysts noted, assuming interest rates and inflation remain under control, the UK’s M&A outlook for 2026 is positive, with companies target- ing transformative deals to drive growth, cost efficiency, and innovation. Focus on Quality and Sustained Momentum (2025–Early 2026): By early 2026, evidence shows that the UK M&A upswing is continuing, albeit in a changed form. Notably, 2025 saw fewer deals but higher total value – volumes fell about 12% year-on-year (to ~2,991 deals, from ~3,411 in 2024), yet total UK M&A value rose ~12% to approxi- mately £131 billion. This reflects a pronounced “quality over quantity” dynamic: dealmakers are concentrating capital on strategic, high-value targets, driving a 28% surge in average deal size. Major transactions have been spurred by opportunities in artificial intelligence and digital infrastructure and by consolidation in key sectors like financial services and energy, all of which helped lift overall M&A values even as deal counts remained below their 2021–2022 peaks. With interest rates plateau- ing after peaking above 5% in 2023 and inflation reced- ing toward target levels, macroeconomic stability has improved dealmakers’ confidence and made it easier to price and finance deals. In turn, capital availability – from both corporate balance sheets and private sources – has increased, fueling a robust pipeline of transactions heading into 2026. The financial services (FS) sector has been at the fore- front of the rebound, experiencing an exceptional recov- ery. Total UK FS M&A deal value nearly doubled from ~£19.7 billion in 2024 to £38.0 billion in 2025, even as FS deal volumes eased slightly (337 deals in 2025 vs. 378 in 2024). In 2025, numerous megadeals (12 over £1 billion) – espe- cially in banking and insurance – drove a 93% jump in FS M&A value year-on-year. Technology (TMT) M&A ech- oed the broader theme of selectivity: the number of UK TMT deals in 2025 dropped to ~590 (from ~741 in 2024) but total TMT deal value rose ~16% to about £19.8 bil- lion as investors paid premium valuations for data-rich, AI-driven platform companies. Energy and infrastruc- ture deals similarly saw rising value despite slightly lower volumes, underpinned by the energy transition and pur- suit of long-term assets – for example, 2025’s largest UK transaction was a £15 billion mining merger, reflecting investors’ focus on critical resources. Healthcare and life sciences deals have remained comparatively resilient and active through the cycle, as demographic trends and technological innovation (e.g. health tech) sustain deal flow. After mostly mid-sized transactions earlier in 2025, a few large cross-border healthcare acquisi- tions in late 2025 (including a £5.2 billion care homes deal) signaled renewed international interest in UK health assets and bolstered confidence in the sector. Industrial and manufacturing M&A has likewise stabilized: while not dominating headlines, these sectors have seen steady deal volumes in line with broader economic improvement and ongoing supply-chain restructuring post-Brexit. Private Equity, Financing Conditions and Cross-Border Flows: Private equity (PE) remains a driving force. In 2023, PE firms were involved in ~42% of UK deal volumes and ~55% of deal value – a record share – as sponsors deployed `dry powder’ even while corporates were retrenching. With significant unspent capital and pressure to deliver returns, PE firms have continued to pursue both buyouts and exits: many are bringing portfolio companies to market in 2026 to monetize investments, feeding trade buyers’ pipelines and secondary buyouts. Financing con- ditions are also gradually improving. Stabilising or mod- estly falling interest rates, along with rebounding credit markets, have eased debt funding constraints for M&A. Additionally, the rise of private credit is providing a more flexible alternative financing source for large deals, helping to get transactions done despite cautious bank lending. Cross-border M&A – which slowed sharply in 2022–23 – is recovering as well. Overseas acquirers have returned in force to the UK, drawn by improved macro M&A REVIEW UK 1/2026 • Volume 1 1010

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REPORT • MARKETS conditions and attractive asset prices (a legacy of ster- ling’s earlier weakness). For example, US-based buyers alone comprised roughly 44% of inbound UK deals in early 2024, and non-UK acquisitions of British financial firms jumped from 74 in 2024 to 94 in 2025. Outbound M&A by UK companies has also picked up pace: UK corporates and financial institutions are again expanding abroad as confidence rebuilds, with one leading sector analysis not- ing that UK acquirers’ overseas deals rose from 65 in 2023 to 97 in 2024 (holding near that level in 2025). agenda. Geopolitical headwinds – from war to interna- tional trade tensions – persist but have not derailed the UK’s recovery. If anything, global shifts are influencing deal strategies: for instance, some investors are gravitating to domestic deals (which entail fewer cross-border inte- gration risks), while others target UK assets as relatively safe, stable investments amid global uncertainty. Overall, the UK’s M&A market has proved resilient and adaptive, with momentum in 2025 continuing into 2026 and compa- nies positioning for strategic, high-value combinations as conditions further stabilise. Regulatory and Geopolitical Factors: Regulatory and political uncertainties, which had damp- ened prior activity, are less of a drag on the market now. The UK’s regulatory regime remains robust yet generally supportive of M&A – tellingly, in 2025 the competition regulator (CMA) did not block a single deal, and new pro- posals have been announced in early 2026 to streamline UK merger reviews in line with the government’s growth Klaus Ort is a senior M&A advisor and partner with over 35 years of experience across transaction advisory, business consulting, and restructuring. He combines deep expertise in building and scaling businesses with strong industry knowledge in Pharma, Life Sciences, and Healthcare. His work is characterized by a strong focus on delivering high-quality, efficient outcomes in complex deal and transformation environments. AD THE NEXT DEAL IS SURE TO COME Stay up to date with all the latest M&A news. Whether it’s transactions, personnel matters or general information: In mandaco’s M&A Newsroom, you’ll find all the latest news straight from the companies involved, advisers and service providers Read directly at: newsroom.manda.co

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REPORT • LEGAL A UK perspective M&A in uncertain times Alistair Francis, Louise Grzasko & Dipika Keen, Osborne-Clarke 1. Introduction Recent years have tested the resilience of the UK merg- ers and acquisitions (M&A) market in ways few could have anticipated and UK dealmakers, operating from an open, internationally active economy with close trading relation- ships across both the Atlantic and Europe, have had to adapt deal terms and processes. 2. An uncertain market Brexit, when it came, produced contradictory impulses: the fall in the value of sterling made UK assets look attractive to overseas buyers, driving a surge in inbound investment, while others adopted a cautious wait-and-see approach, reluctant to commit capital until the shape of the UK’s future trading relationships became clear. The pandemic suppressed deal activity for a short time but was followed by an M&A boom, fuelled by pent-up demand, record levels of private equity dry powder, the growth of the technology sector, and then low interest rates. Geopolitical conflict resulted in further supply-chain disrup- tion. The return of investment controls and trade barriers as instruments of policy introduced a new and unpredict- able layer of risk. Inflationary pressures prompted central banks to raise interest rates, making credit more expensive and some deal economics harder to justify. Taken individually, each of these events might have been treated as a temporary disruption. Taken together, they represent something more fundamental: a structural shift in the environment in which M&A transactions are negoti- ated, documented, and closed. The result is a market in which target valuations are volatile and deal-execution risk has increased. 3. National security controls The most structurally significant recent legal development for UK M&A practitioners has been the introduction of the National Security and Investment Act 2021 in response to ris- ing geopolitical risk. The legislation came into force in January 2022, creating a standalone investment-screening regime. Mandatory advance clearance is required for transac- tions in 17 broadly drawn sensitive sectors ranging from defence and artificial intelligence to advanced materials and synthetic biology. Completion without clearance ren- ders the transaction void. Voluntary notifications are also made where parties identify a risk that the government could use its broader call-in powers, which it retains for up to five years post-closing in respect of transactions that fell outside the mandatory notification regime. The regime is agnostic as to an acquirer’s origin: UK acquir- ers are subject to the same notification requirements as overseas investors. That said, certain investor origins attract disproportionate scrutiny. Early-stage reforms are already under way: the UK government is consulting on the creation of standalone sectors for critical minerals, semi- conductors, and water, while tightening other sector defi- nitions, signalling that the regime is here to stay. M&A REVIEW UK 1/2026 • Volume 1 1212

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REPORT • LEGAL For cross-border deals, the position is further complicated by the European Union’s own investment-screening regu- lations and the introduction of different regimes at national levels. These impose their own notification and review obli- gations. UK dealmakers now routinely face a multi-jurisdic- tional matrix of regulatory consents. The UK process is relatively smooth and clearance is usu- ally given within 30 working days; however the need for advance consent has meant that conditional deals have become prevalent in the UK M&A landscape. 4. Conditional deals and execution risk Historically, UK market practice has favoured simultaneous signing and completion. That preference for deal certainty has not disappeared, but the consequence of more condi- tional deals is that more deals are exposed to the risks of the period between signing and completion. This matters because it exposes both parties to market movements, changes in the target’s business, and the possibility that the commercial rationale for the deal has shifted before the ownership changes hands. 5. Interim protections This increased execution risk has driven a renewed focus on the contractual protections that govern the period between signing and closing. Three mechanisms are par- ticularly important. First, both sellers and buyers need to pay close attention to interim conduct-of-business covenants. These require the target business to be operated on a normal and consist- ent basis between exchange and completion. In a volatile trading environment, buyers need comfort that the busi- ness they are acquiring has not been materially changed or allowed to deteriorate between exchange and comple- tion, and sellers need certainty about what decisions they can and cannot take without buyer consent. Second, buyers will usually seek warranty repetition, requiring the seller to confirm that its warranties remain true and accurate at completion as well as at exchange; if so, sellers may negotiate a mechanism for a second dis- closure letter at completion. This allows sellers to update their disclosures in light of events occurring between sign- ing and closing, protecting them from warranty claims in respect of matters arising in the interim period, while giv- ing buyers the option (in some structures) to walk away if the updated disclosures reveal a material deterioration. Third, material adverse change (MAC) clauses, historically rarely invoked in UK-governed transactions and regarded as 1313 M&A REVIEW UK 1/2026 • Volume 1 predominantly a US market convention, have come under the spotlight. Under English law, MAC clauses must be con- strued in accordance with ordinary principles of contractual interpretation and the trigger event assessed at the point the MAC clause was invoked. “Material” requires something significant or substantial impacting the company’s earning power over years rather than months. However, even with a tightly drafted clause, buyers are likely to find it challenging to invoke a MAC, and they take considerable risk if they do, as an incorrectly invoked MAC can expose the buyer to a claim of repudiatory breach of contract. Nevertheless, MAC clauses can provide buyers with leverage to reopen discus- sions on price, or to obtain concessions on other deal terms. 6. Locked box versus completion accounts Price-adjustment mechanics have always been a signifi- cant area of negotiation, but market turbulence has sharp- ened the debate between the two dominant approaches. The locked-box mechanism fixes the price by reference to actual financials as at a date prior to exchange, eliminating post-closing price-adjustment risk and providing both par- ties with price certainty from the moment of signing. Locked- box mechanisms are typically used in a seller’s market where the buyer takes on more of the economic risk or in private equity-backed deals where both seller and buyer wish to remove the risk of a post-closing financial dispute and where funds typically prefer to draw down once on completion and not make further calls to satisfy a pricing adjustment. However, locked boxes come with challenges where the market is volatile and where there is likely to be a long gap between exchange and completion, both features of the market in recent times. In these conditions, the more likely it is that the price will not reflect the true value of the busi- ness at completion, and the harder it will be to set the so- called “profit ticker” that compensates the seller from the point of the locked-box date to the point of completion at an agreeable rate. The completion accounts alternative retains flexibility where the target’s trading position is genuinely uncertain, allowing the purchase price to be adjusted by reference to the actual financial position of the business at clos- ing. However, it introduces post-closing dispute risk and requires more sophisticated controls. In recent years, the locked-box mechanism has retained its dominance in private equity-backed UK transactions, whilst completion accounts remain more prevalent in trade deals. Historically US acquirers were less inclined to use locked-box mechanisms when acquiring UK assets in an M&A transac- tion, but that distinction is less often observed: US investors in UK assets will, for the right deals, be willing to use the simpler locked-box mechanism for determining completion value.

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REPORT • LEGAL 7. Earn-outs: bridging the valuation gap Valuation disagreements between buyers and sellers have become more acute where short-term financial perfor- mance has been distorted by pandemic-era earnings, supply-chain cost spikes or post-Brexit regulatory change and deals are being priced on forecast figures. In such cases, earn-outs have become an increasingly important bridging mechanism. Drafting earn-out provisions requires care. Parties must agree on the appropriate performance metric, as well as the period over which performance will be measured, how they will determine the amount of each earn-out payment, post-closing obligations on how the buyer conducts the tar- get business and a robust mechanism for dispute resolution. While increasingly prevalent in private equity-backed transactions (despite investors usually preferring price cer- tainty), the interaction between earn-out provisions and management warranties, seller non-competes, and “good leaver, bad leaver” mechanics adds further complexity for deals involving management sellers. For trade buyers, earn-outs can be unattractive as they can limit the ability of the buyer to integrate the target into the buyer’s group during the earn-out period. can include geopolitical events, tariff changes, sanctions exposure and supply-chain disruption. W&I insurance is a recourse management tool, not a substitute for rigorous due diligence or other risk allocation mechanisms. 9. The new normal The cumulative effect of Brexit, the pandemic, geopolitical conflict, and supply-chain disruption has crystallised the need to agree deal terms that appropriately allocate risk across the parties. UK dealmakers no longer treat mechanisms in isolation: interim conduct of business covenants and MAC clauses manage the risks of a sign-to-close period; national secu- rity clearance is a deal-critical workstream from day one; price-adjustment mechanisms appropriate to the deal and earn-outs resolve pricing uncertainty that volatile markets inevitably create; and W&I insurance reduces residual recourse exposure for both sides. English law, the UK’s mature transactional infrastructure and a sophisticated M&A market remain genuine com- petitive advantages. With uncertainty showing no sign of abating, dealmakers who master the full toolkit will be best placed to get transactions done. 8. W&I insurance: managing recourse risk As the risk profile of M&A has changed, transactional risk solutions have gained in popularity. The most common of these is warranty and indemnity (W&I) insurance which has, over the course of the last decade, moved from a niche transactional tool to a mainstream feature of UK M&A. The product serves a dual function: it lowers the risk profile of a transaction for both sides, enabling sellers to achieve a clean exit without retaining significant residual liability, and allows buyers in competitive auction processes to present a more attractive bid by reducing their reliance on seller recourse. W&I insurance is increasingly common in both UK and US transactions, and it is advisable to consider whether it is appropriate early in the transaction process. Insurer competition in the UK market has been intense, driving improvements in policy terms and the speed of the under- writing process. The limits of W&I must, however, be understood clearly. Standard policies exclude known risks, meaning that mat- ters identified in due diligence or disclosed against war- ranties will not be covered. Crucially, macro risks of the type that have dominated the deal environment in recent years generally sit outside the scope of cover. These risks Alistair Francis is a Corporate Partner in Osborne Clarke‘s London office. As Head of Corporate UK, he leads a relationship-driven practice, ensuring that partners stay close to the detail and that clients receive decisive, commercially focused advice. He advises on UK and international mergers and acquisitions, as well as private equity transactions, working alongside financial sponsors, vendors, and management teams across sectors including technology, retail and consumer, and healthcare. Louise Grzasko is a Partner in Osborne Clarke‘s Corporate team. Drawing on over 20 years‘ experience, Louise supports businesses throughout their lifecycle, including IPOs, takeovers, schemes of arrangement, demergers, mergers and acquisitions and joint ventures. Based in Bristol, she acts for a range of clients in the financial services and workforce solutions sectors, from small independently run businesses to quoted companies with multi-national operations. Dipika Keen is a Corporate law specialist and Head of Business Transactions Knowledge, UK. With extensive experience of Corporate law practice and regulation, she has a particular interest in sustainable business practices and ESG considerations. Based in Osborne Clarke‘s Bristol office, she keeps the business and clients up to date on key developments in Corporate law, policy, and regulation, and is also responsible for knowledge management at the firm. M&A REVIEW UK 1/2026 • Volume 1 1414

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REPORT • TRANSFORMATION Portfolio Management in Complex Markets From Episodic Optimisation to Continuous Transformation Tobias Huesmann, Interpath 1. A market environment defined by overwhelming complexity and constant pressure Corporate portfolio management is undergoing a fun- damental shift in a volatile and rapidly evolving trading environment. What distinguishes the current landscape is the simultaneous interaction of several disruptive forces; geopolitical fragmentation, regulatory intervention, tech- nological disruption and demographic pressures. The combined effect produces a level of complexity that increasingly exceeds the processing capacity of man- agement teams. Commentators have come to describe this condition as a “polycrisis”: a set of interconnected shocks whose aggregate impact is greater than the sum of its parts. longer holds in full. The useful life of strategic assump- tions is shortening materially, and with it the value of the detailed multi-year plan as a steering instrument. This produces a genuine paradox: complexity has reached a point at which comprehensive analysis is increasingly unrealistic, yet the need for decisive action and active portfolio steering has rarely been greater. Management teams therefore operate under dual and paradoxical pressure: • Increased uncertainty and ambiguity, which erodes the value of detailed long-term plans • Rising execution urgency, which demands faster and more consequential decisions The consequence for portfolio management is more far- reaching than it first appears. The long-standing assump- tion that markets can be analysed, modelled and forecast with enough reliability to underpin long-term planning no Taken together, these pressures reorient the purpose of portfolio management toward dynamic, continuous transformation, away from the static optimisation of a fixed structure. 1515 M&A REVIEW UK 1/2026 • Volume 1

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Fig. 1 Adapter vs. Preserver Source: Interpath REPORT • TRANSFORMATION t e k r a M w e v i e m u o v l i s s e n s u b / P D G Portfolio value e m u o v l i s s e n s u b / P D G Portfolio value Time Time Traditional market view • Stable markets Continuous growth with limited volatility • Reliable forecasts Dynamic market view • Dynamic markets • Long-term growth under high volatility • Unreliable forecasts t n e m e g a n a M h c a o r p p a ʻPreserver’ approach • Stability • Detail • Profit optimization ʻAdapter’ approach • Flexibility • Speed • Risk protection 2. Portfolio management and strategy: from preserver to adapter At its core, portfolio management serves a single overarch- ing objective, namely to keep the composition of the busi- ness portfolio aligned with corporate strategy and maxim- ise the strategic fit. This objective has not changed, however the stability of alignment has. Where reconciling portfolio composition and strategy was once a periodic exercise, it has become a continuous and increasingly dynamic task. Historically, companies could operate in what might be called “preserver mode.” Stable markets allowed strategy to be translated into relatively durable portfolio structures, and management attention could concentrate on effi- ciency, scale and the long-term optimisation of existing businesses. The portfolio was, in effect, a structure to be refined. That paradigm is now being complemented, if not entirely displaced by an “adapter” posture. In volatile environments, flexibility, speed and risk management become the dominant strategic imperatives, and the portfolio is considered dynamic and something that con- tinuously reshapes. Amidst constantly changing operat- ing conditions there is a constant need to adapt strategy and recalibrate corporate portfolios in consequence. The shift is already observable, we see leaders prioritising flexibility, speed and risk optimisation, perhaps more so over stability. leadership challenge requires a dual mindset: • Preserving the stable, cash-generative core busi- nesses that fund the enterprise • While simultaneously adapting the portfolio toward new opportunities, emerging risks (future business) and reshaping it where there no longer is strategic fit (non-core business) Maintaining a balance between these two is the key chal- lenge of competent portfolio management in the current environment. 3. What modern portfolio management entails In complex markets, portfolio management ceases to be a periodic planning exercise and becomes an institu- tionalised process. Several features define it in practice. First is a willingness to act decisively under uncertainty. Executives must accept incomplete information as the normal condition of decision-making. Waiting for full clar- ity is no longer viable, and the capacity to make timely, consequential decisions on an imperfect basis becomes a source of advantage on its own. This pairs with the sec- ond feature, continuous transformation. Companies must reassess strategic fit on an ongoing basis, treating acqui- sitions, divestitures and internal development as instru- ments for continuous portfolio reshaping. The transition is not, however, a binary one. The central Sustaining that position requires deliberate attention to flexibility and to the manner in which decisions are gov- M&A REVIEW UK 1/2026 • Volume 1 1616

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REPORT • TRANSFORMATION Fig. 2 Regular portfolio reviews assess how well the corporate portfolio delivers the corporate strategy and identify strategic white spots Source: Interpath r p o r ate Strategy o C Goal of portfolio management is to ensure that the corporate portfolio delivers the cor- porate strategy optimally. Reviewing a corporate’s portfolio against its strategy allows to categorize the business: a. Future business is not yet part of the corporate portfolio, yet part of the strategy and hence reflects future business areas that require investment. b. Core business is part of the corporate portfolio and in line with the strategy, hence should comprise the major part of the business. c. Non-core business business is part of the corporate portfolio, yet not in line with the strategy, thus exit options should be evaluated to free up and redeploy capital. Corporate P o r f t o lio The portfolio review is based on objective and quantifiable criteria that in sum provide an optimal approximation of the corporate strategy. erned. It is about maintaining optionality and retaining divestment readiness for non-core assets, structuring integrations and separations so that alternative routes remain available. The governance model must adapt accordingly. Detailed multi-year plans give way to • Clear strategic direction and guardrails instead of detailed multi-year plans • Decentralised execution authority instead of hierar- chical top-down management This enables business units to respond quickly to shift- ing conditions while remaining coherent as a group. This coherence depends on combining two perspectives: • Central portfolio orchestration across portfolio bal- ance, business maturity, risk and capital allocation • Local market intelligence and operational expertise These considerations guide the composition of a portfo- lio. A strong portfolio is defined by its balance between risk and resilience, weighing short-term profitability and long-term growth, and evaluating existing capabili- ties and those the group will require in future. The most underestimated element of that balance is the continu- ous management of the core business. A strong core is responsible for funding future transformation and pro- tecting its cash flows is a precondition for all future plans. However, positioning the core in a purely defensive stance is insufficient, as it must actively be adapted to remain competitive. Only by reshaping the portfolio core over time can it continue to serve as the economic engine on which future strategic direction depends. 4. The rising importance of M&A and value creation In this environment, M&A moves from the periphery of strategy to the centre of portfolio management. Its appeal is, in the first instance, a matter of speed and scale. Compared with organic initiatives, transactions can rap- idly build capability, offer instant market entry, and pro- vide portfolio repositioning at a pace that organic devel- opment cannot match. M&A also changes the degree of change that is possible. Organic transformation is usually incremental, whereas acquisitions and divestitures enable step-change repositioning, allowing a company to enter new technologies, geographies or business models in a single move rather than over several planning cycles. It is for this reason that leading companies increasingly adopt a programmatic M&A approach, shifting from isolated, opportunistic deals toward a continuous sequence of transactions, of varying size, that enable: • Continuous shaping of the portfolio • Systematic capability building • Integrated buy-and-sell strategies This aligns M&A directly with ongoing portfolio transfor- mation rather than treating each deal as a one-off strate- gic event, adapting the target profile as consistently as the overarching strategic vision. M&A conditions themselves have also changed, and not in the acquirer’s favour. Fewer attractive assets are avail- able, buyers have grown more selective, and financing is tighter. Higher interest rates and reduced leverage have restricted the impact of financial engineering, making 1717 M&A REVIEW UK 1/2026 • Volume 1

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Fig. 3 The business maturity usually evolves from future via core to non-core business and inverse to cash flows Source: Interpath REPORT • TRANSFORMATION Invest Invest cashflow to develop new capabilities Cash Flow Harvest Optimize cashflow gene- rated by harvesting competitive core Free-up Redeploy cashflow generated by disposals Future Business Core Business Non-core Business Nurture Develop and grow new capabilities Retain Protect competitive core business Exit Divest non-core business Business Maturity operational improvements as the primary mechanism for strong returns. This means that value creation has become the critical success factor across the entire deal lifecycle, rather than a post-deal afterthought: • Pre-deal (sell-side / separation): carve-out readi- ness, demonstrable stand-alone viability and a cred- ible equity story, established before a transaction is launched • Holding period: active performance management, strategic repositioning and deliberate capability enhancement, rather than passive ownership • Post-merger integration: delivery of synergies and the alignment of cultures, operations and business models, proven in fact and not just on paper Where such efforts are not deliberately pursued at each stage, transactions increasingly struggle to clear the return hurdles that today’s cost of capital imposes. The uncertainty that makes M&A valuable also demands that companies and financial sponsors preserve flexibility within their holdings. Each asset should be managed so that future options remain open rather than closed off, and the conditions for continued ownership should be repeatedly tested. As conditions change, the organisa- tion should be ready to shift between integrating, holding and selling an asset. Buying and selling cannot be siloed activities handled by different teams at different times. These are both functions of the same portfolio strategy, and managing them in unison is a defining feature of the modern portfolio. 5. Conclusion The above outlines why portfolio management in turbu- lent markets is essential. The new challenge is to develop one’s capability to adapt the portfolio continuously under conditions of structural uncertainty. Moving from planning towards action by accepting the backdrop of uncertainty rather than being paralysed by it, and treating M&A and value creation as instruments of ongoing portfolio steer- ing. Each of these shifts marks a departure from the pre- server logic that served stable markets well yet serves volatile ones poorly. Tobias Huesmann is a Managing Director at Interpath, specializing in Operations Deal Services. He focuses on delivering operational deal support across sectors, bringing over 15 years of experience in strategy and operations spanning both advisory and corporate roles. Prior to joining Interpath, Tobias worked in Big Four advisory with a strong focus on carve-outs, post-merger integration, portfolio management, and value creation in deal environments. Earlier in his career, he held roles in strategy consulting and at BASF, building a solid foundation in corporate strategy and execution. Tobias has extensive experience supporting private equity and corporate clients on both buy- and sell- side transactions across industries and deal sizes. He advises throughout the full M&A lifecycle–from pre- deal value creation and operational separation to Day-1 readiness, sign-to-close execution, operational due diligence, M&A process coordination and negoti- ation support, and post-deal integration, including synergy realization and stranded cost management. In addition to his client work, Tobias is a recognized thought leader in M&A. He regularly publishes insights on portfolio management and transformation through M&A and actively collaborates with universities on related research initiatives. M&A REVIEW UK 1/2026 • Volume 1 1818

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REPORT • TRANSFORMATION The Art of Letting Go: How a Carve-out Unlocks the Potential of a High-Performing Mid-Sized Organization Joseph Wu & Alexander Griesmeier, Grant Thornton 1. Introduction Carve-outs are more than legal separations or operational disentanglements. They represent a strategic turning point. This is especially true when a business unit is sepa- rated from a global corporate group and transformed into an independent, internationally active mid-sized company. In such situations, success is not defined solely by executing a smooth Day-1. It depends on whether the newly created organization is able to operate independently, competi- tively and sustainably in the long term. A critical success factor lies in the ability to consciously let go of structures, processes and cost models that no longer fit the future organization. At the same time, a Carve-out creates a unique opportu- nity to actively optimize EBIT by identifying and eliminating unnecessary cost drivers that are often deeply embedded in corporate structures but add limited value to the mid- sized standalone business. This article draws on a Carve-out of a Commercial Vehi- cles business that transitioned from a large corporate environment into an independent company with approxi- mately 1,500 employees worldwide. The Carve-out took place within a span of 12 months out of which the first five months were utilized to plan the execution and get the engine running, while the last seven months were focused on actively separating the business. It illustrates how letting go across structures, processes and mindsets can become a catalyst for efficiency, speed and strategic focus. While qualitative transformation narratives provide impor- tant context, the impact of a Carve-out becomes evident when reflected in financial performance. In this case, the combined effect of the defined improvement levers trans- lates into a significant increase in EBIT. The largest contribution is captured in the “Central cost” block, which aggregates the effects of multiple transfor- mation pillars. This includes the reduction of corporate cost structures (par. 1), the simplification of workflows and governance (par. 2), the outsourcing of non-core functions (par. 3), and the discontinuation of legacy brand-related cost burdens (par. 6). Together, these measures represent the structural shift from a corporate cost logic to a fit-for- purpose mid-sized setup. Corporate Cost Structures has an impact beyond this initial block and is further reflected in subsequent adjust- ments, including “Build-backs”, “Legal entity costs”, “Cost 1919 M&A REVIEW UK 1/2026 • Volume 1

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REPORT • TRANSFORMATION Fig. 1 The Art of Letting Go: How a Carve-out Unlocks the Potential of a High-Performing Mid-Sized Organization Source: Grant Thornton AG ~30% Pre Carve- out EBIT Central cost IT-cost Build-backs Legal entity costs Cost of ownership and rental adjustments Discontinued operations Post Carve- out EBIT of ownership and rental adjustments”, and “Discontinued operations”. These elements capture necessary correc- tions and reallocations that arise when transitioning to a fully independent operating model. Outsourcing also partially feeds into “Build-backs”, as certain capabilities need to be selectively rebuilt in- house to ensure effective vendor steering and opera- tional continuity. The “IT-cost” bar directly corresponds to paragraph 4, reflecting the financial impact of simplifying and modern- izing the technology landscape. Diffused Accountability is not explicitly represented as a separate element in the waterfall. While it is a critical ena- bler for many of the quantified improvements, its impact materializes indirectly across multiple levers and remains primarily visible in qualitative performance gains rather than isolated financial effects. 2. Goodbye Corporate Cost Structures – From Scale to Fit Large corporate organizations are designed for scale, control and risk mitigation. While these characteristics provide stability, they often come with cost structures that are not suited to a mid-sized business operating in competitive markets. From an EBIT perspective, these structures frequently include hidden or indirect cost drivers – such as inflated overhead allocations, duplicated roles, underutilized assets or corporate service charges – that dilute profita- bility without contributing proportionally to value creation. As part of the executed Carve-out, the global footprint and cost base of the business were thoroughly reviewed. This resulted in: • Consolidation of locations, • Closure of non-strategic sites, • Streamlining of organizational layers and overhead functions, • Separation from corporate IT and simplification of the IT landscape. Over a 12-month period, we took a holistic approach by reviewing the P&L, analyzing cost allocations, and assess- ing the installed base in each country (e.g., new business vs. after-sales) to identify potential improvement levers. Based on these insights, we decided to reduce the number of sites by half (from 40 to 20) and consolidate operations into selected regional hubs. To ensure continued supply in “exit countries” – i.e., markets where we no longer main- tain a direct presence – we established partnerships with service providers, distributors, and agents to fulfill con- tractual obligations and meet customer demand. Costs that were previously embedded in corporate struc- tures became transparent and manageable. This trans- parency enabled a systematic identification and removal of non-value-adding cost drivers, e.g. multiple decision layers or process overheads, directly contributing to EBIT improvement. The separation process created a unique opportunity to redesign the cost base in line with the new company’s size, strategy and growth ambitions. Letting go of historically grown structures was not an exercise in austerity. It was a prerequisite for building a lean, resilient organization capable of competing inde- pendently. M&A REVIEW UK 1/2026 • Volume 1 2020

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REPORT • TRANSFORMATION 3. Goodbye Complex Workflows – Mid-Sized Processes as Competitive Advantage Partnering with specialized external providers can enable companies to: Beyond cost structures, the Carve-out triggered a funda- mental shift in how decisions are made. Corporate envi- ronments often rely on multi-layered approval processes, extensive documentation and matrix structures. While these mechanisms serve governance purposes, they can slow down execution and reduce accountability. Such complexity is not only an operational burden – it is also a hidden cost driver. Delays, inefficiencies and exces- sive coordination efforts translate directly into higher oper- ating costs and reduced EBIT margins. The newly established organization used the Carve-out as a reset point to redesign its processes: • Significantly reduced approval levels, • Clear end-to-end ownership instead of fragmented responsibilities, • Direct decision-making at management level. Pre-Carve-out, six different people were required to approve of a single workflow, e.g. to start the recruiting process for an open position. Following the Carve-out, the number of required approval levels was reduced to two. The result was not a loss of control, but a governance model tailored to the organization’s actual needs. This led to fewer delays, less interdependency and more ability to act. Decision-making became faster and accountability clearer. By eliminating process-driven inefficiencies, the organi- zation was able to reduce indirect costs and unlock additional EBIT potential – showing that simplicity can be faster and more profitable. In this context, mid-sized processes emerged as a genuine competitive advantage. 4. Goodbye In-House Non-Core Functions – Outsourcing as Strategic Enabler A further key element of the transformation was the deliberate decision to outsource non-core functions. While large groups often operate extensive shared service cent- ers, such structures are rarely efficient or necessary for independent mid-sized companies. Fewer economies to scale mean that outsourcing might be the more efficient and cost-effective alternative. From an EBIT optimization perspective, in-house non- core functions often represent significant fixed cost blocks with limited flexibility. Transforming these into variable, demand-based cost structures can materially improve operating leverage. 2121 M&A REVIEW UK 1/2026 • Volume 1 • Reduce internal complexity, • Leverage scalable, best-practice solutions, • Ensure high levels of quality and compliance from Day-1. In addition, outsourcing standardized activities creates the opportunity to systematically leverage best cost countries through the provider’s delivery model. Rather than building and managing own offshore structures, companies can benefit from established shared service centers and talent pools, combining cost efficiency with process maturity and resilience. In this Carve-out, specific corporate functions (e.g. Account- ing, HR services and payroll, and Tax compliance and advi- sory services) were outsourced for all locations and entities. This allowed a more efficient handover and knowledge transfer in order to secure business continuity within a tight timeline. Furthermore, the decision strengthened communi- cation and reporting on KPIs which made the tracking of out- sourcing success possible. Through the selected outsourcing partner, shared service centers in India, China and Poland were leveraged for standardized activities, ensuring consist- ent service delivery while optimizing the overall cost base. This shift not only simplifies the organization but also removes structural cost inefficiencies, contributing directly to a more sustainable and scalable EBIT profile. Outsourcing was not primarily driven by cost considera- tions. Instead, it was a strategic choice to allow manage- ment and key functions to focus on the core business, cus- tomers and future growth. 5. Goodbye Oversized IT – Rightsizing the technology landscape IT is often one of the most complex and cost-intensive areas in a Carve-out. Large corporate IT landscapes typi- cally evolve over many years, resulting in highly custom- ized, fragmented and oversized system environments. While these setups may serve the needs of a global organi- zation, they are rarely aligned with the requirements of a mid-sized standalone business. From an EBIT perspective, legacy IT environments fre- quently include significant inefficiencies, e.g., high infra- structure costs, redundant applications, low system utiliza- tion or expensive licensing models – all of which contribute little to operational value. Carve-outs can create a unique opportunity to fundamentally rethink the IT setup through a targeted rightsizing approach. Instead of replicating the existing corporate IT landscape,

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the organization can deliberately challenge which systems are truly required to support its future operating model. In our recent scenario, this resulted in: • Transition from on-premise infrastructure to scalable cloud-based solutions, • Elimination of non-essential and redundant applications, • Replacement of legacy systems with standardized, cost-efficient solutions, • Reduction of complexity in the overall IT architecture. Rather than “copying and pasting” the legacy environ- ment, only business-critical applications were migrated, while others were either consolidated or fully eliminated. This significantly reduced both the cost base and the oper- ational complexity of IT. At the same time, the move to the cloud increased flexibility and scalability, allowing the organization to align IT costs more closely with actual business needs. Fixed infrastructure costs were transformed into variable and demand-driven expenses, which led to improved overall cost transparency and control. IT rightsizing was therefore not just a technical necessity, but it turned out to be a strategic lever. Rightsizing ena- bled the organization to build a lean and future-oriented IT landscape that supports growth while contributing directly to a structurally improved EBIT profile. 6. Goodbye Diffused Accountability – Culture Change as Cornerstone of the Carve-out In addition to structural and process-related changes, the Carve-out required a fundamental cultural shift. In the former corporate setup, responsibilities were often frag- mented across functions and hierarchy levels. Tasks were frequently passed on rather than owned, leading to inef- ficiencies, delays and a lack of clear accountability. Diffused accountability is not just a cultural issue – it is also an economic one. Lack of ownership often leads to dupli- cated work, slower execution and unresolved inefficiencies, all of which act as hidden cost drivers impacting EBIT. The transition to an independent mid-sized organization created an opportunity for a cultural reset, characterized by: REPORT • TRANSFORMATION This culture of ownership became a key driver of efficiency and execution speed. By embedding accountability into roles, governance and leadership behavior, the organi- zation was able to translate structural simplification into tangible performance improvements. Culture change was therefore not treated as a soft topic, but as a critical com- ponent of the overall Carve-out success. As inefficiencies were reduced and execution improved, the organization benefited from a structurally stronger EBIT performance – proving that culture can be a direct lever for financial impact. When asking the workforce at the beginning of the Carve- out, most employees would respond that they are skep- tical to the process and do not understand the decision. However, after a while, the decision was made and almost everyone was looking forward to building a new company with its own identity. 7. Goodbye Legacy Brand – Unlocking Identity, Independence and Growth Beyond structures, processes and cost models, one of the most visible and symbolic “goodbyes” in a Carve-out is the separation from the legacy brand. For many organi- zations, the corporate brand has been a long-standing anchor – associated with reputation, trust and market recognition. However, it often also comes with constraints that limit the strategic flexibility of a newly independent mid-sized company. From an EBIT perspective, legacy brand affiliations can entail significant cost burdens, particularly in the form of ongoing licensing fees, brand usage charges or manda- tory marketing contributions. These cost structures are typically designed for large corporate ecosystems and may not reflect the value they provide to a standalone entity. In the observed Carve-out, the decision to discontinue the use of the corporate brand resulted in: • Elimination of recurring brand licensing costs, • Full ownership of brand positioning and messaging, Increased flexibility in addressing new customer seg- • ments and markets, • Ability to build a differentiated value proposition aligned • Clear end-to-end ownership instead of fragmented with the new strategy. responsibilities, • Defined roles and decision rights aligned with the new organizational model, • Empowered leadership teams with the accountability for outcomes rather than activities, • Reduced escalation and handovers, fostering faster issue resolution. At the same time, the introduction of a new brand enabled the organization to redefine how it presents itself to cus- tomers, partners and employees. Without the constraints of corporate branding guidelines, the company was able to create a more focused, agile and market-oriented external presence. M&A REVIEW UK 1/2026 • Volume 1 2222

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REPORT • TRANSFORMATION This shift also opened the door to new commercial oppor- tunities. In some markets and segments, the legacy brand had created implicit limitations – whether due to position- ing, pricing expectations or channel conflicts. Establishing a new brand allowed the organization to overcome these barriers and access previously untapped sales channels and partnerships. Internally, the new brand became a catalyst for cultural transformation. It provided employees with a clear signal that the organization was entering a new phase – one defined by independence, ownership and entrepreneur- ial thinking. 8. Conclusion: The Art of Letting Go A successful Carve-out is not defined by separation alone. Its true measure lies in the organization that emerges once the transition is complete. Letting go of corporate cost structures, overly complex processes, legacy brand and the assumption that all functions must be kept in-house is essential – but not sufficient on its own. Achieving this outcome requires conscious design choices across scope, timing and operating model. In particular, the way a Carve-out manages the transition from cor- porate dependency to full stand-alone capability has a material impact on both short-term stability and long- term value creation. Rather than a binary choice, speed and independence represent a continuum of strategic options. Accelerated timelines often necessitate Transi- tional Service Agreements (TSAs) to safeguard business continuity, providing temporary access to corporate sys- tems, processes and resources. Longer execution phases, by contrast, reduce reliance on TSAs and create additional room to redesign structures, simplify processes and imple- ment sustainable solutions from the outset. The key is not to avoid TSAs per se, but to use them deliberately and with a clear exit strategy – ensuring they support continu- ity without locking the organization into legacy complexity, cost structures or branding constraints. At its core, a Carve-out can be a powerful lever for EBIT optimization. By systematically identifying and eliminat- ing unnecessary cost drivers, organizations can signifi- cantly improve profitability while building a more agile and focused operating model. Equally important is the shift in cultural patterns. Replacing diffused accountability with clear ownership and respon- sibility enables organizations to fully realize the benefits of leaner structures and faster decision-making and a clearly defined market identity. In addition, it is also important to say goodbye to cultural patterns that no longer serve the business. Replacing dif- 2323 M&A REVIEW UK 1/2026 • Volume 1 fused accountability with clear ownership and respon- sibility enables organizations to fully realize the benefits of leaner structures, faster decision-making and a newly defined market identity. The art of letting go lies in creating space: • • • • • • • for lean cost structures aligned with strategic priorities, for sustainable EBIT improvement through elimination of non-value-adding costs, for pragmatic, mid-sized governance and decision- making, for simplified systems and processes, for a culture of ownership and accountability, for a distinct and independent brand identity enabling new market access, for a focused organization that concentrates on what truly matters. When approached holistically, a Carve-out becomes more than a transition exercise. It becomes a unique opportunity to build a resilient, agile and future-ready organization– designed not for the past, but for the challenges ahead. Alexander Griesmeier is a partner at Grant Thornton and has extensive expertise in operational consulting for carve-outs, integrations, and restructurings, as well as value creation programs. In his role, he has managed domestic and international transactions for corporate and mid- to large-cap private equity clients. He leads the Operational Deal Services practice. Joseph Wu is a manager at Grant Thornton and has solid, in-depth experience in operational transaction advisory. His focus is on carve-outs, operational due diligence, and value creation services for domestic and international clients across a wide range of industries. In his role, he supports corporate and mid- to large-cap private equity clients in complex transactions and operational transformation projects.

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Not every lamp has a genie Savvy deal-makers know that stories don’t always have happy endings. That’s why they need transactional risk insurance from trusted advisers. Wish wisely. Your world is our world www.libertygts.com Liberty Global Transaction Solutions (GTS) is a trading name of the Liberty Mutual Insurance Group (LMIG). Policies are underwritten by LMIG companies or our Lloyd’s syndicate. When we offer insurance products we will state clearly which insurer will underwrite the policy. Any description of cover in this document does not include all terms, conditions and exclusions of any cover we may provide, which will be contained in the policy wording itself. For policies issued in USA, some policies may be placed with a surplus lines insurer; surplus lines insurers generally do not participate in state guaranty funds and coverage may only be obtained through duly licensed surplus lines brokers. © 2024 Liberty Mutual Insurance, 175 Berkeley Street, Boston, MA 02116.

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REPORT • W&I INSURANCE Perspectives from the UK and European M&A Market in times of challenges Warranty & Indemnity Insurance as a Strategic Deal Enabler Katie Devlin & Sebastian Tuff, Liberty GTS 1. Introduction The UK and European M&A markets continue to demon- strate resilience, even as the wider environment remains defined by uncertainty. Deal activity is being driven by increasingly selective buyers, focussed on strong-value creation opportunities underpinned by a well-mitigated approach to downside risk. It reflects a broader backdrop, amongst other factors, of inflationary pressures, supply chain and energy fragility, and the revolution of artificial intelligence technologies. At the same time, ongoing global conflicts are reshap- ing the economic landscape, and with it, the risk profile of transactions across Europe. Uncertainty on interest rates, tighter credit conditions and refinancing pressures have also influenced the pace and structure of deal activity. For many market participants, this has reinforced the need for solutions that can maintain momentum without compro- mising on protection. This is especially true where com- petitive tension, compressed timetables or heightened diligence requirements increase pressure on execution. At the same time, regulatory scrutiny across competition, foreign investment and sector-specific approvals is adding further complexity, particularly in cross-border or strategi- cally sensitive transactions. In this context, there continues to be positive opportunities for strategic deal-making, although parties are seeking greater certainty in deal execution and delivery. Increas- ingly, when utilised alongside other strategic levers, W&I insurance is now considered to be a crucial enabling tool in supporting parties through to deal completion. Rather than simply a point of negotiation in the final stages of a process, W&I insurance often now features as a material factor in how bids are structured, risks are allocated and commercial discussions settled. 2. Role of W&I Insurance W&I insurance is a risk-transfer tool designed to respond to breaches of seller or management warranties and tax indemnities under a share or asset purchase agreement. W&I offers buyers a smoother and less-contentious path to recovery than exercising traditional recourse rights against the sellers. While historically policies could be structured through either buy-side or sell-side cover, the EMEA market is now almost exclusively buy-side policies with little direct engagement between sellers and the insurer. However, the process and policy remains largely dependent on the sellers undertaking a robust disclo- sure exercise against the warranties, and this will be a key area of focus for insurers throughout W&I processes. Accordingly, the quality of disclosure and balance of the warranty schedule remain central to insurer comfort and can materially influence both pricing and coverage out- comes. 2525 M&A REVIEW UK 1/2026 • Volume 1

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REPORT • W&I INSURANCE By essentially stepping into the shoes of the seller for a covered warranty breach, the true value of the W&I prod- uct lies not only in meaningful post-completion protec- tion, but also in the efficiency and reduced deal friction it brings to processes. The W&I product has matured significantly in both the UK and European M&A markets. Historically regarded as specialist tool for private equity exits, W&I is now a familiar feature of private and corporate M&A alike and is widely used to facilitate deals ranging from small and mid-market sales to marquee transactions or corpo- rate carve-outs. As experience with the product grows, advisers and insurers are finding new ways to meet the challenges of the current environment with tailored and innovative solutions. When most effectively implemented, W&I policies sit within the broader context of a thoroughly diligenced and well-negotiated transaction. As attractive assets become subject to more competitive sales, W&I will continue to play a critical role. In practice, this means not only supporting clean exits for sellers, but also helping buyers bridge areas of uncertainty where escrow solu- tions are commercially unattractive. 3. W&I in a market shaped by global factors At a time when buyers and lenders are assessing a myr- iad of macroeconomic factors, there is a notable shift in transaction behaviour. Inflationary pressures remain a persistent consideration for buyers, who are assessing the potential impacts on financing conditions, valuation assumptions and consumer-behaviour. Simultaneously, geopolitical developments have added further complex- ity on issues or energy security and pricing, supply chain disruption and exposure to regions in conflict. Questions of operational resilience in the face of these challenges are no longer peripheral diligence considera- tions, but instead go to the heart of business operations and the transaction value. The tangible impact has been a shift towards physical-asset heavy transactions, where there is a strong and stable anchor of core value1. As artifi- cial intelligence technologies continue their expansion, the ancillary infrastructure required to support this is also driv- ing demand for investment. This is reflected in increased activity and valuations in data centres, power assets, logis- tic platforms and other industrial facilities. by over 200% from 2024 to 2025,2 with NATO countries in Europe expected to commit an additional 300 billion euros by 2030. Traditionally, assets of this nature are associated with long- tail risk considerations and diligence which reflects that. The transactions themselves are subject to increasingly com- plex and robust regulatory requirements and filings. As a result, transaction timelines can be lengthy, and many pro- cesses are paused or abandoned altogether. In these sce- narios, W&I insurance can be crucial in preserving momen- tum, particularly on issues of risk-allocation. By agreeing a commercially appropriate insurance programme, par- ties can shift their focus from post-completion exposures to other deal challenges, with buyers and lenders safe in the knowledge that value is nonetheless protected. This is especially valuable where sellers are unwilling to retain any significant liability, or where a competitive process requires a clean and efficient allocation of risk. However, to achieve this, the interaction between diligence and the W&I underwriting process becomes critical. The effectiveness of the insurance solution is closely correlated to the quality and scope of the underlying diligence exer- cise. Insurers will seek to gain comfort that key areas of risk have been appropriately reviewed, and core valuation assumptions have adequately stress-tested. Rather than replacing robust diligence, W&I policies operate alongside it to provide additional layers of protection. In a complex and fast-changing environment, open and early engagement with W&I insurers on scoping and key coverage points can allow all parties involved to move into the underwriting process with certainty and efficiency. In an active W&I market, the value of the product must be grounded in buyer confidence in the claims record and process-handling of sophisticated and trusted insurance partners. This should play a critical role in the selection process of the W&I insurer. 4. Market Outlook and Key Insurance Trends Insurers themselves are not immune from the larger eco- nomic factors at play. From an underwriting perspective, that is likely to result in a combination of greater under- writing sophistication, deal selectivity and pricing which is reflective of the increased and evolving risks to Insurers. Another key trend that has been a hallmark of recent European M&A, has been the acceleration in defence and military technology investment. Analysis suggests that total deal value in the European defence sector increased W&I insurers will still seek to support clients operating in more exposed sectors and jurisdictions, although there will inevitably be a recalibration in approach. Going for- ward, an increased focus should be expected on how 1 PitchBook, ‘Public PE Titans Are Saying Goodbye to Software, Hello to AI’ https://pitchbook.com/news/articles/public-pe-titans-are-saying-goodbye- to-software-hello-to-ai 2 McKinsey & Company, Top M&A Trends 2026: Navigating a Rapidly Re- bounding Market (2026) p 33 https://www.mckinsey.com/~/media/mckinsey/ business%20functions/m%20and%20a/our%20insights/top%20m%20and%20 a%20trends%202026/2026-m-and-a-trends-navigating-a-rapidly-reboun- ding-market.pdf M&A REVIEW UK 1/2026 • Volume 1 2626

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REPORT • W&I INSURANCE parties identify, disclose and mitigate the risks associated with increased uncertainty, and there will be an appetite from Insurers to see appropriate valuation assessments of these factors. That can be achieved through multi-disciplinary approaches to diligence which reflects the key commer- cial risks. In parallel to that, other tools including deferred consideration arrangements, price adjustments and counter-party engagements create a layered approach to deal-structuring which diversifies potential investment downside. Instead of reliance on one element of deal- protection, parties are seeking to combine commercial, legal and insurance solutions in a way that supports execu- tion while preserving value. This trend also reinforces the importance of early broker and insurer engagement, par- ticularly where transaction timetables are compressed or the underlying asset profile presents more complex cover- age questions. Looking ahead, the W&I product is likely to remain an important feature of UK and European M&A. As market conditions remain unpredictable, the need for pragmatic AD solutions will only grow. The ability of strategic buyers to find and implement these solutions will distinguish them in competitive landscapes and create significant opportuni- ties for value. In this environment, W&I insurance is increas- ingly best understood not as a standalone product, but as part of a broader risk-management toolkit that supports certainty, execution and valuation discipline. Katie Devlin is a Senior Underwriter in Liberty GTS’s EMEA team, focused on complex cross-border trans- actions across Europe and the Middle East. She has experience in healthcare, technology, energy and infrastructure, and qualified as a solicitor at CMS before rejoining Liberty GTS in 2022. Sebastian Tuff is an Underwriter in Liberty GTS’s EMEA team, with experience underwriting complex transactions across Europe, the Middle East and Africa. He has worked across sectors including infrastructure, technology and professional services, and previously spent three years in Chubb’s Transactional Risk team before joining Liberty GTS in 2021.

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REPORT • TARGET SCREENING The Accumulation Effect How M&A Screening Quietly Undermines Strategic Intent Dr. Mai Anh Dao & Dr. Wieland Alge, MADiscover, Prof. Dr. Florian Bauer, University of Bristol Business School 1. Introduction 2. Problem 1: Why Longlists are Rarely Long Many acquisition failures do not begin with a flawed inte- gration plan, an inflated valuation, or a poorly negotiated purchase agreement. They begin earlier, when compa- nies decide which targets are worth considering at all. M&A teams routinely spend months on due diligence, negotiating terms, and significant resources in integra- tion planning. Yet the initial screening process, arguably the most consequential phase of the entire acquisition journey, is frequently completed under time pressure, shaped by advisor networks, familiar market knowledge, and database searches that are narrower than they appear. This matters because every subsequent decision depends on the quality of the initial opportunity set. If strategically relevant targets never enter the longlist, no amount of due diligence can recover them. If the shortlist is built around easily measurable indicators rather than strategic fit, later analysis only refines a biased selection. And if teams com- mit prematurely to targets that are available, familiar, or championed by influential stakeholders, the transaction may already be moving in the wrong direction before for- mal evaluation begins. In principle, a longlist should represent a broad view of the strategic opportunity space. In practice, it tends to reflect what the organisation already knows, where it operates, which names it recognises, and whom its advisers or inter- nal networks happen to surface. A longlist of 30, 50 or even 100 companies may feel compre- hensive if it includes the most visible players in a market. Yet it may represent only a small fraction of the relevant oppor- tunity set. Companies in adjacent industries may be solving similar customer problems. Firms in less familiar geographies may hold strategically valuable capabilities. Smaller or less visible firms may possess technologies or business models that simply do not appear in standard search criteria. Three cognitive patterns consistently reinforce this problem: • Distance bias leads managers to prioritize targets that are geographically, culturally, or organizationally close because familiar territory feels easier to assess. The result is a search process that privileges proximity over strategic relevance. The best target for a capability building acquisition, however, may not be found in the acquirer’s existing network or home market. Research based on 89 interviews with M&A manag- ers reveals a consistent pattern: traditional screening approaches systematically exclude strategically relevant targets, not through one dramatic error, but through a sequence of small distortions. We call this the accumula- tion effect: the progressive dilution of strategic intent as it moves through each phase of the screening process. • The bike shed effect causes teams to default to criteria that are easy to specify and evaluate such as revenue size, industry classification, ownership type, although they rarely capture the actual logic of strategic fit. More complex dimensions, such as capability complementarity, techno- logical adjacency, customer problem overlap, or business model compatibility, tend to be postponed or ignored. M&A REVIEW UK 1/2026 • Volume 1 2828

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REPORT • TARGET SCREENING • Post-hoc rationalisation ensures that once a narrow search scope has been defined, teams justify it as prag- matic or focused. The argument of a broader search would produce too many results, consume too much time, or distract from the core market. These argu- ments are operationally valid, but they can conceal a more fundamental problem: the organisation defines its opportunity space around what is manageable, not around what is strategically relevant. The consequence is simple but severe: the best fitting tar- gets never fail the evaluation. They never enter. 3. Problem 2: When Past Numbers Replace Future-Oriented Strategy The second distortion occurs when is converted into a shortlist. Under pressure to compare com- panies and reduce complexity, screening typically shifts toward indicators that are easy to collect, quantify, and rank. longlist the Financial KPIs become the default: revenue, EBITDA, growth rates, cash flow, return on equity, and other historical indi- cators provide apparent objectivity. They are comparable across firms, they fit into spreadsheets, and they give the process an appearance of objectivity. The problem is not that financial indicators are irrelevant, they clearly matter. The problem is that they become dominant too early and for the wrong reasons. In capability-driven or transformation-oriented acquisi- tions, the critical question is not whether a standalone tar- get currently performs well on traditional KPIs. It is whether the target can help the acquirer build, access, or renew strategic capabilities. That future-oriented logic is much harder to capture with historical financial data. Two reinforcing biases are particularly important here: • Anchoring means that the first information received, typically financial, becomes the reference around which all subsequent evaluation revolves. Targets that look weak against these anchors may be excluded before their strategic potential is properly understood. Firms investing heavily in R&D, building new capabilities, or entering new markets can look unattractive in tradi- tional financial terms precisely because they are pre- paring for future growth. • The Halo effect means that strong performance on one visible dimension creates a positive impression across other dimensions that have not actually been assessed. Financially strong firms may be assumed to have strong management, a sound strategy, attractive capabilities, or cultural compatibility. While a firm with moderate financials may be dismissed despite holding exactly the technology, talent, or market access the acquirer needs. 2929 M&A REVIEW UK 1/2026 • Volume 1 The result is a subtle but consequential substitution: Instead of asking, “which targets best support our strate- gic intent?”, the process begins to ask, “which targets look strongest on the metrics we can compare?” These are not the same question. 4. Problem 3: Why “Good Enough” Wins The third distortion occurs once a shortlist exists and the organisation begins to focus on a small number of pre- ferred targets. By this stage, time and effort have been invested, internal attention has been mobilised, and the process has momentum. Targets known to be available receive disproportionate attention. Availability becomes a proxy for attractiveness. If a company is for sale, open to a conversation, or already known through an advisor, it can quickly become the focal option. The pressure to move forward is reinforced by the fear of appearing indecisive. Two decision-making traps are especially relevant: • Safety bias means the perceive cost of walking away after weeks or months of work can feel more pain- ful than the abstract possibility that a better target exists elsewhere. Restarting the search appears costly, uncertain, and politically difficult. Continuing with an available option feels safer, even if it is not optimal. The threshold for what counts as sufficient quietly lowers. A target that meets some criteria, is available, and has internal support begins to look attractive enough. The organisation gradually shifts from searching for the best strategic fit to justifying of workable deal. • Authority and confirmation bias compound the prob- lem. Target recommended by respected advisors, senior executives, business unit leaders, or trusted network con- tacts receive implicit legitimacy. Once a target becomes favoured, subsequent evaluation tends to focus on con- firming its attractiveness rather than on challenging the underlying assumptions. Contradictory information gets reframed as manageable. Alternative targets receive less attention because they lack an internal sponsor. Commitment builds not through a single formal decision, but through accumulated attention, meetings, and nar- ratives. The more the organisation talks about one tar- get, the more inevitable it becomes. Better alternatives fade not because they were evaluated and rejected, but because they were never seriously engaged. 5. The Accumulation Effect These three distortions do not act in isolation, they com- pound. Distance bias and familiar networks create a long-

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list that is smaller and more conventional than the strate- gic challenge requires. Anchoring and the halo effects shift comparison toward historical financial indicators and eas- ily measurable attributes. Safety bias, authority, and con- firmation bias then increase commitment to targets that are known, accessible, or internally supported. Strategic intent is therefore progressively diluted as it moves through the screening process. An ambitious acqui- sition rationale like new capabilities, technological renewal, market access, or portfolio transformation, is translated into narrower search parameters, simplified evaluation cri- teria, and preference-driven decision-making. By the time the organisation reaches due diligence, it may be applying sophisticated analysis to a target set that was never stra- tegically complete. This explains why many M&A processes feel professional and still disappoint. Teams work hard, advisors provide analysis, models are built. But the quality of the final deci- sion remains constrained by the quality of the initial oppor- tunity set and the logic used to narrow it. In other words, M&A screening can fail quietly. It does not fail through obvious mistakes, but through reasonable decisions that compound. 6. Implications for Practice Better M&A screening is not simply a matter of adding more targets, more data, or more process discipline. The deeper challenge is to keep strategic intent alive through- out the entire screening journey. When developing a longlist, the question should not only be, “which companies do we know?” but “which compa- nies could plausibly hold the capabilities, technologies, cus- tomer access, or business model elements required by our strategic rationale, even if they sit outside our familiar field of vision?” When moving from longlist to shortlist, the ques- tion should not only be, “Which companies perform best on comparable indicators?” It should be, “Which indicators genuinely reflect the future value we are trying to create through this acquisition?” When evaluating preferred tar- gets, the question should not only be, “can we make this deal work?” It should be, “Compared with what?” These questions challenge some of the strongest tenden- cies in M&A decision making. They require teams to resist premature closure, to distinguish measurability from stra- tegic relevance, and to treat availability as information rather than as justification. Technology-enabled approaches combining algorithmic market scanning with AI-powered strategic analyses are increasingly able to address the structural constraints that drive these biases: the cost of breadth, the difficulty of REPORT • TARGET SCREENING quantifying strategic dimensions, and the speed pressure that pushes teams toward familiar options. But the under- lying discipline must come from the team itself. M&A screening is therefore not an administrative pre- phase. It is a core strategic activity. Done well, it expands the organisation’s field of vision, protects the acquisition rationale, and improves the odds that the deal pursued is not merely available but truly valuable. Done poorly, it creates a path-dependent process in which convenience becomes strategy. Because in M&A, the deal you sign is often shaped by the targets you never saw. Dr. Mai Anh Dao is the CEO and Co-Founder of MADiscover, a Strategic Intelligence Company that integrates AI-driven big data capabilities with human strategic expertise. She earned her PhD at the Department of Strategic Management at the University of Innsbruck, where her research was recognized with the Award of Excellence from the Austrian Federal Ministry of Science, Research, and Economy. Alongside her entrepreneurial role, she is an active voice in the international M&A community. She connects academic excellence with corporate M&A to advance a modern understanding of strategic intelligence. Dr. Wieland Alge is an Austrian technology entrepreneur, investor, and former CEO of phion, which he co-founded and led from startup through a successful IPO on the Vienna Stock Exchange in 2007. After Barracuda Networks acquired phion, he served as General Manager EMEA for them until 2018. His M&A experience spans the full lifecycle of transactions—from company formation and growth financing to acquisitions, integration, and successful exits. Today, as a co-founder of MADiscover and partner at MAD Ventures, he supports corporates in M&A target identification as well as invests in other technology companies. Prof. Dr. Florian Bauer is Professor of Strategic Management at the University of Bristol Business School. Florian investigates organizational transformation processes, especially non-organic growth strategies such as Mergers and Acquisitions (M&A), from strategic, organizational, and procedural perspectives. Particularly, he investigates how firms should strategically think and organisationally embed M&A to survive in the long run and how firms can effectively manage the acquisition process. As engagement plays an important role for him, he regularly exchanges with executives, consultants, and M&A associations. He was actively involved in multiple M&A processes and supported a wide range of firms in developing acquisition strategies and acquisition integration ap- proaches. Since February 2020 he is editor in chief of the M&A Review, he is co-founder and chief research officer of MADiscover GmbH (www.madiscover.com), a start-up company that digitalised M&A screening. Furthermore, he is a board member of the German M&A Association. In 2022 he received the Medal for Research from the British Academy of Management. M&A REVIEW UK 1/2026 • Volume 1 3030

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REPORT • POINT OF VIEW Where Intellect Meets Capital: Why the M&A Ecosystem Needs the Symbiosis of Academia and Practice Jan Pörschmann, atares 1. Introduction M&A is often reduced to the technical: data rooms, valu- ations, contract negotiations and tax structuring. Yet any- one who sees M&A in those terms is missing the point. For me, M&A is the supreme discipline of strategic manage- ment. It is not merely a transactional process but the most powerful instrument we have for shaping growth, rewir- ing entire industries and actively shaping the future: To ensure freedom, peace, equality and sustainability. We live in an era in which seemingly limitless sources of capi- tal meet disruptive technological innovation. That places an enormous responsibility on us. But, above all, it hands us a historic opportunity to shape what comes next. We can use M&A to scale the technologies that make the world lastingly better for humanity. But to unlock that vast potential, the sheer market routine of day-to-day practice is not enough. We need the precise foundations that academia provides. 2. The BMA Ecosystem: Where Theory Meets “Deal Design” At the German M&A Association (Bundesverband Merg- ers & Acquisitions, BMA), we have made it our mission to keep developing the M&A ecosystem and to connect it internationally. That can only succeed if we finally tear down the silos that separate academic excellence from entrepreneurial practice. Working with universities – as the superb example of the University of Bristol shows – brings an indispensable energy to our association: Academia provides the navigation system: with analytical rigour and empirical evidence, it takes the long view on lasting trends. It questions established patterns, validates the success factors behind transactions and gives us the methodological depth to stay oriented amid the fog of transformation. Entrepreneurship provides the fuel: we bring the pace of the market, an instinct for what is achievable, operational reality and the art of creative “deal design”. When these two worlds meet, genuine innovative power emerges. Academia protects us practitioners from col- lective tunnel vision; entrepreneurship ensures that excellent academic research does not gather dust in the archives but makes a real impact on the stage of the global economy. 3131 M&A REVIEW UK 1/2026 • Volume 1

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3. What It Means to Me: The Spark in the Dialogue Why am I personally so passionate about this exchange? Because the friction between theory and practice keeps me intellectually alive. Talking to bright minds from aca- demia forces me to question my own day-to-day deci- sions again and again. It is no longer enough to do deals the way they were done ten years ago. The transfor- mation driven by AI, automation and new global capital flows demands a constant “rewiring” of the way we think. Engaging with the academic world sharpens our eye for the bigger picture. It reminds us that with every tech deal, every “buy-and-grow” strategy and every consoli- dation, we are helping to write the rules of the game for tomorrow. My warmest congratulations to M&A REVIEW UK on its inaugural issue. That this launch is taking place at the Uni- versity of Bristol is no coincidence but a powerful signal: REPORT • POINT OF VIEW the future of the M&A ecosystem will be written wher- ever bright minds come together across borders and dis- ciplines to bring intellect and capital together. Let’s make it work! Jan Pörschmann is the Managing Partner and Co-Founder of atares, a prominent Munich-based M&A boutique and investment bank specializing in technology-driven transactions. With over 25 years of entrepreneurial experience, Jan acts as a „Deal Designer,“ advising software and tech companies on strategic „Buy & Grow“ initiatives and cross-border mid-market transactions. As the Chairman of the Board of the Bundesverband Mergers & Acquisitions (German M&A Association), he is a leading voice in shaping the M&A ecosystem, championing the integration of academic research with corporate practice. He is also the Founder of the Global Tech Mergers Group, an international network dedicated to bridging global capital with disruptive technological innovations to drive sustainable growth. AD

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REPORT • BRISTOL M&A SOCIETY The London Discount: Five Deals Defining UK M&A in 2025–2026 Erik Pavlovskyy, Gwen Sargent, Charlotte Bryce, Jai Chauhan, Jeevan Johal & Arjun Sandhu Erik Pavlovskyy, Gwen Sargent, Charlotte Bryce, Jai Chauhan, Jeevan Johal & Arjun Sandhu Recently, the UK markets have been seen as undervalued, and the world has begun to notice. The defining theme in UK M&A was foreign appetite with deal values rising even as the number of transactions fell, because overseas buy- ers paid heavily for the few assets they wanted. The clea- rest case was Qualcomm‘s £1.8bn acquisition of British chip designer Alphawave, whose high speed connectivity tech- nology is vital for AI data centres yet was priced in London well below what a US buyer would pay for it. The pattern now repeats across the market, with American acquirers paying GBP prices that still look like a discount once conver- ted into dollars. This can be explained structurally. UK companies trade at a discount because the domestic investors who once suppor- ted them have largely gone. British pension funds now hold barely 4% of their money in UK equities, far below the level of a generation ago, so prices have little holding them up. That discount is what keeps drawing bidders. Recently a US rival tabled a £2.7bn offer for the British food ingredients group Tate and Lyle, and its shares jumped 45% on the news, a sign of how far below fair value it had been sitting. M&A has now become the main way companies leave the London market. However, 2026 has better signs for M&A activity. With infla- tion falling back towards target and rates coming down, the cost of financing a deal is now lower. Reformed listing rules are also meant to make London easier to float in. In our opinion, the rebound is genuine but fragile. Until London fixes why its own companies trade so cheaply, that discount will keep inviting bidders, and Britain stays a target rather than a base. actions in recent years and reflects the growing strategic importance of electricity networks as countries accelerate electrification and decarbonisation efforts. UKPN opera- tes around 192,000km of power lines, distributes roughly 71TWh of electricity annually, and serves 8.5 million custo- mers across London, the South East and East of England. Strategically, the acquisition gives ENGIE large scale in one of Europe‘s most attractive regulated energy mar- kets. Rather than building a presence from scratch, ENGIE gains ownership of a major infrastructural piece that will be central to the UK‘s net-zero transition. Politically, the transaction highlights Britain‘s continued willingness to allow foreign ownership of strategic infrastructure assets. While some may question another major UK asset being acquired by an overseas buyer, the government‘s ambi- tious decarbonisation targets require substantial private investment, making foreign capital increasingly important. Financially, the deal provides ENGIE with stable, regulated and inflation-linked revenues, improving the group‘s risk profile and reducing its reliance on volatile energy mar- kets. The company plans to finance the acquisition through debt, equity issuance and asset disposals, demonstrating its confidence in the long-term returns available from elec- tricity networks. In our view, the acquisition makes strong strategic and financial sense. Demand for electricity is expected to rise significantly as EV adoption, and renewable generation expand. The deal also demonstrates how ownership of energy infrastructure is becoming one of the most valua- ble themes in global investing. ENGIE / UK Power Networks In February 2026, French utility giant ENGIE agreed to acquire UK Power Networks (UKPN), the UK‘s largest elec- tricity distribution operator, for an equity value of £10.5bn and an enterprise value of approximately £15.8bn. The deal represents one of the largest UK infrastructure trans- Also in February of this year, US-based asset manager Nuveen agreed to acquire the 222-year-old British firm Schroders in a £9.9bn deal, creating one of the world‘s largest active asset managers with nearly $2.5 trillion in Nuveen / Schroders 3333 M&A REVIEW UK 1/2026 • Volume 1

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AUM. This transaction signals the growing pressure on asset managers to consolidate or be left behind. The combination of rising fee pressure, the continued shift to passive investing, and increasing demand for private market solutions is forcing firms to seek scale or risk irre- levance. Strategically, the deal expands Nuveen‘s geographical reach while strengthening its capabilities, particularly in infrastructure and private credit, where client demand has grown fastest. Schroders Capital and Hargreaves Lans- down have already partnered to offer UK retail investors access to high-growth private market investments. This gives Nuveen an established institutional investment busi- ness and an early foothold in retail private markets dis- tribution. Financially, it offers revenue synergies through cross-selling across a global client base, alongside cost synergies from consolidating overlapping back-office and infrastructure functions. The deal also reflects a broader structural shift in capital away from London, with this being another case of a US acquirer absorbing a British institution. More broadly, it is a clear marker of where the active management industry is heading. Mid-scale firms like Schroders are caught in the middle: too large to be niche, yet too small to match the giants. This acquisition makes sense but it might also sig- nal some deeper concerns for London and the wider asset manager industry. Zurich / Beazley Following months of protracted negotiations, Zurich Insu- rance Group secured its £8.1bn all-cash acquisition of London-based specialist insurer Beazley in March 2026. The breakthrough came after Beazley declined multiple bids throughout 2025, finally coming to an agreement with enhanced terms. In an industry where specialised underwriting, vast data access and deep client relation- ships are critical, this transaction adds to Zurich‘s compe- titive edge whilst also restricting rivals‘ expansion oppor- tunities. By absorbing Beazley, Zurich accelerates its specialty insurance strategy. Beazley brings unmatched depth in cyber insurance, a top-tier position in the US Excess and Surplus (E&S) lines and a presence within the Lloyd‘s of London market. The strategic logic for Zurich is in con- necting Beazley‘s niche underwriting expertise and data capabilities with its own massive global balance sheet and distribution network, allowing the combination to tackle an increasingly complex and interconnected risk landscape. Synergies are expected to come through reinsurance optimisation, cross-selling products across a broader client base and cost savings through economies of scale in technology, compliance and distribution. REPORT • BRISTOL M&A SOCIETY Beazley‘s sale marks yet another prominent UK financial institution being acquired by a foreign buyer. While Zurich has committed to keeping the combined specialty busi- ness headquartered in London and retaining the Beazley brand, this acquisition continues to fuel concerns about the long-term independence and centre-of-gravity of the London market. The deal is entirely rational as Zurich gets a world-class cyber underwriter, a Lloyd‘s platform and a data-rich company which would have taken years to build alone. For Beazley it was a great deal since it preserved its leadership and brand with the board having the discipline to reject early offers till their price was met. Ingredion / Tate & Lyle After a challenging five years, Tate & Lyle‘s future looks con- siderably sweeter. In May, shares in the ingredients group jumped more than 45% after US-listed Ingredion announced a £2.7bn takeover bid. While the transaction would create one of the largest global ingredients groups and increase Ingredion‘s geographic reach, the strategic rationale appe- ars to be less about scale than combined capabilities. The food and beverage industry is undergoing a structu- ral shift toward healthier, higher-protein, higher-fibre, and lower-sugar products, without compromise on taste, text- ure or convenience. This trend is reinforced by adoption of GLP-1 medications. Food manufacturers are responding by reformulating products, accelerating demand for innova- tive ingredients that can meet multiple nutrition require- ments simultaneously. Despite weaker discretionary spending amid cost-of-living pressures, health and wellness remains a resilient category in food and beverages. Consumers are often willing to pay a premium for products offering nutritional benefits. As a result, growth is increasingly driven by higher-priced and higher-margin products rather than sales volume. Tate & Lyle is well-positioned to capitalise on this shift, having recently undergone a significant strategic pivot from primarily sweeteners into a broader range of higher- margin speciality ingredients. In particular, its 2024 acquisi- tion of CP Kelco expanded its capabilities to include pectin, gums, and other texture and stabilisation techniques. Ingredion brings complementary strengths in clean- label ingredients, texturants and plant-based proteins. The combination of groups would enhance their product portfolio and accelerate product development in higher- growth categories. Notably, Ingredion‘s offer is the first public approach but not the first private approach. This suggests Ingredion has viewed Tate & Lyle as an attractive target for some time, but the current market conditions present an ideal oppor- M&A REVIEW UK 1/2026 • Volume 1 3434

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REPORT • BRISTOL M&A SOCIETY tunity. Other recent events also reflect this trend, including Nexture‘s acquisition of Frulact, and Nestlé repositioning itself into health and wellness through multiple acquisitions, and Kraft Heinz restructuring to better target health-con- scious customers in a separate company. Looking ahead, the ingredients sector is likely to see sustained M&A acti- vity as companies reposition toward health and wellness. Sony / STATSports In October last year, Japanese technology and entertain- ment giant Sony acquired a majority stake in STATSports, the Northern Irish athlete-tracking firm founded in 2008, in a deal whose terms were left undisclosed. The acquisi- tion folds one of Britain‘s leading sports-technology inno- vators into Sony‘s growing sports data division, signalling the accelerating convergence of technology, sport and entertainment. STATSports is best known for its GPS wearable systems, which capture more than 70 real-time performance metrics and are trusted by over 800 elite organisations, including Arsenal, Liverpool, PSG, the England national team and the All Blacks. For Sony, the appeal is strategic rather than purely financial. The deal slots neatly alongside its existing assets like Hawk-Eye‘s optical tracking, KinaTrax‘s biomechanics and Beyond Sports‘ visualisation, letting it pair wearable data with camera-based systems to build what manage- ment has called the „ultimate sports data and analytics engine.“ The prize is a single, integrated platform spanning performance analysis, officiating and fan engagement. Strategically, this gives Sony a defensible foothold in a fast- growing market and a wealth of proprietary athlete data; AD for STATSports, it brings the global distribution and R&D firepower needed to scale at pace. However, the deal also fits a now-familiar pattern: another homegrown British firm being purchased by an overseas acquirer. STATSports built a world-leading product out of Northern Ireland, only to be scaled under foreign owner- ship rather than as a domestic firm. The commercial logic is sound, but it asks the same questions of the UK: whether it can retain and grow its best technology businesses, or simply create them for others. Outlook The five deals covered in this edition trace a single arc. Regardless of the industry, the story is the same. World- class British businesses attracting serious overseas capital at prices that still look cheap to foreign buyers. The structural cause is well understood. British pension funds have largely withdrawn from domestic equities, removing the long-term holders that once supported valuations. Until that capital returns, the discount will per- sist, and so will the bids. 2026 is a better environment than the years prior. Rates are falling, financing is cheaper, and listing rules have been reformed. In our opinion, that is enough to sustain a rebound in activity, but not enough to fix the underlying issue. A market that loses its best companies at a discount is not recovering. Britain, for now, remains a target.

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Sharing Excellence – Stimulate Exchange Make Better Deals Stefan Schneider, M&A Media Services GmbH (mandaco) On 8 October 2025, around 200 guests from business, academia, advisory and politics gathered in Berlin for the M&A Award Night, hosted by the German M&A Associa- tion and M&A REVIEW. Organised by mandaco and held at the TIPI by the Chancellery, the evening brought together the German M&A community to recognise transactions, Around 200 guests from business, academia, advisory and politics gathered at the TIPI by the Chancellery in Berlin for the M&A Award Night hosted by the German M&A Association and M&A REVIEW. REPORT • AWARD advisers and entrepreneurs whose work demonstrates how dealmaking can contribute to innovation, transforma- tion and long-term value creation. The event showed that M&A is far more than a technical transaction discipline. It is one of the central instruments through which companies reshape portfolios, access capabilities, accelerate innovation and respond to stra- tegic change. This message was underlined by Federal Minister Dorothee Bär, who emphasised the importance of bringing talent, ideas and technologies together if econ- omies are to remain innovative and competitive. In this sense, M&A is not only about ownership change; it is also a mechanism through which ideas, technologies and capa- bilities move across organisational boundaries. In his opening remarks, Jan Pörschmann, Chairman of the German M&A Association, placed the evening in the wider context of structural transformation. Markets are changing faster, technological disruption is accelerating, and compa- nies are under pressure to adapt in shorter strategic cycles. Against this backdrop, M&A becomes a leadership chal- lenge that brings together strategy, financing, legal structur- ing, tax, culture and integration. It is therefore not surprising that outstanding dealmaking requires more than transaction execution. It requires judgement, responsibility and the abil- ity to translate strategic intent into post-deal value creation. A distinctive feature of the Awards is their assessment approach. The Advisory Awards are based on a scien- tific model developed in collaboration with the University of Bristol, combining qualitative dimensions such as cli- ent orientation and advisory approach with quantitative transaction outcomes. This creates a more rounded view of advisory excellence and moves the discussion beyond deal volume alone. In 2025, winners included Schalast and Taylor Wessing in Legal Advisory, KPMG Germany in Trans- action Advisory and RSM Ebner Stolz in M&A Advisory, with Benchmark International also recognised. M&A REVIEW UK 1/2026 • Volume 1 3636

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REPORT • AWARD Top: The BMA board with Federal Minister Dorothee Bär at the M&A Award Night in Berlin. Left: Max H.-H. Schaber, founder and long-serving CEO of DATAGROUP, received the Lifetime Achievement Award for his entrepreneurial pio- neering spirit and responsible approach to growth. The UK launch also creates an opportunity for corporates, private equity investors, advisers and entrepreneurs to help shape a new conversation about M&A excellence. What does responsible dealmaking look like in the UK con- text? How do companies create sustainable value through acquisitions? Which advisory practices genuinely improve transaction quality? And how can evidence, experience and judgement be brought together more effectively? The M&A Awards in Bristol will provide a platform to explore these questions — and to celebrate the people and organi- sations that are answering them through their work. We invite UK corporates, investors and advisers to con- tribute to the inaugural edition and help establish a new benchmark for M&A excellence in the UK. Stefan Schneider is Managing Director of M&A Media Services GmbH (mandaco) and head of the office of the German M&A Association (BMA). With mandaco, he is building a European M&A ecosystem that connects content, community, events, learning and academic research — including the new Bristol University M&A Observatory and M&A REVIEW UK. The M&A Award — presented for trans- actions, advisory work and entrepreneurship that set new stan- dards in dealmaking. The Corporate Awards highlighted the breadth of M&A as a strategic instrument. Recognised transactions included deals involving Körber, Jungheinrich, sennder, Deutsche Bahn, TRUMPF & Q.ANT, Polifarma and AL-KO. What con- nected these cases was not size alone, but the quality of the underlying strategic logic, the relevance of the transaction for transformation and growth, and the ability to manage complexity responsibly. The Lifetime Achievement Award, presented to Max H.-H. Schaber, founder and long-serving CEO of DATAGROUP, further emphasised the entrepre- neurial dimension of M&A: growth through acquisitions can be highly successful when it is built on trust, fairness, disci- pline and a clear understanding of value creation. After four successful years in Germany, the next step is Bristol. In 2027, the M&A Awards will make their UK debut at the University of Bristol. The ambition is not simply to replicate an established German format, but to build a dedicated UK platform that reflects the specific character, strengths and challenges of the UK M&A market. The inaugural UK edition will be closely connected to the University of Bristol M&A Observatory and M&A REVIEW UK, combining prac- titioner insight with evidence-based assessment and aca- demic independence. This Bristol-based approach will place particular emphasis on what sits behind successful transactions: strategic clar- ity, quality of judgement, execution discipline, integration logic and long-term value creation. Financial outcomes matter, but they do not tell the full story. The UK M&A Awards will therefore seek to recognise not only com- pleted deals, but the managerial and advisory capabilities that make high-impact dealmaking possible. For the University of Bristol M&A Observatory, the Awards form part of a wider mission: to connect research, mar- ket intelligence and practitioner exchange in a way that strengthens the UK M&A ecosystem. Bristol offers a dis- tinctive setting for this ambition. As a leading university with a growing profile in strategy, corporate transforma- tion and M&A research, it can provide an institutional home for an awards format that is rigorous, practice-facing and outward-looking. 3737 M&A REVIEW UK 1/2026 • Volume 1

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