LONDON (Reuters) - British companies' spending on takeovers of foreign businesses fell to its lowest in nearly five years during the three months to June, as Brexit worries appeared to weigh on firms' appetite to make big investments, official figures showed on Tuesday.
British-based businesses spent 1.92 billion pounds ($2.46 billion) on acquiring foreign companies, the smallest amount since the third quarter of 2013 and down sharply from a 17-year high of 51.77 billion pounds in the third quarter of 2017.
The Office for National Statistics (ONS) highlighted that in May the Bank of England said firms' investment intentions were modest during the second quarter of 2018, due partly to concerns about Britain's departure from the European Union in 2019.
Merger and acquisition activity in 2017 was unusually high, and included British American Tobacco's purchase of U.S. cigarette-maker Reynolds American (NYSE:RAI) in the third quarter.
The value of foreign takeovers of British companies dropped to 6.50 billion pounds from 22.32 billion pounds in the previous quarter, when foreign purchases of gambling group Ladbrokes (LON:LCL) Coral and payments company Worldpay were completed.
A weaker pound - which has declined in value since the Brexit referendum decision in June 2016 - makes British companies cheaper for foreign buyers and increases the cost of overseas takeovers for British firms.
Nonetheless, the latest figures are well below the average seen since the financial crisis.
Quarterly data on the value of takeovers is often volatile and often lags actual activity as it is calculated when transactions complete.
The fall in the scale of mergers and acquisitions came despite a sharp rise in the absolute number of takeovers recorded, which the ONS attributed to improved data collection methods rather than an underlying change.
($1 = 0.7795 pounds)