Restaurant takeover deals rise 88% in past year

The number of takeover deals targeting UK restaurant groups has soared by 88% in the past year, according to analysis by law firm TWM Solicitors. 

It found that the sector witnessed 30 deals in 2024/25, up from 16 in 2023/24, due to a combination of lower interest rates, rising investor confidence, and falling commercial rents, all of which “created a favourable environment” for mergers and acquisitions in the restaurant sector.  

The surge in M&A activity comes despite ongoing challenges to the sector, including the rising employer National Insurance Contributions (NICs).

Despite this, falling commercial rents in traditionally expensive areas, such as central London, made acquisitions of restaurants more attractive to buyers. The law firm also noted that declining equipment costs, which peaked during the pandemic, have made acquisitions “more attractive”. 

It added that many restaurant groups undertook “comprehensive” post-Covid restructuring, including closing loss-making sites and streamlining menus, which has left them “leaner and more profitable”. 

David Powell, partner and head of the Corporate and Commercial team at TWM Solicitors, said: “The near doubling of takeover deals is a strong vote of confidence in the UK restaurant sector. We’re seeing a wave of consolidation, particularly at the lower end of the market, as buyers move quickly to acquire competitively priced businesses.

“Many of these restaurant groups are high quality businesses with healthy margins. Buyers are spotting opportunities to acquire potentially undervalued businesses that can be scaled with the right investment. With footfall steadily improving post-pandemic, brick-and-mortar restaurants are once again seen as attractive investments.” 

He added: “For some buyers, consolidation also brings the operational benefits of spreading payroll and overheads across a larger portfolio.”