19th October 2026
The number of companies leaving London's stock market continues to exceed the number joining it. With foreign buyers and private equity firms playing an increasingly important role, should Britain be doing more to protect its long-term economic interests?
Britain has a problem that deserves more attention than it receives. Companies continue to leave the London stock market, new listings have struggled to keep pace, and takeovers are changing the ownership of businesses across the economy.
There is nothing inherently wrong with a takeover. A successful business may need new investment, a struggling company may be rescued by a stronger competitor, and shareholders may receive a good price for their shares. Mergers can also create businesses capable of competing internationally.
But when the number of companies leaving the stock market persistently exceeds the number joining it, a wider question arises. Is Britain losing an important source of investment and economic independence, and are the rules governing takeovers sufficiently concerned about the long-term consequences?
The numbers tell a worrying story
Figures published by the Financial Conduct Authority in October 2026 illustrate the imbalance.
In 2024, 69 issuers left the UK's Main Market, while only 15 new commercial companies joined the FCA's Official List. In 2025, there were 50 departures and 26 new commercial-company listings.
The position improved somewhat in 2025, but departures continued to outnumber new listings. The FCA's figures for 2026, covering the period to June, also show that the market remains an important subject for concern.
These statistics need to be interpreted carefully. A departure does not necessarily mean a company has been taken over. Some businesses move their listings overseas, others decide that the cost of remaining listed is not worthwhile, and some leave following changes in corporate structure.
Nevertheless, the underlying problem remains. Britain needs a healthy market in which growing businesses can raise money, investors can buy shares and successful companies have a reason to remain listed.
The decline of the Alternative Investment Market, or AIM, is another part of the story. AIM was established to give smaller and growing businesses access to public investment without all the requirements of the main market. Yet many smaller companies have struggled with low valuations, limited investor interest and the costs of remaining listed.
When a company believes it can obtain a better valuation by selling itself to a private buyer, it is hardly surprising that its directors consider that option.
The question is whether the overall system is encouraging enough businesses to grow through public investment rather than disappear from the market.
Source: Financial Conduct Authority, UK listings data.
Why are takeovers not examined more often?
The UK has a competition regulator, the Competition and Markets Authority (CMA), which can investigate mergers and block transactions that threaten competition.
However, the system is not designed to examine every takeover simply because it involves a large sum of money or results in a British company changing ownership.
Britain operates a largely voluntary merger notification system. Companies do not generally have to notify the CMA before a transaction, although the regulator can investigate deals that meet the relevant legal tests, including transactions that have already been completed.
The CMA uses its powers to identify mergers that could substantially lessen competition. It may be concerned, for example, if two major suppliers combine and could subsequently raise prices, reduce service quality or limit consumer choice.
That is an important responsibility. But the disappearance of a company from the London Stock Exchange does not, by itself, establish a competition problem.
A British business could be bought by an overseas company while continuing to employ the same people, manufacture the same products and serve the same customers. The takeover might even provide the investment needed to secure its future.
Conversely, a takeover might weaken Britain's long-term industrial capacity without immediately reducing competition or increasing prices.
This exposes a difference between protecting consumers in today's market and protecting the country's ability to develop successful businesses over the next decade.
What happens when private equity takes over?
Private equity firms are an important part of the modern takeover market. They raise money from investors to acquire businesses, improve their performance and eventually sell them or otherwise realise their investment.
Some private equity acquisitions have helped businesses expand, modernise and become more efficient. Others have attracted criticism over debt levels, asset sales, reductions in investment and the consequences for employees.
The outcome depends on the individual transaction. It would be wrong to assume that private ownership is necessarily worse than public ownership.
However, when a publicly listed company is bought and taken into private ownership, ordinary investors can no longer buy its shares on the stock market. The business may continue to prosper, but the opportunity for the wider public to share in its future growth has disappeared.
There is also a wider question about transparency. Listed companies generally have continuing disclosure obligations, whereas privately owned businesses operate under different reporting requirements.
If Britain wants more people to invest in productive businesses, it should consider why so many companies and investors find the public markets less attractive.
Simply making takeovers more difficult would not solve that problem. Britain also needs competitive listing rules, a stronger pool of domestic investment and a tax and regulatory environment that encourages companies to remain and grow here.
Should the government look beyond immediate competition?
There is a reasonable argument for examining certain takeovers more closely where they could have significant consequences for the national economy.
Consider a British engineering company that has developed an important technology. A foreign buyer might promise to maintain existing operations, but later move research, intellectual property or production elsewhere.
There may be perfectly legitimate commercial reasons for doing so. Nevertheless, the consequences for British suppliers, skilled employment and future innovation could be substantial.
Similar concerns arise in defence, energy, advanced manufacturing, pharmaceuticals and other strategically important industries.
The government already has powers to intervene in certain transactions on public-interest or national-security grounds. The National Security and Investment Act 2021, for example, provides a framework for examining acquisitions that could threaten national security.
But national security is not the same as economic policy. A transaction can be entirely lawful and pose no security threat while still contributing to the gradual loss of important domestic capabilities.
One possible reform would be to require a more explicit assessment of the longer-term economic consequences of particularly significant acquisitions. This could include the effect on research and development, strategic supply chains, competition over time and the survival of important British industrial capabilities.
Such a system would need carefully defined criteria. Otherwise, ministers could be tempted to interfere for political reasons or protect businesses that cannot compete effectively.
Nor should every successful British business be expected to remain British-owned forever. International investment can create jobs, bring new technology and open overseas markets.
The objective should be to distinguish between beneficial investment and transactions that could seriously undermine Britain's long-term economic interests.
How do other countries approach the problem?
Britain is not alone in trying to balance open markets with the need to protect competition and strategic industries. However, other major economies use different combinations of merger control, investment screening and industrial policy.
The European Union
The European Commission examines major mergers that fall within its jurisdiction, while national competition authorities handle many smaller transactions. EU merger rules are designed to prevent deals that would significantly impede effective competition.
The EU also operates a foreign investment screening framework, through which member states examine certain investments for potential risks to security and public order. A revised EU framework was adopted in June 2026, with application due to begin in January 2028.
This is an important distinction: the EU does not automatically prevent foreign companies from buying European businesses. It provides mechanisms for examining transactions that could cause serious problems.
Germany and France
Germany and France have established national competition authorities with substantial merger-review responsibilities. Germany operates a mandatory notification system for mergers meeting specified legal thresholds, whereas the UK's system is largely voluntary.
That difference matters. Mandatory notification means that more qualifying transactions must be brought to the regulator's attention, even if most ultimately receive clearance.
It does not mean German or French authorities investigate every small business purchase, nor does it mean they block more mergers in every circumstance.
Germany also has a long-standing tradition of supporting industrial capacity and maintaining a strong manufacturing base. France has used strategic investment policies and state involvement in selected industries to protect national interests.
Both countries face the same difficult question as Britain: how to attract overseas capital without becoming too dependent on external owners for important technologies, skills and industrial capabilities.
The United States
The United States has a powerful federal competition regime involving the Federal Trade Commission and the Department of Justice. Certain transactions must be notified in advance under the Hart-Scott-Rodino system, subject to financial thresholds and exemptions.
The US also has the Committee on Foreign Investment in the United States, known as CFIUS, which examines certain foreign investments for national-security risks. In some circumstances, transactions can be restricted or required to be unwound.
American policy has also placed growing emphasis on domestic manufacturing, semiconductors, energy security and strategically important technologies.
The US system is not a simple model for Britain to copy. Its domestic market is much larger, its financial markets are deeper, and its political approach to industrial policy differs. But it demonstrates that an economy can welcome investment while retaining significant powers to scrutinise transactions that matter to national interests.
The lesson from these international examples is not that Britain should copy another country's rules wholesale. It is that competition policy, foreign investment screening and industrial strategy can work alongside one another.
Sources: UK government guidance on merger notification; European Commission investment screening.
A stronger stock market needs more than takeover controls
There is a danger that the debate becomes too narrowly focused on preventing companies from being bought.
If businesses are leaving the London market because valuations are too low, investors are reluctant to provide capital or listing costs are excessive, restricting takeovers will not address the underlying causes.
The government and regulators should therefore consider a broader package of measures.
First, Britain needs to make it easier for growing companies to raise equity finance and remain publicly listed. Second, pension funds and other long-term investors should have the opportunity to invest in British businesses where the expected returns justify the risk. Third, regulators should ensure that merger rules can identify deals that threaten future competition, not merely those that immediately increase prices.
Finally, the government should publish a clearer assessment of how changes in company ownership are affecting the country's productive capacity. That would help establish whether Britain is attracting fresh investment or gradually losing control of important parts of its economy.
The number of companies leaving the stock market is not, on its own, proof that Britain's economy is declining. Some businesses will always be better off under different ownership, and a stock exchange should not preserve weak companies simply to maintain its membership numbers.
But neither should the country assume that every takeover is beneficial simply because shareholders receive a premium for their shares.
Britain needs a system that welcomes investment, protects competition and recognises the long-term value of successful domestic businesses.
The important question is whether the present balance is right. If the number of companies leaving London's markets continues to exceed the number joining them, the government should be prepared to examine not only why businesses are departing, but also whether its approach to takeovers and investment is helping to create the stronger economy the country needs.
Sources
https://www.gov.uk/guidance/tell-the-cma-about-your-merger
Financial Conduct Authority: UK listings data — official figures on new listings and departures.
https://www.fca.org.uk/data/fca-listings-data
Competition and Markets Authority: merger notification — explains the UK's voluntary system.
https://www.gov.uk/guidance/tell-the-cma-about-your-merger
European Commission: foreign investment screening — explains the EU approach to investment risks.
https://policy.trade.ec.europa.eu/enforcement-and-protection/investment-screening_en