Why are more mid-sized businesses using mergers and acquisitions to grow?
56% of mid-sized UK businesses are exploring or have recently completed a merger. Discover why mergers and acquisitions (M&A) is becoming an increasingly important growth strategy and the barriers businesses still face.
M&A is no longer reserved for large corporations. Shawbrook research shows that 56% of UK mid-sized businesses are either exploring or have recently completed a merger, highlighting how acquisitions are becoming an increasingly important strategy for growth.
As businesses look to scale, enter new markets and build resilience, M&A is becoming a key part of many growth strategies. Explore the full findings in the Shawbrook M Agenda Report.
Why are businesses pursuing M&A?
For many mid-sized businesses, M&A is no longer simply an opportunity that arises at the right time. Increasingly, it is a deliberate strategy to accelerate growth, strengthen capabilities and respond to changing market conditions.
Among businesses currently pursuing or interested in M&A:
- Accelerating growth (30%)
- Meeting increasing demand (30%)
- Entering new markets or accessing additional expertise (26%)
The findings suggest that ambitious mid-sized businesses are increasingly using acquisitions to grow faster, diversify and strengthen their competitive position.
What's holding businesses back?
Despite growing appetite, many businesses still face significant barriers when considering acquisitions.
The biggest challenges include:
- Managing legal and due diligence processes (19%)
- Finding the right advisers to support the transaction (19%)
- Identifying a suitable acquisition partner (17%)
The research suggests that successful acquisitions require more than funding alone. Many businesses also need specialist advice, experience and support to navigate increasingly complex transactions.
Where is M&A activity highest?
The research shows that M&A activity varies significantly between sectors.
Businesses currently most active in the M&A market include:
- Sales, Media & Marketing (65%)
- Finance (64%)
- Manufacturing & Utilities
By comparison, HR businesses report the lowest future deal pipeline. However, they are the most likely to have recently completed a merger, with nearly one in five (19%) reporting a completed transaction.
This variation highlights how acquisition strategies differ across sectors depending on growth ambitions, market conditions and commercial priorities.
What does this mean for growing businesses?
As M&A becomes a more common route to growth, businesses increasingly need funding partners who understand the pace and complexity of acquisitions.
Successful transactions often require:
- Flexible acquisition finance structures that support acquisition strategies
- Specialist expertise throughout the deal process
- Fast, informed decision-making to keep transactions moving
Neil Rudge, Chief Banking Officer at Shawbrook, said:
"M&A has become an increasingly important growth strategy for medium-sized businesses, particularly as firms look to scale, enter new markets and build resilience in a more competitive environment.
What our research highlights is that ambition within the 'critical middle' is strong, but these businesses often require more tailored funding structures and specialist expertise as transactions become more complex.
This is where specialist lenders can play an important role, supporting businesses with the flexibility, pace and strategic understanding needed to help turn growth ambitions into reality and ensure ambitious medium-sized firms are not held back at a critical stage of growth."
Why does this matter?
Mid-sized businesses are playing an increasingly important role in driving UK economic growth, and M&A is becoming a key way for many of them to scale.
However, the research shows that ambition alone is not enough. Access to specialist funding, experienced advisers and lenders who understand the demands of acquisitive growth can make the difference between a successful transaction and a missed opportunity.
Discover the latest research on the ambitions, opportunities and challenges facing UK mid-sized businesses, or explore how our acquisition finance solutions can support your growth plans.
Methodology
Research was conducted by Censuswide on behalf of Shawbrook between 15–27 October 2025. The survey included 1,000 funding decision-makers at UK mid-sized businesses (50–249 employees with annual turnover of £5M–£100M).
This research underpins the findings in Shawbrook's M Agenda Report.
Article Author
For more articles from Neil, explore their author profile.
Neil Rudge – Chief Banking Officer
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