This note introduces a new statistical series of cash expenditure by U.K. industrial and commercial companies on the acquisition of subsidiaries, of outstanding minority interests in existing subsidiaries, and of trade investments.
Progress during the past decade in the development of financial statistics has made practicable the study of the flow of funds between the various sectors of the economy. In these sector accounts, however, there have remained very large unexplained differences between, on the one hand, the financial surpluses or deficits of persons and of industrial and commercial companies emerging from national income data and, on the other hand, the separately compiled net totals of these sectors' identified financial transactionsJl) Both the national income and the financial statistics are subject to error, but the difference between them has pointed consistently to an understatement both of companies' spending on financial assets and of persons' receipts from sales of such assets. Part of this understatement has been attributable to the lack of satisfactory estimates of the flow of cash from companies to the personal and other sectors in connection with take-overs and similar deals.
Company acquisitions