What UK Companies Need to Know Before Acquiring a U.S. Business

As it stands today, in just six months, the UK’s pound sterling has increased more than 10% against the U.S. dollar. This makes now an exceptionally advantageous time for UK companies to invest in the United States. For those exploring cross-border mergers and acquisitions, this favourable exchange rate creates a window of opportunity to acquire American businesses at a relative discount.

Cross-border m and a transactions can deliver major strategic value—from market expansion and asset acquisition to customer growth and competitive advantage. However, deals involving U.S. companies bring legal, tax, and regulatory complexities that can derail transactions or lead to costly mistakes if not managed correctly.

In this article, we break down the key considerations for UK buyers planning to acquire businesses in the U.S. and how to approach each phase of the M&A process.

Why the Exchange Rate Shift Matters

The surge in the value of the pound has increased the purchasing power of UK businesses abroad. For companies sitting on capital or private equity firms with UK-based investors, this can equate to significant savings when acquiring assets priced in U.S. dollars. An acquisition worth $10 million six months ago would now cost considerably less in GBP, purely due to currency movement.

This shift also improves internal rate of return (IRR) calculations and deal attractiveness when presenting to boards or investment committees. It’s not just about value—it’s about making strategic moves when market conditions offer an edge.

Start with Clear Strategic Objectives

What do you want to achieve with the acquisition? Entering a new market? Acquiring intellectual property? Gaining a customer base or logistics footprint?

The U.S. is a vast and diverse market. Understanding what success looks like will help determine:

The right target company profile
The best state or region to focus on
The most appropriate deal structure

This initial clarity informs the rest of the process—from sourcing targets to conducting due diligence.

Understand the U.S. Regulatory Environment

Unlike the UK, where national regulation dominates, the U.S. legal system divides power between federal and state jurisdictions. Depending on the sector and state of incorporation, regulatory oversight may differ significantly.

A M&A advisor with U.S. experience can guide you on:

State corporate laws
Employment laws (which vary state by state)
Industry-specific regulations (e.g., healthcare, fintech, defence)

If you’re acquiring a company involved in regulated activities, early legal and compliance checks are essential to avoid closing delays.

Due Diligence: A Different Game

U.S. due diligence norms are more expansive and litigation-sensitive than in the UK. Buyers are expected to conduct thorough investigations across:

Financial performance and forecasts
Tax liabilities and filings
Intellectual property ownership and registrations
Commercial contracts and customer obligations
Employee and HR compliance

The concept of “buyer beware” runs deep. Courts may not be sympathetic to buyers who failed to uncover red flags if they had the opportunity.

That’s why mergers acquisitions due diligence is often more document-heavy, involving detailed disclosure schedules and extensive representations and warranties.

Tax Planning is Critical

UK buyers must assess:

Whether the U.S. target is a C-Corp, S-Corp, or LLC
Potential exposure to U.S. federal and state taxes post-acquisition
How repatriated profits will be taxed in the UK
The application of the UK-U.S. double tax treaty

This area requires coordination between legal and accounting professionals, ideally with experience in cross-border M&A tax structuring.

Structuring the Deal

Asset purchase or stock purchase? Each route has implications for liability, tax, and ease of execution.

For example:

Asset purchases may allow buyers to avoid assuming unknown liabilities
Stock purchases can preserve contracts and licences but may come with more risk

The structure should reflect the commercial goals of the buyer and the risk profile of the target.

How Abrams Law Can Help

At Abrams Law, we help UK and European businesses acquire U.S. companies with confidence. Our cross-border m and a advisor services include:

Target identification and pre-LOI legal input
Regulatory and commercial risk assessment
Coordination of mergers acquisitions due diligence
Drafting and negotiating U.S. deal documents
Managing post-closing compliance

With dual-qualified U.S. Attorneys and UK solicitors, we act as your legal bridge to the U.S. market.

Do you need legal help? Get in touch now!

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Jonathan Abrams

Jonathan’s practice focuses on representing UK, US and international clients in corporate transactions and private commercial matters, including Mergers and Acquisitions, corporate finance, joint ventures, recapitalizations and venture capital investments.