Around 44 per cent of all merger and acquisition deals targeting UK-listed companies have been backed by overseas bidders, according to City law firm Wedlake Bell.
The proportion rose to 53 per cent in the first quarter of this year, nearly double the 27 per cent of deals thatinvolved foreign backers in
the first three months of 2008.
Tim Bird, partner and head of the corporate team at Wedlake Bell, said: "There is a very definite pattern emerging here, which is that more and more foreign companies see the UK as a good place to invest. And the quickest way is to acquire companies.
"The return to growth of the UK economy is boosting the confidence of overseas investors who clearly view the long term prospects of the UK economy to be very good."
The group said foreign companies were taking advantage of the favourable bid conditions in the UK, such as the weak pound and the robust system of regulation.
Mr Bird said: "The legal system in place to facilitate corporate takeover activity is well established and extremely competitive.
"Backing that up is a regulatory system that is transparent, robust and recognises the interests of both bidder and target in a takeover.
"The current relative weakness of sterling also means UK listed companies appear to represent much better value to overseas investors."
The group said the US remained the main source of overseas bid for UK-listed firms, accounting for 30 per cent of bids in the past two years.