For all traders, especially those located in the UK, it is essential to have a basic knowledge of the largest companies based here. These companies have widely reached impacts within and beyond the UK’s borders. Traders can use knowledge of their operations to better understand the markets and create opportunities for themselves.
Our definition of ‘largest’ companies
There is not one simple way to define how large a company is, however, the most common measure and the one we will use is market capitalization. This is calculated by multiplying a company’s number of outstanding shares by the company’s share price, giving the market value of a publicly traded company’s outstanding shares. This value provides traders with information on the public’s valuation of a company in the market, helping them to make key decisions easier.
10 Largest UK Companies
|Rank||Company||Market Capitalisation ($billions)*|
|9||British American Tobacco||90|
*According to CompaniesMarketCap.com, as of 23/09/2022
Some of these companies will be easily recognizable to the average consumer, whereas others will not be so well known. As a trader, they will all be relevant to us, having large impacts on their industries and the markets. These UK companies are far from the size of some of the US giants, but there are still five with a market capitalization of over $100 billion. As these are UK companies, they will all be listed on the London Stock Exchange and part of the FTSE100, which tracks the largest 100 UK stocks.
1. Shell (SHEL)
A recent riser to becoming UK’s largest company by market capitalization, Shell is also the 43rd largest company in the world. Shell has seen a huge rise in its value, with it increasing by over 111% since the end of 2021, when it was valued at just under $90 billion. This increase was mainly down to Shell combining its two shares (A and B) in January 2022 from their Dutch and British operations in an effort to ‘simplify’ the company.
Shell was formed in 1907 through the merger of Dutch and British petroleum and transport companies. By 1920 it had become the largest producer of oil in the world and has continued to thrive, being the second largest investor-owned oil company in the world, behind only ExxonMobil. The company is active worldwide in over 140 countries and has over 44,000 service stations.
Over the last few decades, gas has become increasingly significant to Shell’s business, resulting in the 2016 acquisition of the BG group. The Shell company is also the owner of multiple other brands such as Pennsoil, Quaker State and Jiffey Lube. The company benefits from its vertical integration, being active in all parts of the oil and gas industry, from exploration to transport to trading. The growth of the company has made it the world’s ninth largest corporate producer of greenhouse gasses from 1988-2015 and the owner of the second largest headquarters in Europe, behind Volkswagen.
2. AstraZeneca (AZN)
Falling just shy of being the UK’s largest company is AstraZeneca. They are one of the largest multinational pharmaceutical and biotechnology companies in the world, with their headquarters located in Cambridge, England. They were formed in 1999 through the merger of Swedish and English pharmaceutical companies and have continued to grow since. This growth has been helped by their multiple acquisitions, for example, Cambridge Antibody Technology and Spirogen.
Being a pharmaceutical company, AstraZeneca has a massive outlay on R&D, with three main centres located in the UK, Sweden and the USA, facilitating the $6-9 billion yearly spend. Over the last few years, AstraZeneca has become more relevant to the average person, with its role in helping develop and distribute the COVID-19 vaccine.
3. Linde (LIN)
Originally two separate companies founded in Germany and the US over a century ago, Linde is a chemical company formed by the merger of these two companies in 2018. The resulting company, Linde plc, was incorporated in Ireland, with its headquarters being located in Guilford, England.
Linde serves its customers in multiple different areas ranging from healthcare and petroleum refining to fibreoptics, chemicals and many more. Despite this, Linde’s core business is still processing plants that extract or produce gas, being the global leader in industrial gas production. It manufactures and distributes many gasses that include oxygen, nitrogen, helium and many more.
In recent years Linde has moved towards sustainable energy and transport, being a member of the Hydrogen Council, which invests in hydrogen vehicles. Over the next few decades, Linde expects these vehicles to compete with electric vehicles. They appear to be in a good position to make this happen, being the global leader in the production, processing, storage and distribution of hydrogen, helped by their investment in wind-powered plants that convert water to hydrogen.
4. HSBC (HSBA)
The fourth place on our list goes to the British multinational investment bank and financial services institution HSBC. Its headquarters are located in the UK, but it does have a subsidiary located in the USA while performing its operations in 63 countries. It is the largest bank not only in the UK but in Europe in terms of total assets as of December 2021. This is reflected by its over 40 million customers and 219,000 employees worldwide.
HSBC aligns its business into three specific groups – wealth and personal banking, commercial banking, and global banking and markets. In each of these areas, it serves different types of customers, ranging in scale and background, from average individuals to large companies. HSBC has multiple large shareholders, many of which are global investment institutions, such as J.P. Morgan Securities, Renaissance Technologies and Dimensional Fund Advisors.
Over the years, HSBC has found itself amidst multiple controversies, for which it has been fined multiple times. These include several accounts of money laundering and the setup of large-scale tax avoidance schemes.
5. Unilever (ULVR)
Number five on our list is the consumer goods holding company Unilever. They produce many different types of consumer products, ranging from beauty products and personal care items to food, condiments and many more. These products are sold worldwide in over 190 countries and are differentiated by the 400-plus brands that Unilever owns. The most famous of these brands include Dove, Lynx/Axe, Ben & Jerry’s, Magnum, Sunsilk, Hellman’s and many more. Unilever relies on these recognisable brands as a strategy to sell its products. This leaves it in competition with other large, diverse companies such as Johnson and Johnson and Nestle.
Unilever was founded in 1929 through the merger of a soap and margarine company, and it is still the largest soap producer in the world today. Over the following decades, Unilever would diversify its product lines and acquire multiple companies in an effort to expand. In the last ten years, the company has put more of a focus on its beauty and healthcare product lines, as opposed to the slow-growing food brands.
6. BP (BP.)
Formerly the British Petroleum Company, BP is an oil and gas company whose headquarters are located in the UK. It is the world’s fourth largest oil company in terms of revenue as of 2020, but the company’s market cap has seen a significant decrease over the last 15 years. Much like Shell, it is one of the world’s seven oil and gas ‘supermajors’ and is also vertically integrated, operating in all areas of the oil and gas industry.
Originally founded as the Anglo-Persian Oil Company in 1908, BP has gone through multiple acquisitions and name changes over the last century to become the global company it is today.
BP is responsible for the production of 1.53% of global industrial gas emissions and has faced its fair share of controversies, the most significant being the 2010 Deepwater Horizon oil spill which was the largest oil spill accident in history. There were severe environmental and economic consequences, costing BP over $65 billion.
7. Diageo (DGE)
The seventh place on our list goes to Diageo, which is a multinational alcoholic beverage company whose headquarters is in London. Operating 132 sites worldwide, Diageo was formerly the world’s largest distiller until 2017, when it was overtaken by Kweichow Moutai of China.
The company was founded in 1997 under the merger of Guinness and Grand Metropolitan and today has many leading brands in different forms of alcohol. These brands include Guinness, Bailey’s, Smirnoff Vodka, Captain Morgan’s Rum, Tanqueray Gin and Johnnie Walker. It also holds shares in other alcoholic brands, such as Veuve Clicquot and Moët Hennessy.
In 2021 Diageo announced its plans to expand its tequila business in Mexico, stating it will spend over $500 million to expand its manufacturing there.
8. Rio Tinto (RIO)
In eighth place is Rio Tinto, which is a dual-listed company traded on both the London Stock Exchange and the Australian Securities Exchange, while also having joint headquarters in London and Melbourne. Rio Tinto Group was founded in 1873 when some investors purchased a mine in the Rio Tinto area in Spain. Through a long process of acquisitions and mergers, it has become the world’s second-largest metal and mining corporation, behind only BHP, with its core business still focusing on the extraction of minerals. Some of the minerals it mines are aluminium, coal, gold, iron ore and diamond, amongst many more.
Rio Tinto is another company with controversy surrounding it, with it being heavily criticized by environmental groups and Norway’s government over its negative environmental impacts. It has also been criticized in Australia in 2020 after it demolished an ancient cave.
9. British American Tobacco (BATS)
Next on our list is the largest tobacco company in the world by net sales as of 2019. British American Tobacco (BAT) was founded in 1902 and is headquartered in London, offering over 200 brands, including Lucky Strike, Pall Mall, Javaanse Jongens, HB and Viceroy, along with multiple others.
As an effort to expand, the company has used a strategy of acquisitions, mainly of other tobacco brands. More recently, in an attempt to diversify, BAT purchased 20% of the cannabis-produced OrganiGram, which is based in Canada, for £126 million. Alongside its tobacco and nicotine products, the company now offers vapour, modern oral and tobacco heating products.
10. GlaxoSmithKline (GSK)
Last on our list is the pharmaceutical and biotechnology company GlaxoSmithKline (GSK). The company was formed in 2000 through the merger of SmithKline Beecham and Glaxo Wellcome, today being the tenth largest pharmaceutical company in the world. Over the past few months, GSK’s market cap has fallen substantially, nearly halving in this time and nearly falling off of our list.
GSK’s research led it to be the producer of the first malaria vaccine, which it stated it would sell at just 5% above costs in 2014. The company has also produced multiple other products that are listed in the World Health Organization’s List of Essential Medicines, showing its success.
Along with these successes, GSK has also been involved in controversy, mainly in 2012 when they pled guilty to multiple charges about their practices and drugs that led to them paying a $3 billion settlement. This is the largest settlement by a drug company and the largest healthcare fraud case in the US to this day.
We trust this article has given you an introduction and basic knowledge of the history and operations of the UK’s 10 largest companies. An understanding of the financial landscape of the UK is crucial for UK-based and international traders to make informed decisions.
If you are keen to know more about trading these stocks with Hantec Markets, you can learn more here.
If you liked this post, you might also want to check out our Top 10 Largest US Companies by Market Capitalisation and Largest Non-US Companies.