Euro cross-border financial services M&A rises

Cross-border financial services deals in Europe jumped in Q3, exceeding domestic M&A deals within the sector for the first time during 2010

European cross-border financial services M&A activity saw an increase in Q3, exceeding domestic deals for the first time over 2010, found accountancy firm PwC.

In the previous two quarters, cross-border transactions were just 41% of European financial services M&A, whereas in Q3 they made up 57% of all such deals.

Of the four largest deals–bank restructuring deals collectively worth €11.3bn–three of those involved cross-border bidding.

At the middle and smaller end of the market, there were over €2bn of cross-border deals.

Financial services deals in Europe were also up generally. In the third quarter of 2010, they were worth €16.8, an increase of over 50% on the previous quarter.

Private equity signalled its return to the financial services M&A market, a trend the firm expects to continue. In total, private equity-related deals during the quarter were worth €3.3bn, or 20% of all deals.

PwC predicted the influence of private equity will amount to a “changing M&A landscape”.

A rise in insurance deals is predicted, based on pressure to consolidate that is likely to come out the Solvency II directive from Europe.

The directive will force firms to reassess their strategy and squeeze their capital requirements, leading to “widespread changes in the ownership of European insurance assets”, PwC said.

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