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Financial services M&A

Based on Mergermarket data, 2018 saw a slight dip from the levels of activity seen in 2017 in the global FS M&A markets, although there were still pockets of high activity.

2018 was again hallmarked by a small number of mega-deals, including, for example, the private fundraising by Ant Financial which has really brought into focus the potential size of the FinTech market.

Coming into 2019, we expect to see fewer larger deals in the financial services market, particularly in the insurance sector where significant consolidation in the P&C/ non-life market has already happened. However, we could see further consolidation in the life insurance sector in Europe and expect this market to be quite busy.

Private equity will continue to play a large role in financial institutions M&A across the globe (particularly in Europe and the US, as we have seen in the past year). As global financial institutions solidify their strategies we also expect to see a greater number of Fintech and InsurTech deals and for these deals to really increase in value.

Hugo Laing, Partner

Top 3 sector deals by location

Top 3 Sector Deals by location image

UK and Europe

European deal volumes were up compared to 2017, although with a lower aggregate value. However, the acquisition of XL Group Ltd by AXA and the JLT group by Marsh & McLennan of the US, the first and third largest FS deals of the year globally by value, and a host of other cross-border acquisitions show that the European market is still an important market for M&A and there are pockets of the market where activity is set to increase significantly.

Europe graph

United States

The US financial services industry had a busy 2018 albeit down from the year before. M&A activity in the financial services sector involved traditional participants and non-sector players, such as private equity firms, pension funds, large tech companies and foreign conglomerates.

United Staes Graph

Asia

We have generally seen an uptick in financial services deal activity against the previous year (in terms of value), with private equity buyouts in particular being active. The relaxation of regulations pertaining to foreign investment in the Chinese banking sector by the China Banking and Insurance Regulatory Commission (CBIRC) have helped to open up the Financial Services sector. The new rules include investor friendly reforms such as removing foreign ownership caps in Chinese banks, asset management and wealth management companies.

Asia Trends

Middle East

Regional reforms across the Middle East have recently been focusing on transforming the M&A environment to attract foreign investment. M&A activity in the Middle East looks to be outward looking in nature, with business leaders looking to strategic joint ventures and with foreign investors. The push to move away from oil and infrastructure investment has led to a diversification of investment opportunities, which looks to be especially beneficial to the FinTech sector.

Trends - Middle East