Decade-high M&A activity in UK Financial Services despite value plunge
New Financial Services M&A deals were up 21% QoQ in UK&I but down 17% in Europe in Q3 2023.
By AnsaradaThu Dec 21 2023Mergers and acquisitions, Due diligence and dealmaking, Industry news and trends, CEO-CFO
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Ansarada's Q3 Indicators data has reveal a robust 21% quarter-over-quarter increase in New Financial Services M&A deals in the UK&I region, contrasting with a notable 17% decline in Europe during the same quarter.
According to data from EY, the UK Financial Services sector exhibited a remarkable surge, hitting a 10-year high in M&A volume during the first half of 2023. This represents a substantial 16% uptick when compared to the corresponding period in 2022. However, this surge in activity was tempered by a significant decrease in total deal value, plummeting from £11.5 billion to £4.7 billion.
Similarly, the overall disclosed deal value for European financial services M&A witnessed a descent from £29.2 billion in H1 2022 to £20.9 billion in H1 2023. The primary contributor to this decline was the reduction in the volume of deals exceeding £1 billion (EY).
The economic landscape, marked by challenges such as rising interest rates and inflationary pressures, resulted in a contraction of financing options for large-scale deals. Nevertheless, industry experts remain optimistic, anticipating a resurgence in higher deal values as firms adapt to the evolving business environment.
Over the twelve months leading up to Q3 2023, the financial sector witnessed a transformative wave, with more than 50 domestic bank consolidations reshaping the UK and European financial landscape, according to White & Case. Noteworthy among these were high-profile bank rescues, including UBS's acquisition of Credit Suisse for a substantial US$2 billion and HSBC UK Bank's acquisition of Silicon Valley Bank UK for a considerable £1 billion.
The future trajectory points towards additional market consolidation through acquisitions and strategic alliances, as banks prioritize digital transformation. This strategic shift is evident in the increased prevalence of equity/debt fund acquisitions and partnerships.
According to data from EY, the UK Financial Services sector exhibited a remarkable surge, hitting a 10-year high in M&A volume during the first half of 2023. This represents a substantial 16% uptick when compared to the corresponding period in 2022. However, this surge in activity was tempered by a significant decrease in total deal value, plummeting from £11.5 billion to £4.7 billion.
Similarly, the overall disclosed deal value for European financial services M&A witnessed a descent from £29.2 billion in H1 2022 to £20.9 billion in H1 2023. The primary contributor to this decline was the reduction in the volume of deals exceeding £1 billion (EY).
The economic landscape, marked by challenges such as rising interest rates and inflationary pressures, resulted in a contraction of financing options for large-scale deals. Nevertheless, industry experts remain optimistic, anticipating a resurgence in higher deal values as firms adapt to the evolving business environment.
Over the twelve months leading up to Q3 2023, the financial sector witnessed a transformative wave, with more than 50 domestic bank consolidations reshaping the UK and European financial landscape, according to White & Case. Noteworthy among these were high-profile bank rescues, including UBS's acquisition of Credit Suisse for a substantial US$2 billion and HSBC UK Bank's acquisition of Silicon Valley Bank UK for a considerable £1 billion.
The future trajectory points towards additional market consolidation through acquisitions and strategic alliances, as banks prioritize digital transformation. This strategic shift is evident in the increased prevalence of equity/debt fund acquisitions and partnerships.
Q3 2024 spotlight: UK&I vs. Europe M&A showdown
Discover the deal drivers and the dominant industry players across the UK, Ireland and Europe in our new M&A Deal Indicators report.
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