M&A activity has been led by agreements for technology and innovation, as competition for strategic market advantage continues to fuel mergers and acquisitions (M&A) across financial services (FS) sectors. As banks, insurance companies, and asset managers attempt to optimise cost structures, improve top-line growth, and increase efficiency and profitability, acquisitions and divestitures are projected to pick up steam in the coming months. As a result, dealmakers’ entire strategic rationale is heavily influenced by change.
- In contrast to previous economic crises, a strong buy-side is being led by a growing number of private equity (PE) investors as well as more motivated market actors, such as FS corporates, who are looking to engage in the recovery through M&A activity. This is resulting in a deal-making environment with numerous prospects for domestic and cross-border mergers, acquisitions, and divestitures.
- We expect portfolio redefinitions to be a key driver of M&A activity, in which large FS corporations find unprofitable or non-core business components to divest.
- In the financial services business, ESG standards are continuing to redefine risk management and value creation. The urge to acquire ESG assets and know-how is reflected in FS acquisitions centred on sustainability.