While financial services deal activity has failed to live up to recovery predictions cast at the beginning of year, further industry-wide restructuring and investment for growth has resulted in a flow of mid-market deals, according to the latest European Financial Services M&A Insight report from PricewaterhouseCoopers.
Although the overall value of European financial services M&A increased during the second quarter of 2010, activity remained at a lower level than the same period of 2009.
The value of European financial services M&A increased to EUR10.9bn in the second quarter of 2010, from EUR7.8bn in the first.
Total deal values for the quarter were 46 per cent lower than the EUR20.3bn recorded during the same period of 2009.
However, mid-market activity appears to be on the up and consolidation and restructuring are set to gain pace.
Nick Page, partner, PricewaterhouseCoopers, says: “Economic pressures have made strategic planning a challenge. Concerns over levels of European sovereign debt and banking solvency are casting a shadow over the capital markets contributing to relatively subdued levels of M&A activity.”
Mid-market activity increased significantly in the second quarter of 2010 with the aggregate worth of deals valued at less than EUR1bn increasing to EUR6.2bn from EUR5.3bn in the previous quarter and EUR3bn during the same period in 2009.
Restructuring in Western Europe was the central theme of the quarter. Domestic transactions accounted for 70 per cent of total deal value and five countries dominated, namely, the UK (39 per cent by value), Spain (14 per cent), France (13 per cent), Luxembourg (12 per cent) and Sweden (9 per cent). Government-led activity was insignificant representing only 0.5 per cent of total deal value.
