Financial Services Deal Insights: Review of 2008
Datamonitor, February 2009, Pages: 31
Understanding the key M&A trends in the financial services sector is of critical importance to all players in the space and, given the turmoil experienced at the end of 2008, this has never been more important. This report provides an overarching view on the most important trends of the previous 12 months, as well as in-depth insight into the most important and significant deals.
Scope
- Analysis through two deliverables analyst opinion on key deals (PDF brief), and monthly roundup with analysis of trends and drivers (PowerPoint)
- Insights into deal activity across M&A, private equity, private placement, IPO, secondary offering, and strategic alliance deals
- Analysis on all key sectors, namely banking, asset management, insurance, investment banking, capital markets and brokerage, and cards
- Detailed analysis of the deal activity during the year, along with the trend by deal volume and value
Highlights of this title
It was the decision in September by the US government to allow Lehman Brothers to fail that was the turning point in the crisis. At first it appeared that the financial community would take care of its own. However, Lehmans collapse precipitated a knock-on effect and, as a result, governments were forced to step in to bolster the ailing system.
Overall deal activity in Asia Pacific fell through 2008, as the financial crisis restricted the willingness and ability of financial services players to look to M&A opportunities. Activity in Europe and North America dominated in each quarter, peaking in Q4 with a rush of rights issues and hastily arranged acquisitions of collapsing banks.
In contrast to the economic downturn that took hold of the worlds financial markets during 2008, the emerging European nations fared well in terms of the level of deal activity in the financial services industry. However, activity in emerging Europe remained relatively stable. Nevertheless, there was a significant contraction in Q4.
Key reasons to purchase this title
- Gain a detailed insight into the key deals of 2008 and the future impact of these for M&A in the financial services industry in 2009
- Understand the impact of the crisis on deals in each of the high growth regions, and the key moves in 2008
- Examine the major trends in M&A by region and business line across 2008
Overview 1
Catalyst 1
Summary 1
The crisis in 2008 will define the future of the Financial Services industry 3
2008 will go down in history as the turning point for the future of the financial services industry 3
Bank failures will continue in 2009, with small banks most at risk 4
The wave of nationalizations will not be reversed for several years 4
The crisis has had a huge impact on investment in the high growth regions 6
Asia Pacific: the downturn has had a clear impact on deal activity 6
Deals in Asia Pacific declined through 2008 as the financial crisis took hold 6
India led the way in terms of total activity, with 110 deals in 2008 7
The slowdown has seen acquisitions fall by half between Q1 and Q4 7
The clearest trend has been a fall in acquisitions in emerging markets from Europe and the US 8
There were some extremely interesting deals in Asia Pacific in 2008 9
The merger of Westpac and St George was one of the major deals in the region by value 9
Bank of America invested heavily in China but is among several leading banks forced to sell their stakes 11
GEs sale of its Japanese unit to Shinsei sees the US giant scaling back its global consumer finance business 12
Deal activity in the emerging European markets remained buoyant throughout 2008 13
The number of deals remained consistent through the first three quarters of the year 13
The level of acquisition investment declined rapidly towards the second half of the year 14
Poland, Ukraine and Greece saw the highest level of deal activity in the emerging European nations 15
Kazakhstan saw the highest deal values due to the nationalization of its banking system 16
The most notable deals in emerging Europe involved foreign investment 17
Insurance heavyweights piled into Turkish insurance market 17
Kazakhstan nationalizes banking system at huge expense 18
US and European banks make significant investments in Polish banking market 19
In Latin America, Brazil saw the highest volume of deal activity in 2008 20
The majority of transactions took place in Brazil 20
Insurance deals were popular in Brazil while deals in the retail and commercial banking space were common in Mexico 21
There were significant deals announced across the region 22
Criteria Caixa bought a 20% stake in Inbursa as part of its strategy to re-balance its investment portfolio 22
Banco do Brasil bought Banca Nossa Caixa as part of its bid to regain market leadership 22
AXA buys Seguros ING in Mexico as part of its "Ambition 2012" growth strategy 23
Deal activity in the Middle East slowed throughout 2008 in line with other emerging markets 25
Not only did the number of deals decline, the value of deals did too 25
The largest number of financial deals occurred in the UAE and Bahrain 26
Israel and Saudi Arabia led the way in terms of the highest deal values 27
Acquisitions made up the majority of deal types, followed by private placements 29
The most notable deals in 2008 involved supersized IPOs and a shedding of mortgage-backed assets 29
Al-Inma Bank announces final IPO results 29
Ajman Bank IPO more than 85 times over-subscribed 30
Bank Hapoalim sells entire mortgage-backed securities portfolio to PIMCO 30
Appendix 31
Definitions 31
Ask the analyst 31
Disclaimer 31
List of Tables
Table 1: Total non-life market size, Mexico, 2003-07 ($m) 24
List of Figures
Figure 1: Deals in Asia Pacific declined through 2008 as the financial crisis took hold 6
Figure 2: India led the way in terms of total activity in Asia Pacific, with 110 deals in 2008 7
Figure 3: The slowdown has seen acquisitions fall by half between Q1 and Q4 8
Figure 4: There has been a clear trend towards a fall in acquisitions from players in Europe and the US in emerging markets 9
Figure 5: The combined Westpac and St George Bank will be the largest consumer lender in Australia, November 2008 10
Figure 6: Deal activity in the emerging European markets remained relatively buoyant throughout 2008 14
Figure 7: The number of acquisitions in emerging European markets declined rapidly towards the latter half of the year 15
Figure 8: Poland, Ukraine and Greece saw the highest level of deal activity in the emerging European nations 16
Figure 9: Kazakhstan led the pack in terms of deal value, followed by Turkey, Poland and the Czech Republic 17
Figure 10: Brazil saw the most financial services deals in Latin America, 2008 20
Figure 11: Brazil saw a large number of insurance deals in 2008 21
Figure 12: The Mexican non-life insurance market has exhibited strong growth in recent years 24
Figure 13: Deals in emerging markets slowed towards the end of 2008 25
Figure 14: The value of financial deals in emerging markets declined rapidly in the second half of 2008 26
Figure 15: The UAE and Bahrain saw the most financial deals in the Middle East markets in 2008 27
Figure 16: Israel and Saudi Arabia shared the spotlight in terms of the highest deal value 28
Figure 17: Acquisitions comprised the vast majority of deal activity in the Middle East region 29
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