Mergers and acquisitions in the U.S. financial services industry took a dip last year but potential sell-offs in Europe could pave the way for a better M&A market for 2012 and beyond, according to a new PwC report.
The report revealed that U.S. banking, insurance, asset management and other financial service companies announced 756 deals last year, representing a 10% drop from 840 announced deals in 2010 and a 28% drop from the five-year peak of 1,048 in 2007. Yet, divestitures by European financial institutions could stimulate M&A in the United States this year as well-capitalized corporate buyers and financial investors are positioned to take advantage of these divestitures.
The largest asset management deal last year was Lehman Brother’s sale of its 40% stake in Neuberger Berman Group LLC back to NB employees for $1.5 billion, according to the report. The second biggest deal involved the acquisition by Canadian Imperial bank of Commerce of a 41% stake in American Century Investments for $848 million.
“Many European banks are seeking to sell U.S. business operations to meet stricter capital requirements at home, and that has the potential to drive a lot of deal making,” stated John Marra, transaction services – financial services leader, PwC US.