H1 2024 M&A activity fell year-on-year, but rising market confidence means a pick-up in H2 is expected

Following a slow second half of 2023, M&A activity in the European financial services industry picked up in the first six months of this year, according to EY’s latest financial services M&A analysis, but remains muted.

While the number of publicly disclosed financial services deals across Europe in H1 2024 was up 38% on the previous six months, it was down 3% year-on-year. Total M&A value for the first half of this year also fell year-on-year, from €23.8b in H1 2023 to €17.1b in H1 2024, despite three €1b+ deals from large corporates across the region. However, a potential sizeable deal in the Spanish market could significantly boost deal value in the second half of this year.

European banks, insurers and asset managers publicly disclosed 367 deals between January and July this year, compared to 380 in H1 2023, and 265 in H2 2023.

Benoit Gérard, EMEIA Financial Services Strategy and Transactions Leader at EY, comments: “While Europe’s current macroeconomic environment – still characterized by high interest rates and inflation, and ongoing geopolitical risk – continues to challenge firms and impact deal activity, the first half of this year was a marked improvement on the six months prior.

“Short-term rises and falls in deal volume and value can inform the direction of travel, but it is important to also take a longer-term view. As Europe’s economies recover and confidence in markets rises on the back of expected further interest rate decreases, we are now starting to see tempered optimism take a firmer hold. If economic improvement continues as expected, deal activity across Europe’s financial markets should pick up in the second half of this year, as firms compete for growth and scale in a competitive market, and the pent-up pipeline of private equity disposals is gradually released.”

Sector-specific M&A activity across Europe’s financial markets

• The number of publicly disclosed European banking deals fell from 126 in H1 2023 to 104 deals in H1 2024, and the sector reported a fall in deal value, from €15.1b in H1 2023 to €10.7b in H1 2024.
• The number of publicly disclosed European insurance deals increased from 130 in H1 2023 to 162 in H1 2024, but the overall disclosed deal value decreased from €5.2b in H1 2023 to €4.1b in H1 2024.
• The number of publicly disclosed European wealth and asset management deals fell from 124 deals in H1 2023 to 101 deals in H1 2024, resulting in a year-on-year fall in value, from €3.5b in H1 2023 to €2.3b in H1 2024.

The number of non-European firms acquiring European targets rose from 41 in H1 2023 to 52 in H1 2024, although the total disclosed deal value dropped from €3.2b in 2023 to €1.4b this year. European firms acquiring targets from other markets increased from 24 in H1 2023 to 32 in H1 2024, but again, total disclosed value fell, from €1.9b in 2024 to €1.0b in 2023.

ENDS

Notes to editors:

• Deals include transactions (announced or completed) where the target is in one of the three financial services sectors: banking, insurance, or asset management
• Equity investments are included, but joint ventures are not
• Deals where less than 20% (disclosed) of the company was acquired have been excluded from this analysis
• The total number of deals relate to where there was either a European target or European acquirer
• Data range: 1 January - 30 June 2024
• There is no minimum disclosed value deal threshold