European Financial Services M&A volume hit a nine-year high in H1 2023, but overall deal value fell year-on-year

The European financial services industry announced a nine-year deal high in the first half of 2023, with 382 deals across the region, compared to 337 in the same period in 2022 (a 13% year-on-year rise), according to latest EY financial services M&A analysis. However, the total disclosed deal value for the period fell year-on-year, from £29.2bn in H1 2022 to £20.9bn in H1 2023, due to a decrease in the number of deals over £1bn. For year-on-year context, in H1 2022 ten deals in excess of £1bn were announced within Europe compared to five deals announced in H1 2023.

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

• The number of European insurance deals rose from 106 in H1 2022 to 131 in H1 2023, accompanied by a significant fall in total deal value: from £7bn in H1 2022 to £4.2bn in H1 2023.
• Similarly, European wealth and asset management deal numbers rose from 92 in H1 2022 to 126 in H1 2023. However, the overall publicly disclosed deal value decreased from £3.8bn to £3.0bn year-on-year.
• In contrast, the European banking sector reported a year-on-year deal volume fall in H1 2023, with 125 deals this year, down from 139 in H1 2022, and total deal value decreased year-on-year from £18.5bn to £13.7bn.

The number of non-European firms acquiring European targets was down from 53 in H1 2022 to 42 in H1 2023, and the total value fell from £11.6bn in H1 2022 to £2.4bn in the same period in 2023. European firms acquiring targets from other markets fell from 31 in H1 2022 to 24 in H1 2023, with deal value decreasing from £4bn to £1.6bn.

Sebastian Mocanu, Partner, Technology Consulting, EY Romania: “The Romanian financial services M&A market was not significantly active in the first part of 2023 with no medium or large deals been completed, but there are some signs that the market will pick up in the second part of the year. The main drivers for market activity increase are primarily linked to further consolidation of the Romanian banking system and changes in the strategy of tier 2 and tier 3 banks present on the Romanian market.”