Exclusive: UK financial services M&A hits five year high but deal value slumps
Mergers and acquisitions (M&A) in the UK’s financial services sector rebounded to hit a five year high last year but overall deal value slumped on 2020 levels, according to new data.
Dealmakers racked up 252 deals in 2021, up from 134 in 2020, which capped off the most active year for financial services M&A since 2016, according to data from big four accountancy firm EY.
But despite the surge in deal volume, the UK has lagged on value with overall value falling from £31.2bn in 2020 to £25.8bn in 2021.
Tom Groom, UK financial services strategy and transactions leader at EY, said: “Given the difficult economic and health backdrop and a pandemic-linked lull in 2020, 2021 was a strong year for UK financial services M&A activity.
“There were 118 more deals announced during 2021 compared to 2020, likely aided by strong economic recovery particularly in the first half of 2021, and the positive sentiment around the large-scale vaccine and booster roll-out.”
Groom said that the rebound in deal volume was aided by strong economic recovery particularly in the first half of 2021, and the positive sentiment around the vaccine and booster roll-out.
Oversees interest also surged last year with the number of oversees buyers acquiring UK targets jumping from 33 in 2020 to 63 in 2021.
Total value of oversees deals in the UK similarly slumped however from £19.6bn in 2020 to £11.4bn in 2021.
UK firms acquiring overseas targets rose from 41 in 2020 to 52 in 2021, with deal value increasing from £3.2bn to £6bn.