Banking M&A Digest #51 (21.11.2019)

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Corporate Financier’s Notes  

by Aivars Jurcans

Done! And Done

Aon, an insurance broker, has agreed to acquire CoverWallet, an online insurance platform that allows small and midsized businesses to get price quotes and buy policies without speaking to an agent. The deal terms were not disclosed.

Source: WSJ

United Bankshares has agreed to buy Carolina Financial Corp, the parent of CresCom Bank, in a deal valued at USD 1.1 billion. The transaction will create an entity with about USD 25 billion in assets.

Source: Reuters

Elavon, a payments company and a unit of US Bancorp, has agreed to acquire Sage Pay, a payment processing unit of Sage Group (a software company), for about GBP 232 million. 

Source: Reuters

Deals On The Table

Cigna Corp, an insurer, is said to be open to considering acquisitions. Its expected USD 8 billion in free cash flow in 2020 should give it “strategic optionality”.

Source: Bloomberg

Intesa Sanpaolo, Italy’s biggest retail bank, is said to be in preliminary talks with Nexi, a payments group, “over a possible strengthening of their partnership”. Nexi, which floated in Milan in April 2019, already has a commercial partnership with Intesa in card-payment services.

Source: Reuters

The demerger of Investec Asset Management from Investec Group, its Anglo-South African parent, is said to be on track to be completed in Q1 2020. The fund management arm will be renamed Ninety One and plans to list in London with a dual listing in Johannesburg. It has more than GBP 119 billion in assets under management.

Source: Reuters

TA Associates, a private equity firm, is said to be exploring potential sale of Russel Investments, an asset manager with USD 293 billion in assets under management. In 2016, when TA Associates acquired it, Russel Investments was valued at USD 1.15 billion

Source: FT

PZU, a Polish insurer, is said to analyse the potential sale of mBank on the subject of potential synergies, if any, with the banks it already owns,

Source: Reuters

Banco Bradesco, the Brazil’s 2nd largest private sector lender, is said to be planning to spin off Next, its digital bank, by March 2020. Next is expected to reach 2 million customers by the end of 2019.

Source: Reuters

Thanks, But No Deal

Bank Handlowy, the Citi’s Polish unit, has publicly confirmed that it is not interested to consider acquiring mBank, the Polish unit of Commerzbank.

Source: Reuters

Lights Out

The European Central Bank has terminated a banking license for Anglo-Austrian Bank (until June 2019 known as Meinl Bank).

Source: FT

Metrics To Watch

For every USD 1.00 that HSBC’s investment banking takes in, 95 cents go out in costs; this ratio is significantly above the UBS’s 84% over the same 9 month period in investment banking.

Source: FT

Aviva’s, a UK insurer, stock currently trades at 7.0x times forward earnings, compared with Legal & General and Prudential at around 9.0x times.

Source: FT

Zurich, a Swiss insurer, has announced a return on equity target of 14%, up from a previous aim of 12%.

Source: FT

Follow The Money

Sberbank, Russia’s state-owned lender, and Mail.Ru, a Russian internet company, have finalised the terms of a joint food and taxi platform and plan to invest USD 1 billion in the business. Both firms will have equal stakes in the JV.

Source: Reuters

Up-and-Comers

Capitolis, a New York-based fintech which aims to streamline the way banks and asset managers manage large and open-ended trades by offering a platform to connect buyers and sellers to speed up trading processes, has raised another USD 40 million. Capitolis has already recorded transaction volumes with a notional value of more than USD 1.5 trillion.

Source: FT

Uncharted Territory

Volksbank Furstenfeldbruck, a Bavarian co-operative bank with EUR 1.8 billion in assets, has become the first German lender to pass on the cost of negative interest rates to new retail customers with small deposits – a “depository charge” of -0.5% on instant access savings accounts with deposits of EUR 1 and above. So far in Germany this practice has been confined only to very large deposits.

Source: FT

Exciting Numbers

According to the German central bank, almost 60% of German banks are charging negative interest rates on the deposits of corporate clients and more than 20% are doing the same for retail customers.

Source: FT

A Thought Worth Noting

“We believe that a decade of double-digit returns for private investment funds has ended. High purchase valuations, all-time high leverage, deteriorating credit protections, falling interest coverage and nearly USD 2 trillion of dry powder suggest the best days are behind them.”

Lisa Shalett, chief investment officer, Morgan Stanley Wealth Management

 

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Aivars Jurcans has more than 20 years of corporate finance and investment banking experience. His services are currently available through MURINUS ADVISERS.

Photo by Joe Taylor on Unsplash

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