Banking M&A Digest #103 (3.12.2020)

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Corporate Financier’s Notes by Aivars Jurcans

Done! And Done

Conduit Holdings, a UK reinsurer, has completed an GBP 826 million IPO in London.

Source: Bloomberg

S&P Global has agreed to buy IHS Markit, a London-based financial analytics company, for USD 44 billion. Combined, in 2019 S&P Global and IHS Markit controlled about 8% of the market, compared to Bloomberg and Refinitiv with 21% and 33% respectively.

Source: FT

Westpac, an Australian banking group, has agreed to sell its general insurance arm to Allianz, a German insurer, for USD 535 million. The price is said to be equivalent to about 8x to 12x times earnings.

Source: Reuters

Qatar Investment Fund, a Doha-based sovereign wealth fund, has agreed to buy a 10% stake in Borsa Istanbul from TWF, a Turkish sovereign wealth fund, for an undisclosed amount. This transaction would reduce TWF’s stake in the company to 80.6%.

Source: Bloomberg

Vienna Insurance Group has agreed to buy Aegon’s, a Dutch insurer, Central and Eastern European business (insurance companies, pension funds, asset management and service companies in Hungary, Poland, Romania and Turkey) for EUR 830 million. In 2019, the assets generated a net profit of around EUR 50 million.

Source: Reuters

Atlas Mara, an African banking group started by Bob Diamond (a former Barclays CEO), has agreed to sell a 62.06% stake in Banque Populaire du Rwanda (at 1.09x times book value) and African Banking Corp Tanzania (at 0.42x times book value) to KCB Group, Kenya’s biggest bank.

Source: Bloomberg

Deals On The Table

Affin Bank, a Malaysian lender, is said to be considering an IPO of Affin Hwang Asset Management, an asset manager where the bank owns 63% of shares, that could raise about  USD 123 million. 

Source: Bloomberg

Access Bank, a Nigerian lender, is said to be in talks about a potential acquisition of Atlas Mara’s businesses in Botswana, Zimbabwe and Zambia.

Source: Bloomberg

Standard Life Aberdeen is said to have decided to sell Parmenion, a hybrid investment platform and discretionary fund manager providing ready-made investment portfolios for financial advisers. Parmenion was originally acquired for GPB 50 million in 2016. Based on a similar 5x times revenue multiple it could be valued at around GBP 100 million today.

Source: FT

Perella Weinberg Partners, an investment bank, is said to be in “advanced discussions” to combine with FinTech Acquisition Corp IV, a blank-cheque company. The deal is expected to list Perella Weinberg Partners advisory business at an equity valuation of about USD 760 million.

Source: Reuters, FT

Sabadell, a Spanish bank, is said to be “exploring options” to sell TSB, a UK lender it acquired in 2015.

Source: Reuters

Thanks, But No Deal

BBVA and Sabadell, the Spanish lenders, have given up merger talks “because of disagreements over the pricing of the deal”. Together both banks would have accounted for about 20% to 25% of Spanish domestic market’s loans, deposits and mutual funds.

Source: FT

Metrics To Watch

ABN Amro, a Dutch state-controlled lender, trades at 0.5x times book value, in line with its European peers.

Source: FT

Amigo Loans, a UK subprime lender, reported that 22,000 of its 176,000 borrowers were still on a payment holiday at the end of October 2020. 

Source: FT

Up-and-Comers

Hippo Enterprises, a US home insurance technology company, has raised USD 350 million investment from MS & AD, a Japanese insurer. 

Source: FT

WealthNavi, a Japanese online wealth manager, is said to be preparing for an IPO which could value it at USD 430 million to USD 620 million.

Source: FT

Exciting Numbers

The Institute of International Finance estimates that global debt will rise more than USD 20 trillion from 2019 levels to USD 277 trillion by the end of 2020, equivalent to 365% of GDP.

Source: FT

A Thought Worth Noting

“Even before the crisis, European banks were not profitable, struggling with negative interest rates. Now expectations are that we will remain in negative interest rate territory for another ten years, so banks will have to transform and adjust to survive, gaining bigger scale through mergers and acquisitions.”

Francisco Riquel, head of equity research, Alantra Equity Research

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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.

Design by Artis Briedis, Photo by Joe Taylor on Unsplash

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