Banking M&A Digest #131 (1.7.2021)

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Corporate Financier’s Notes by Aivars Jurcans

Done! And Done

Vipps, MobilePay and Pivo, national mobile payment providers in Norway, Denmark and Finland, have agreed to merge to become a leading bank-owned mobile wallet group in Europe with 11 million customers and more than 700 million annual transactions. Vipps, which is owned by more than 100 Norwegian banks, will take the lead in the combined group, owning 65% of it.

Source: FT

Union Bancaire Privee, a Swiss lender, has agreed to buy Millennium Banque Privee-BCP (Suisse), from Banco Comercial Portugues. Founded in 2002, Millennium specialises in private banking services. The financial terms of the deal were not disclosed.

Source: Reuters

Deutsche Boerse, an operator of German stock exchange, has agreed to buy a 2/3 stake in Crypto Finance, a Swiss fintech providing trading storage and investment in digital assets for institutional and professional investors. The purchase price is said to be “somewhat more than USD 108.68 million”.

Source: Reuters

JPMorgan has agreed to buy a 40% stake in C6 Bank, a Brazilian digital lender. The value of the deal was not disclosed. C6 was valued at USD 2.28 billion in a fundraising round in December 2020.

Source: Reuters

Natwest Group has agreed to sell most of its Irish commercial lending business to Allied Irish Bank, an Irish lender, for EUR 4.1 billion. The deal will see AIB take over around EUR 4.2 billion in gross performing commercial lending and associated undrawn exposures of around EUR 2.8 billion.

Source: Reuters

AIA Group, a Hong Kong-based insurer, has agreed to buy a 24.99% stake in China Post Life Insurance, a subsidiary of China Post Group focused on the mass-affluent market in China, for about USD 1.9 billion. 

Source: Bloomberg

JPMorgan agreed to buy OpenInvest, a financial technology firm that offers services for values-based investing. Terms of the transaction were not disclosed.

Source: Bloomberg

Raisin, a German fintech, and Deposit Solutions, its rival, have agreed to merge to create a pan-European group that links banks with depositors. The combined company, named Raisin DS and headquartered in Berlin, will have about 400 banking partners.

Source: FT

Visa agreed to buy Tink, a Swedish fintech, in a EUR 1.8 billion deal. The purchase price is a 165% premium to the value given to Tink by investors in a fundraising round in December 2020.

Source: FT

JPMorgan Chase agreed to buy Nutmeg, a UK digital wealth management platform. The price of the deal was not disclosed but is said to value the company at about GBP 700 million. Established in 2021, Nutmeg manages GBP 3.5 billion in assets for about 140,000 customers.

Source: FT

Commonwealth Bank, an Australian lender, has agreed to sell CommInsure General Insurance, its Australian general insurance business, to Hollard Group, a South African privately-owned insurer, for an upfront cash consideration of USD 468 million plus deferred payments. 

Source: Reuters

HSBC has agreed to sell its French retail banking network (244 branches and 800,000 customers) to Cerberus, a US private equity group, for a token EUR 1.00. HSBC will book a pre-tax loss of roughly USD 2.3 billion alongside a USD 700 million charge relating to impairment of goodwill.

Source: FT

Generali, an Italian insurer, has agreed to buy Axa’s insurance assets in Malaysia and take full ownership of a JV. The total consideration for the combined deals is said to be around EUR 262 million.

Source: Reuters

Illimity, an Italian lender, and Apollo Capital Management, a US fund manager, have agreed to form a JV to invest up to EUR 500 million in distressed loans backed by real estate assets in Italy. Illimity is said to contribute to the JV loans worth EUR 231 million in gross nominal value.

Source: Reuters

Deals On The Table

Swiss Re, a reinsurer, is said to be planning to cut its shareholding in Phoenix Group by selling a roughly 6.6% stake for GBP 437 million. 

Source: Reuters

Kakao Bank, a Korean internet-only lender, is said to be planning to raise as much as USD 2.3 billion in an IPO. At the top end of the pricing range the bank will have a market capitalisation of more than USD 16 billion.

Source: Bloomberg

NN Group, a Dutch insurer, is said to be “in talks” to buy some of Metlife’s European life insurance assets for around USD 740 million. 

Source: Bloomberg

Russia’s central bank is said to be planning to take Otkritie, a state-run lender, public in an IPO by the middle of 2022. Otkritie has a book value of about USD 7.3 billion. 

Source: FT

Paytm, an Indian payments group, is said to be planning an initial public offering to raise up to USD 3 billion. 

Source: FT

BBVA, a Spanish lender, is said to be planning to sell is depositary unit for EUR 400 million. The unit held EUR 65 billion on behalf of investment funds at the end of Q1 2021.

Source: Reuters

Metrics To Watch

Illimity, an Italian bank specialised in small business loans and on servicing bad debt, expects to achieve a 10% return on equity in 2021, almost double last year’s result. Its shares are valued at 1.3x times tangible book.

Source: FT

Up-and-Comers

Lendbuzz, a Boston-based startup that offers auto loans to people who lack credit history, has raised USD 60 million in its latest equity funding round and USD 300 million in debt. 

Source: Reuters

Majority, a Houston and Stockholm-based digital banking provider for immigrant communities in the US, has raised USD 19 million in seed funding.

Source: Reuters

Bunq, a Dutch challenger bank, has raised EUR 160 million in investment by a British private equity firm that values it at USD 2 billion. Bunq passed EUR 1 billion in user deposits in 2021.

Source: Reuters

Wise, a UK-based financial technology firm previously known as TransferWise, is said to be planning to go public with the first direct listing on London’s main market. Larger peers such as Adyen and PayPal trade at about 15x times trailing sales. That would value Wise at more than GBP 6 billion, or 55x times trailing adjusted ebitda.

Source: Bloomberg, FT

Exciting Numbers

Bank M&A totalled around USD 31 billion so far this year, already eclipsing deal activity for all of 2020, according to S&P Global Market Intelligence.

Source: FT

A Thought Worth Noting

“In terms of sellers, one group will be banks that have underinvested and would need to embark on a multiyear catch up on technology spending.”

Ken Usdin, analyst, Jefferies

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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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