Growth, diversification, and product line expansion remain primary drivers of acquisition and divestiture activity across financial sectors. However, value capture from M&As is becoming more difficult to realize due to the increased instability in the economic landscape and regulatory environment. Trends from the past several years reflect industry consolidation in many sectors, and a heavy focus on risk management, thus requiring the need for specialized expertise.
Industry leaders are more engaged in complex, rapid transactions which cross industries and sectors in an effort to gain or sustain market position. Within the US markets, non-traditional players, banks and insurers are aggressively investing, and the winners are those companies that most efficiently balance market and portfolio risk.
Transactions have been growing in complexity and have become increasingly riskier. M&A transactions in the current climate present companies with unique and significant opportunity to acquire new capabilities in a very short time and create competitive advantages quickly at reasonable costs. Through acquisition and divestiture, Companies are able to expand market position and introduce new profit pools for global economies of scope and scale.