Major Bank M&A Deals Making a Comeback
(26 June 2024 – Global) While bank merger and acquisition (M&A) activity remains relatively subdued, the value of deals that got over the line in recent months were in aggregate substantially larger.
Jim Dobbs reports for American Banker that as of mid-June, 27 bank deals worth US$5.5 billion have been announced in Q2 2024, easily surpassing the US$5.2 billion cumulative value of the 126 deals executed over the preceding five quarters according to S&P GMI. The largest bank deal of 2024 so far was Winter Haven, Florida-based SouthState Corp.'s US$2 billion bid to acquire Independent Bank Group in McKinney, Texas.
Overall market wide, global M&A values have recovered strongly from 2023’s nadir even as the number of deals fell significantly, according to data for the first half of the year from Mergermarket. Valuations are surging even as deal numbers continue to fall.
M&A activity grew by 17 percent year-on-year (YOY) in value terms to US$1.6 trillion in H1 2024 with healthy pipeline of dealmaking involving large listed companies for the first six months of the year, particularly in the US and UK. Generative AI has also been a key M&A theme for North America in particular. The first six months of the year saw deal values for North American AI companies totalling US$12.8 billion, up 57 percent YOY.
“Stagnant M&A activity is removing an option some of the most vulnerable companies sorely need to help them address overleveraged balance sheets and looming maturities. The expected drop in interest rates will mechanically serve to close valuation gaps going forward” commented Fitch Ratings Head of EMEA Corporate Ratings, Alex Griffiths.
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