European banks are considering more M&A activity to compete with U.S. rivals due to industry pressure

From Investing.com: 2025-01-13 01:19:24

European banks and asset managers are feeling the pressure to bulk up to compete with U.S. rivals. Record profits and soaring shares in the past two years haven’t closed the gap. With competition set to intensify in 2025, more M&A activities are expected, especially in areas like alternative investments and FinTech.

Some of the biggest bids in banking last year were unsolicited or hostile, like BBVA’s 12 billion euro play for Sabadell and UniCredit’s 10 billion euro offer for BPM Banco. Asset managers are also exploring tie-ups to compete with bigger U.S. players, with Allianz and BNP Paribas making moves.

Last year saw the biggest annual deal volume of European financial services M&A since 2015, with total deal volume hitting 52 billion euros. Experts predict U.S. players might swoop in on undervalued European rivals, especially in asset management. Regulatory challenges and political opposition remain key obstacles for dealmaking.

UniCredit’s move to buy a stake in Commerzbank triggered a political storm in Germany, showing that political climate matters for M&A deals. Falling rates are expected to ease capital consumption demand for M&A deals, but challenges remain. Regulators in the euro zone are unlikely to stand in the way of M&A deals.



Read more at Investing.com: Analysis-European banks’ record takings fuel M&A talk as pressures on industry persist By Reuters