Investors bullish about financial services M&A
Confidence rebounds in deals struck by UK financial services firms, study suggests
Investor confidence in UK financial services M&A has returned for the first time since the end of the downturn, a new study suggests.
Research carried out by Cass Business School for the Institute of Chartered Accountants in England & Wales (ICAEW) found that Aberdeen Asset Management struck the most successful M&A deals of any FTSE100 firm in 2013.
The global asset manager completed two acquisitions which helped its share price to outperform the FTSE100 by 101 per cent, according to the UK Acquirer "Best in Class" Index, which is jointly developed by the ICAEW's Corporate Finance Faculty and Cass's M&A Research Centre.
It is the first time that a financial services firm has topped the index since the research was first conducted in 2011.
Director of Cass's M&A Research Centre, Professor Scott Moeller, said the findings signal the return of investor confidence in financial services M&A.
"The past two years have seen industrial firms such as Weir Group and Intertek lead the index as the UK financial services industry focussed principally on downsizing and divesting.
"Succeeding at M&A is a challenge, and only about half of all deals in any particular year will go on to be successful. With Aberdeen as the top acquirer in the past year, we see the broadening of M&A activity into other sectors."
David Petrie, Head of Corporate Finance at the ICAEW, said: "There are some big media myths about M&A success. But the methodology we've developed with Cass shows empirically that carefully considered and carefully planned acquisitions - employing expert corporate finance advisers - have worked well for many large PLCs. Aberdeen is one those that have used an acquisition strategy to increase shareholder value and grow their companies."
Aberdeen Asset Management acquired two companies during the period of the study, which examined the returns of all deals completed by FTSE100 firms between January 2012 and December 2013.
In February 2013, the company bought Artio Global Investors for $175m. It followed up the deal by acquiring Scottish Widows Investment Partnership for £550m.
Last year's index was led by the safety solutions provider Intertek Group, which outperformed the FTSE100 by 55 per cent after completing nine deals worth $810m between 2011 and 2012.
In 2012, the engineering firm Weir Group led the index after beating the FTSE100 by 120 per cent following two deals in 2010 and 2011 amounting to more than a billion dollars.
Aberdeen Asset Management will be presented with the ICAEW's Corporate Development award at the Corporate Finance Faculty's annual reception at the Honourable Artillery Company in the City of London this evening. The award recognises the major contribution of effective M&A to corporate growth, shareholder value and employment.