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Big Deals (September 17) Print E-mail

Surge in European bank deals. Global oil and gas and Asia M&A also strong.

By Marine Cole

The European sovereign debt crisis prompted consolidation of banks on the other side of the pond. As a result, the number of mergers and acquisitions in the sector is at an all-time record

There have been 381 announced M&A deals in the European banking sector so far this year, up 11 percent from 344 deals at this point in 2009 and the highest year-to-date number on record, according to data provided by Thomson Reuters.

Two of the top five M&A deals in the sector were recently announced with the $5.3 billion acquisition of Bank Zachodni, Poland's third-largest bank by value, by Banco Santander of Spain. Another large deal announced recently was a $4.9 billion investment in Deutsche Postbank AG by Deutsche Bank.

Both deals respectively rank as the third and fifth largest M&A transactions within the European banking sector.

But from a volume point of view, the sector is down 39 percent in Europe compared to the same period last year. This suggests a bulk of this year’s deals involve smaller institutions.

Activity in the broader financials sector in Europe follows the same trend, with year-to-date number of deals totaling 1,290, the largest on record, while total value is down 29 percent from the same time last year.

The financial sector is the most active industry involved in M&A in Europe, with total value of $101.4 billion, representing 25 percent of total activity in the region this year.

Asia is also big in M&A lately.

The recently announced $4.75 billion acquisition of oil & gas company Japan Nuclear Fuel by a consortium of 13 investors is the largest oil and gas M&A transaction on record in Japan, according to Thomson Reuters.

Overall M&A activity is up 14 percent so far this year in Japan, despite a 16 percent decline in the number of announced deals with 1,489 deals in 2010 compared to 1,762 announced this time last year.

M&A is focused on the financial industry in Japan, with 110 announced deals and total value of just under $17 billion, accounting for 25 percent of all M&A activity by value.

With natural resources and financial services, oil and gas is another sector that's seeing a boom in M&A activity, and not only in Asia.

Worldwide, M&A activity in 2010 in oil & gas reached the highest year-to-date level on record. With 1,178 deals this year and total value of $229 billion, activity on the oil & gas M&A has nearly doubled year-to-date compared to $114.6 billion from the same time last year.

*****

--Elsewhere in Asia M&A, this week China is leading a consortium trying to put together a buyout of resource company Potash to trump BHP Billiton's $38.6 billion hostile offer.

--This week also saw a $1 billion initial public offering from China-based Ningbo Port. But for the whole week, there were only four global IPOs, the lowest weekly number of offerings since the week of May 31, 2009.

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