M&A volumes grow fastest in financial sector

MergingThe volume of mergers and acquisitions in the financial sector has more than tripled since the financial crisis, says research by S&P Capital IQ.

The data provider, which classifies real estate as part of the sector, says financials now account for more than a quarter of the transaction value of mergers and acquisitions it tracks.

The financial sector seems to have outpaced utilities as the fastest growing M&A sector. Before the financial crisis, deal volumes in the utilities sector rose fast, leaping from 383 deals in 2004 to 977 deals in 2007. Since then, growth in deal volumes in this sector has slowed.

“Moving into the post-crisis era, it appears that utilities continues to grow but at a much slower pace than its financials counterpart,” says Vickesh Mistry, senior modelling specialist, S&P Capital IQ.

"Telecommunication services experienced the most significant contraction as the number of deals plummeted from a pre-crisis peak of 196 deals to a low of only 87 deals during Q2 2009," adds Mistry. "As this is a low volume sector, it has struggled to recover as appetite and funding for mega deals evaporated,as noted from the period of inactivity in mega deals between 4 December 2008 and 3 December 2009.

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