2018年-普华永道全球_Financial_servicesInsurance_deals_insights_Q1_2018_4页_629kb

PwC Deals Summary: US Financial Services Q1 2018

Core Content

In the first quarter of 2018, the US financial services sector experienced a notable surge in deal value, reaching $72.3 billion, which was more than double the previous quarter and 35% higher than the same period in 2017. This marked the highest deal value in over two years. While the deal volume was 12% lower compared to Q1 2017, the 423 announced deals represented a 5% increase from Q4 2017.

Main Trends and Highlights

1. Asset and Wealth Management

• 35 deals were announced with a total disclosed value of $246 million.
• The sector has seen a long-term trend toward consolidation, primarily driven by RIA roll-ups.
• Regulatory changes, including the DOL Fiduciary Rule and the SEC's Standard-of-Conduct rules, have further fueled activity in wealth management.

2. Banking and Capital Markets

• Five deals over $1 billion were announced, accounting for 69% of the total deal value of $16.3 billion.
• This was a significant increase from seven such deals in 2017.
• Notable transactions include:
  • CME Group's $5.4 billion acquisition of Nex Group
  • Banco Popular de Puerto Rico's $1.7 billion acquisition of Wells Fargo's Auto Finance Business
  • WMIH Corp's $1.6 billion acquisition of Nationstar Mortgage Holdings Inc
  • Apollo Global Management LLC's $1.4 billion acquisition of OneMain Holdings, Inc
• Community and regional banks continue to be a key source of M&A activity, with most remaining deals valued below $500 million.

3. Insurance

• 8 deals were announced, totaling $26.9 billion, a 383% increase from Q1 2017.
• The surge was driven by two large transactions:
  • AXA's $15.4 billion acquisition of XL Group
  • AIG's $5.6 billion acquisition of Validus
• The tax reform legislation passed in December 2017 is expected to increase private equity interest in the insurance sector due to lower corporate tax rates.
• Insurers are likely to continue divesting legacy blocks, especially variable annuity (VA) blocks, which are being sold due to market volatility, accounting changes, and diminished scale.

Key Insights

• Megadeals played a crucial role in driving Q1 2018 deal value, with four deals totaling $43 billion.
• The SEC's proposed rules on broker-dealers and retail investors are expected to increase M&A activity in wealth management.
• Private equity is actively pursuing opportunities in the insurance sector, especially with the lower corporate tax rate.
• Legacy VA blocks are a significant area of interest, with Hartford, Voya, and MetLife leading the way in divestitures.
• The alternatives sub-sector is under pressure to innovate, with hedge funds facing challenges in justifying their fee structures.
• Minority interest investment platforms have raised substantial capital, indicating continued deal activity in the future.

Outlook

• Clarity from tax reform is anticipated to accelerate smaller deals in the coming year.
• Regulatory changes and market pressures are expected to continue driving consolidation in the financial services sector.
• Strategic M&A remains a key focus for firms looking to expand capabilities, diversify portfolios, and extract value from their investments.

Contact Information

• Greg Peterson – US Financial Services Deals Leader
  Email: gregory.j.peterson@pwc.com
  Phone: +1 (646) 818-7983

• Scott Carmelitano – US Banking and Capital Markets Deals Leader
  Email: scott.j.carmelitano@pwc.com
  Phone: +1.213.308-2892

• John Marra – US Insurance Deals Leader
  Email: john.p.marra@pwc.com
  Phone: +1 646 818 7870

• Gregory McGahan – US Asset and Wealth Management Deals Leader
  Email: gregory.mcgahan@pwc.com
  Phone: +1 646 818 7896

About PwC Deals

PwC's Deals Practice offers integrated M&A solutions tailored to the unique needs of financial services companies and private equity firms. With a global team of over 20,000 deal professionals, they provide strategic advice, due diligence, transaction structuring, and post-deal support. Their services cover the full lifecycle of M&A, from identifying opportunities to capturing value post-transaction.

For more information, visit PwC Deals.