NEW YORK - International mergers among investment banks and other financial services firms are booming, reports KPMG Peat Marwick.
Banks, insurance companies, and real estate firms figured prominently in the surge in cross-border activity during the first half. They announced 469 such deals, worth $20.8 billion, up from 417 worth $12 billion in the year-earlier half.
The quarterly study by KPMG found the biggest increase among all industries had occurred in financial services, boosting it to the No. 3 spot in number and value of deals. The manufacturing, retailing, and distribution industry announced 1,671 deals, worth $54.5 billion, to rank first. Information, communications, and entertainment ranked second with 490 deals, worth $24.3 billion.
"The boom in cross-border financial services mergers and acquisitions is tangible evidence that banks through restructuring and consolidation are a linchpin in the globalization of economies," said Michael J. Turillo, partner in charge of KPMG Financial Services-Capital Strategies, which offers strategic and investment banking services to financial institutions.
"The greatest, most immediate need is to provide equity for privatization and the expansion of business," he said. To provide that equity, Mr. Turillo said, the most active sector was investment banking, which saw 122 international transactions, worth $9.7 billion, in the first half of 1995.
Continental European banks seeking more capital to compete and bigger roles in mergers and acquisitions, equity sales, privatization, and trading have bought several British investment houses. ING of the Netherlands spent $1 billion to buy Barings, and Swiss Bank paid $1.4 billion for the investment banking business of S.G. Warburg.
"There will continue to be significant cross-border M & A activity at the regional level: First, within Europe, between the U.S., Canada, and Mexico; and Asia-Pacific; and then we will see financial institutions in each of those regions targeting developing economies in Asia and Eastern Europe," Mr. Turillo said.