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Unhurried Pace of M&A Reflects Market Trends: SNL Securities Announces First-Half Financial Institution M&A Review.

CHARLOTTESVILLE, Va., July 10 /PRNewswire/ --

The following has been issued by SNL Securities:

Reflecting the general slowdown in the market and reluctance among buyers to add transaction-oriented businesses to their mix under current conditions, M&A activity across the financial services sectors during the first half of 2001 lagged behind deal levels from the year-ago period. While several billion dollar-plus deals in the securities and investments, banking, insurance and specialty finance industries had a ballooning effect on aggregate deal values within those sectors, the trend in activity was decidedly downward, with only securities and investments posting a mild increase compared to the first six months of 2000.

M&A among banks and thrifts, for instance, accounted for 108 deals in the first half of 2001 compared to 131 deals for the same period in 2000. But deal value, fueled by major plays by large-cap companies, exceeded the previous first-half total: $32.7 billion compared to $14.5 billion for the first six months of 2000.

In insurance, deals dipped to a total 136 during the first half of this year compared to 170 for the year-ago period. But the half will be remembered for something else: American International Group Inc. announced the biggest deal in insurance history with its $23.4 billion plan to acquire American General Corp. The other top deals for the period were also in life and health, with four exceeding $1 billion deal value. In total, insurance deals for the period were valued at $56.2 billion.

Specialty finance companies did not apparently have much appeal for buyers through the second quarter of this year. Fifty-two deals were announced, down 36% from the year-ago half. Of those, more than half were mortgage-related transactions. But even sluggish specialty lending found its way into the record books when industrial giant Tyco International Ltd. made its $9.6 billion bid for commercial lender CIT Group Inc. That transaction skewed deal value for the first half, pumping it to $12.3 billion, compared to $3.2 billion for the first half of 2001.

For securities and investment firms, the trend was reversed: the 97 deals during the first half represented a 12% increase over last year's activity. Deal value, however, was a humble $7.0 billion, less than a third of the year- ago period's $24.5 billion. Among transactions in the sector, asset managers were the preferred targets as they promise the fee-based revenue that buyers find so alluring under bearish market conditions.

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Publication:PR Newswire
Date:Jul 10, 2001
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