Economies of scale, synergies, access to resources, cost-effective alternatives, access to talent and tax benefits are the key benefits of mergers and acquisitions (M&A).
Cross-border deals also offer geographic expansion, access to new markets and diversification; however, they are seen as more complex transactions, which explains why domestic deals outnumber the cross-border ones in several sectors including financial services.
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Nevertheless, Investment Monitor has identified five cross-border deals that have been key for the financial services market in 2022.
Royal Bank of Canada acquires Brewin Dolphin
Royal Bank of Canada (RBC) acquired the wealth management firm Brewin Dolphin for £1.6bn (C$2.67bn) in 2022.
Brewin Dolphin, which will continue to be led by CEO Robin Beer, will operate as RBC Brewin Dolphin following the acquisition. As a result of this deal, RBC will expand its positions in the UK.
“Bringing together these complementary teams will establish and secure RBC Wealth Management’s position as a leading wealth manager in the UK and Ireland, while also providing future growth opportunities in an attractive and consolidating market,” said Doug Guzman, group head of RBC Wealth Management, RBC Insurance and RBC Investor & Treasury Services, in a press release. “This platform enhances our franchise’s global brand, scale and stability, as we strengthen our leading position across North America and now the UK.”
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By GlobalDataShift4 enters agreement to acquire Finaro
Shift4, the US fintech company, has entered an agreement to acquire the Israeli cross-border payment provider Finaro in a deal worth $575m.
The press release states: “Finaro will provide the global infrastructure and cutting-edge technology needed to drive Shift4’s international ambitions to deliver a unified commerce experience. By integrating Finaro’s capabilities, Shift4 will be able to expand the company’s current services around the world.”
Global expansion, cross-selling opportunities and access to high-growth European e-commerce markets are only some of the indicators explaining the strategic rationale behind this acquisition.
Franklin Resources acquires BNY Alcentra Group Holdings
Franklin Resources, the US-headquartered investment management firm operating as Franklin Templeton, acquired the UK-based BNY Alcentra Group Holdings in 2022, from BNY Mellon. Alcentra, which is a credit and private debt manager, specialises in senior secured loans, high-yield bonds, private credit, structured credit, special situations and multi-strategy credit strategies.
Due to this acquisition, Franklin Templeton’s US alternative credit specialist investment manager, Benefit Street Partners, is set to expand its alternative credit capabilities and presence in Europe. On top of that it will double its assets under management to $77bn globally.
Sagicor enters agreement to acquire Ivari
Sagicor Financial Company, a financial services provider based in the Caribbean with a growing presence in the US, announced that it was entering into a definitive agreement to acquire Ivari in August 2022. However, the $325m acquisition is set to close in 2023, subject to regulatory approvals.
Toronto-headquared Ivari, which provides individual life and critical illness insurance solutions for the Canadian middle-market, is a subsidiary of Wilton Re.
The press release states: “The acquisition of Ivari aligns with Sagicor’s business strategy of growing in individual life insurance and diversifying into adjacent geographic markets.”
Fireblocks acquires First Digital
Fireblocks, the US-based blockchain security service provider, acquired the Israel-based stablecoin and digital asset payments technology platform First Digital for $100m in 2022.
The acquisition is set to help Fireblocks expand its payments offering, creating a suite of tools that integrates digital asset treasury operations with day-to-day financial activities. More specifically, the press release states that the “acquisition will help support and grow our payments offering by allowing payment service providers and acquirers to accept payments and make payouts in digital currencies”.
