The EU is reportedly weighing curbs on national powers to block mergers to help European companies build the scale to compete with China and US rivals.
The proposed reforms reflect growing frustration in Brussels that capitals intervened in a series of significant corporate deals, often to protect national champions at the expense of the single market.
Hyder Jumabhoy, Partner at international law firm White & Case LLP and Global Co-Head of its Financial Institutions Industry Group and EMEA Co-Head of its Financial Services M&A practice, said:
“This would be a welcome move for the bloc as it looks to strengthen its competitiveness and support the development of pan-European champions that can compete globally. This is particularly timely for the banking sector, where we expect a significant uptick in M&A activity.
“The top 20 European banks have built up a $600 billion war chest over the last three years, and while some of this excess capital will be returned to shareholders, M&A remains a primary deployment option. Many of Europe’s largest lenders are finally free from the shackles of government ownership, in place since the global financial crisis, while fragmented European banking markets, particularly across Germany, Italy, Spain and Poland, are ripe for consolidation. Digital transformation also remains a key driver of acquisition activity, with many banks focused on acquiring best-in-class technology businesses.”
