New surge of bank mergers and acquisitions. Research by PwC entitled “Sharing Deal Insight”, reveals that mergers and acquisitions in the European financial services industry shot up in the fourth quarter of 2011 by a huge 330% from €5 billion in value in Q311 to €16.5bn in the fourth quarter. This amounts to 74% growth compared with the €9.5bn of mergers and acquisitions in Q410. PwC says there are two main reasons for the surge in mergers in Q411. Firstly, the return of transactions by state authorities (like the nationalisation of Dexia Bank Belgium and the splitting up of Northern Rock by the UK government, together with a range of deals in Sweden, Switzerland, Luxembourg and the United Kingdom) and secondly, the rising numbers of medium-sized mergers, which rose from €2.6bn in Q311 to €5.9bn in Q411, due to a number of bank restructuring moves, like the sale of Dexia Banque Internationale in Luxembourg. Despite the rise, however, the total annual value of mergers in 2011 was 25% down on 2010 and at its lowest level since 2003 (€37.9bn compared with €50.3bn in 2010). PwC says that the level of mergers and acquisitions in the financial services industry is difficult to predict for 2012, although the figures for Q411 are close to a record high and the situation remains favourable. Political, economic and financial uncertainty persists in the financial world, which is encouraging businesses to take a cautious approach. The financial establishments that have done well in the crisis are expected to be on the look out for targeted acquisitions, while the more vulnerable are likely to restructure their business and sell off various assets. (IL/transl.fl)