The report's authors see a reduction in the second half of the year as an effect of the pandemic, but expect the re/insurance transactions to make a comeback in 2021.
Here are the key stats of the report:
- Slowdown in mega deals
- There were 6 deals in H1 2020 valued at over USD 1.0 billion;
- There were 20 in the whole of 2019;
- Mix of big spenders
- 12 acquiror nationalities among the top 20 largest deals by value;
- US has six of the top 20 deals, UK, Italy and Canada two each;
- France leads the way
- La Banque Postale's takeover of CNP Assurances for USD 6.3 billion was the largest deal of H1 2020;
- Cross-border activity continues
- There were 50 completed cross-border deals in H1 2020, 24.9% of the global total;
- 33 of 50 cross-border deals were intra-region - 66.0%.
"What might targets look like in the next six months, one year or five years? How will Covid-19 impact the availability of financing? And how confident can buyers be in their own businesses before they turn their sights to M&A? The market is not at a standstill, but strategic and financial buyers are putting heightened focus on deals that make sense to them," concludes the report.
As for many re/insurance businesses the pandemics impact will lead to a reconsideration of the future strategies, Clyde & Co's analysts expect to see "an increased number of targets being offered for a sale and a greater interest in legacy business" in 2021.
Looking at the 1H2020 statistics, Europe shows a stark picture, "with the shadow of Brexit combined with difficulties in reaching valuations pushing transactions to a three-year low."
Overall, "the impact of Covid-19 has accelerated the market hardening that was already underway, presenting opportunities for organic growth that could depress appetite for M&A."
'Insurance Growth Report 2020' - read the full report