Euro-gigantism

Last year there was a huge leap in mergers and acquisitions within the European financial sector. The total value of deals was $107.4 billion, compared with $48.6 billion in 1996 and $46.9 billion in 1995 (according to figures from AMDATA). Last year, roughly one-third of all European M&A deals were in the financial sector. They encompassed financially-driven mergers within domestic markets designed to cut costs; more strategic cross-border deals, as banks with large shares in their own domestic markets sought to expand across Europe; and a growing number of deals between banks and insurance companies.

It's a safe bet that in the final year before the introduction of the euro bank mergers will continue apace throughout 1998. Not surprisingly, financial institution group (FIG) teams at investment banks, which advise...