Will we see more mergers in the financial sector?
While the financial sector has been the main recipient of various mergers and takeovers during the last few months there is a feeling that we may well see further mergers and acquisitions in 2009. Many people believe that 2008 saw the top of the mergers and acquisitions market as a means of ensuring the smooth running of the financial markets at a time when liquidity and capital assets were under immense pressure.
In reality deals such as the Lloyds TSB and HBOS merger were forced upon the sector as was the change in ownership of Northern Rock and Bradford & Bingley. If as suspected we see credit crunch part two in 2009 there is every chance we will see mergers of a similar size and larger not only in the financial sector but many other areas of UK commerce. There are potentially enormous cost savings to be made by merging two similar businesses not to mention the accumulation of the various asset bases to produce a sounder foundation for the future.
A number of UK businesses will also come under severe pressure from their bankers to merge with competitors and those in similar industries as a means of cutting costs to the bone.
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