Though merger and acquisition (M&A) activity by Middle East and African banks in 2017 may not have reached the dizzy heights of the previous year, there were nonetheless a number of standout transactions. Chief among them was the acquisition of UK challenger bank Aldermore by South Africa’s FirstRand Limited. The deal, which was announced in November 2017, was valued at $1.4bn. Not only does it represent one of the largest acquisitions in the UK made by an African lender, it is also one of the largest deals executed by a South African financial institution outside its home market in recent years.
But the acquisition is notable for more than just its size. First, it indicates that non-European banks still have an interest in the UK market despite rising uncertainty around the country’s Brexit negotiations. It also adds to the gradually increasing number of mergers and acquisitions in the UK banking market in recent years. This includes Spanish lender Banco de Sabadell and its £1.7bn ($2.37bn) acquisition of TSB in 2015, as well as a private equity buyout of Shawbrook Bank in 2017 by BC Partners and Pollen Street Capital.
