Following two subdued years, mergers and acquisitions (M&A) activity in financial services rebounded strongly in 2024, driven by significant deals in the insurance and alternative asset management verticals, new data released by Pitchbook show.

In 2024, a total of 3,422 deals were announced or completed, worth an aggregate deal value of US$469.8 billion. The figures represent an 8.8% year-over-year (YoY) increase in deal count, and a remarkable 43% surge in total deal value.

The insurance segment played a critical role in this rebound, producing multiple deals over US$1 billion. In Q4 2024, insurance broker Arthur J. Gallagher and Co. acquired AssuredPartners for a staggering US$13.5 billion, marking the quarter’s largest deal in financial services. This acquisition aims to expand Gallagher’s retail middle-market property, casualty, and employee benefit focus across the US.

Another significant transaction was Aviva’s US$4.6 billion acquisition of Direct Line Insurance Group. This deal seeks to create one of the UK’s largest home and motor insurers, aligning with Aviva’s larger effort to expand in its core markets of Britain, Canada and Ireland.

Alternative asset management was another key segment in financial services, witnessing a surge in dealmaking as firms consolidated to expand their offerings and scale operations. One of the largest deals in the sector in 2024 was BlackRock’s acquisition of private credit manager HPS Investment Partners for US$12 billion. The deal, announced in December, aims to integrate HPS’ US$148 billion in assets under management (AUM) into BlackRock’s private credit division, creating a franchise with approximately US$220 billion in client assets.

Another major deal in the sector is the acquisition of GCP International, the international business of GLP Capital Partners (excluding its operations in Greater China) by Ares Management for US$3.7 billion. The deal aims to create a real estate alternative asset manager with approximately US$96 billion in combined AUM, cementing Ares’ leadership in the alternative real estate space.

Global M&A rebounds

In 2024, global M&A activity achieved robust growth, driven by more supportive macroeconomic conditions and stabilizing valuations. Deal value surpassed US$3.7 trillion across 45,191 transactions, representing a YoY increase of 19% in value and a 14% YoY growth in deal count.

Europe fully recovered from the subdued levels seen in 2021 and 2022, which were marked by monetary tightening, with M&A deal value growing 29.2% YoY and deal count growing 17.5%. The region recorded nearly 20,000 deals, marking the highest level of estimated M&A deal count in a decade.

On a sector basis, the IT segment stood out, emerging as a clear driver of the deal recovery. IT deal value surged 46.3% YoY to US$740.7 billion in 2024, while deal count increased 12.2% YoY to 7,455 transactions. Investors demonstrated a notable flight to quality, favoring resilient business models with strong growth potential.

Fintech M&A activity and predictions

Similarly, fintech M&A witnessed a significant upswing. Total transaction value reached US$183.1 billion in 2024, up 79% from US$102.2 billion in 2023, according to Financial Technology (FT) Partners, a fintech-focused investment bank. The number of deals also rose, growing 25% from 1,124 transactions in 2023 to 1,405 transactions in 2024.

Financial management solutions led fintech M&A activity with 386 transactions (27%), followed by banking and lending tech with 250 transactions (17.8%), and wealth and capital markets with 220 deals (15.7%).

Industry experts predict that the M&A momentum will carry on in 2025. Arvin Abraham, a partner in Goodwin’s private equity group, attributes this trend in part to the continued cleanout of pandemic related overfunding.

“Many companies that experienced rapid growth during the digital finance boom are now struggling to sustain their momentum, creating opportunities for distressed acquisitions,” Abraham says. “Strategic acquisitions, particularly in payments, cybersecurity, and lending, will also dominate headlines.”

PwC highlights Latin America (LatAm) as an emerging hotspot for fintech M&A. The region’s fintech sector has risen substantially over the past years, increasing by 340% since 2017 to now more than 3,000 companies. With initial public offerings (IPOs) on hold and reduced venture capital (VC) funding, LatAm fintech companies are improving operational efficiency, making them attractive for M&A, the firm says.

Digital payments and remittances, digital lending, and business process management and analytics stand out as the most promising fintech segments for M&A in 2025.

Digital payments and remittances is the largest fintech segment, accounting for slightly more than one-fifth of all fintech companies in LatAm. In this sector, companies are pursuing acquisitions to gain capabilities such as cross-border and local payments, and enter new geographic markets.

Similarly, digital lending, which accounts for slightly less than one-fifth of LatAm fintech companies, is witnessing increased M&A activity. Financial companies are looking to integrate artificial intelligence (AI) into lending and credit assessment processes, fueling strategic acquisitions in the vertical.

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