Legal and Finance: Alliances and Organic Growth Gain Support
The global financial services industry favours strategic alliances over mergers and acquisitions, although growing organically remains the preferred way to build shareholder value, a survey has shown.
The survey by accountancy firm Arthur Andersen found customers and products as the main reason for corporate alliances in financial services rather than as a way to address internal weaknesses in skills, technology or organising finance.
'The key message we are seeing is the change from traditional mergers and acquisitions activity to very planned and very well-executed strategic alliances that draw value-added best practices,' Mark Powell, associate director business consulting at Arthur Andersen, said.
The survey found that strategic alliances helped corporations fend off would-be acquirers as well as enabling them to broaden their product offerings and extend geographic reach.
The report was based on a survey of 310 senior executives at top financial institutions throughout the world.
More than two-thirds of those polled had in the past two years undergone a corporate combination - merger, acquisition, strategic alliance or selling/outsourcing part of their business.
Jeff Pirie, Arthur Andersen's director of corporate finance, said 80 per cent of financial services investments took place in the US, Europe and Japan, with five South-east Asian countries accounting for less than two per cent of the total. …