(February 26 – 11:10 ET) – New research from accounting firm Arthur Andersen finds that most financial services firms prefer strategic alliances with other firms to outright mergers or acquisitions, according to an article in the Financial Times.

The newspaper cites new research from the accounting firm, which surveyed more than 300 executives from some of the world’s leading financial services firms. The Arthur Andersen survey found that 64% of respondents believed strategic alliances were the best form of corporate combination to provide them with access to new customers and broader product ranges without the disruption of mergers. While more than 50% see organic growth as the preferred option, about 69% had participated in some sort of deal in the past two years.

Among the survey’s other findings, 41% of respondents said they were involved in deals as a defensive move; 25% enter deals in response to changes in the competitive landscape; and 9% were motivated by regulatory change.

Almost all the respondents expect to see deals remain within the financial industry, not alliances with retail firms or other sorts of businesses. Almost 75% are looking for cross-border deals.

Chris Mills, a partner at Arthur Andersen, told the FT, “As financial services become more and more of a technology play, we expect to see the blurring of industry lines and barriers, enabling cross-sector deals to become more prevalent.”

Despite the apparent appeal of alliances to executives, Mills noted, “Alliances are not an easy option. They do not give exclusive ownership of the assets, or address internal weaknesses, and terms can be difficult to work out.”
-IE Staff