NatWest to Acquire Wealth Manager Evelyn in £2.5bn Deal

NatWest Group is progressing towards a £2.5 billion acquisition of Evelyn Partners, a significant player in the wealth management sector. This acquisition marks NatWest’s largest corporate takeover since its government bailout in 2008. The bank, which regained full private ownership last year, is currently in advanced discussions to purchase Evelyn Partners from its private equity owners.

Details of the Acquisition

The negotiations have intensified recently, with NatWest reportedly fending off competition from Barclays. New bids were submitted last week, but NatWest is poised to secure the deal.

• Anticipated payment range: £2.5 billion to £3 billion
• Evelyn Partners offers extensive wealth management services to numerous clients
• Announcement of the deal expected early next week

Strategic Importance for NatWest

Acquiring Evelyn Partners will bolster NatWest’s services in wealth management, an area emphasized by CEO Paul Thwaite as critical for the bank’s future. This move aligns with NatWest’s ongoing simplification efforts, which began following Thwaite’s leadership commencement in 2023.

The purchase is seen as a logical step for NatWest’s Coutts division, aiming to strengthen its offerings to affluent customers. Although the deal’s price tag is substantial, it remains modest compared to NatWest’s market capitalization of approximately £52 billion. The bank’s share value has soared nearly 50% over the past year.

Market Context and Competitors

Barclays also expressed interest in acquiring Evelyn, but retreated when faced with NatWest’s competitive bid. Although the Royal Bank of Canada was rumored to be interested, no official bid was confirmed recently.

• Evelyn Partners managed about £65 billion in assets as of last August
• Increased corporate activity noted in the wealth management industry

The ongoing growth in this sector is attributed to demographic shifts and the push towards long-term saving and financial planning. Other firms, such as Canaccord Genuity, are seeking buyers, with expectations of over £1 billion for their wealth arm.

Leadership and Background of Evelyn Partners

Should the acquisition proceed, Paul Geddes, Evelyn’s chief executive, could see a return to NatWest, where he previously worked as the head of its insurance division. Evelyn Partners resulted from the 2020 merger between Tilney and Smith & Williamson, facilitated by private equity firms Permira and Warburg Pincus.

Recently, Evelyn’s professional services subsidiary was sold to Apax Partners, indicating a dynamic corporate landscape for the firm.

The acquisition process is being managed by Evercore, although neither NatWest nor Barclays has publicly commented on the negotiations.