IT’S been a good few days for some of the world’s investment banks, with merger mania hitting the stock exchanges, the final consummation of the drugs merger between Sanofi-Aventis and US biotech firm Genzyme and then yesterday’s £1.3bn spirits bid from the drinks group Diageo.
It’s not quite an unrestrained takeover environment but it certainly feels like things are picking up for those making a living out of M&A.
In Sanofi’s agreed $20.1bn merger with Genzyme there was massive relief since it took nine months to close the deal. After last year’s abortive megadeals by Prudential for AIA and BHP for Potash, there is always going to be nervousness that a deal such as Genzyme might hit the buffers. Credit Suisse, in particular, the bank that led the Prudential’s quest for AIA, must have been pleased to get a result as one of Genzyme’s bankers – fees for the Sanofi Genzyme transaction are estimated at around $125m.
On the exchanges front, one mystery was cleared up last week when JP Morgan was selected to advise Deutsche Boerse in its bid for NYSE Euronext.
Many had wondered why JP Morgan, as joint broker for the LSE, had not been included on its deal to buy Canada’s TMX. The Deutsche Boerse appointment provides the answer since JP Morgan would have been unable to work for both clients in such closely related deals.
There is no such clear reason as to why LSE chief executive Xavier Rolet omitted Nomura from his team of advisers. The Japanese bank was joint broker along with JP Morgan but found itself on the sidelines when it came to selecting a team.
Nomura sources say the relationship between the two organisations remains strong and point out that under William Vereker the investment banking team is building up clients and mandates.
Others worry about a steady trickle of departures from the team, with some following Christian Meissner to rivals Bank of America Merrill Lynch.
Barclays Capital, which did feature on the LSE’s list of advisers, is also the adviser of choice for Justice, a cash shell IPO, and the proposed deal between BATS and Chi-x is being advised by two specialist players in the industry, Lexicon Partners and Beech Hill Securities. UBS and HSBC are Diageo’s advisers on the Turkish deal.
As the deals begin to proliferate, they leave fees and hope for more deals, in their wake.