Chase Cements Latin Investment Banking Role
Kraus, James R., American Banker
When Chase Manhattan Corp. agreed last month to buy Robert Fleming Holdings Ltd., the U.S. banking company flew a team of senior executives to London to celebrate.
Brian O'Neill, chairman of Chase's Latin American operations, was not one of the group. Instead he immediately set off in another direction, flying southward to meet the Latin specialists staffing Fleming offices in Mexico City, Lima, Rio de Janeiro, and Bogota. Fleming has 150 or so of these specialists, including some in New York.
For Chase, investment banking in Latin America is a significant component of its effort to establish itself as a global financial powerhouse with a comprehensive range of services for big corporate clients. Five years after its entry into the investment banking business in Latin America, it is reaping rewards that Mr. O'Neill says are already reflecting the addition of the Fleming team.
"They have a small but well regarded team in Latin America and a solid network of offices," says Mr. O'Neill. "That dovetailed very nicely with our own operations, and we're already starting to get the benefits."
Rankings just released by Thomson Financial Securities Data credited Chase with advising on nearly $4 billion of Latin mergers and acquisitions in the first quarter, making it the third-biggest player in the region after Morgan Stanley Dean Witter and Goldman, Sachs & Co.
That's almost as much as Chase handled in Latin America all of last year and nearly twice its $2.4 billion worth of deals in 1998. Among some recent deals Chase handled: an Argentine investment consortium's acquisition of Swift Armour S.A., the local subsidiary of Illinois-based meal and poultry company Armour Swift-Eckrich Inc. The banking company also advised on Grupo Mexico's $2.25 billion acquisition of Asarco Inc., the New York metals and mining company, as well as on the joint acquisition by Newark, N.J.-based PSEG and Sempra Energy of a 90% stake in Chilquinta Energia S.A., a Chilean energy company.
All the business has pushed Chase ahead of some traditional powerhouses in Latin America. J.P. Morgan & Co was ranked sixth in the first quarter, with $1.4 billion of deals, and Citigroup's Salomon Smith Barney unit was ranked seventh, with $708 million.
J.P. Morgan officials were not available to comment. Adolfo Rios, head of Latin American mergers and acquisitions at Salomon Smith Barney observed that first-quarter rankings were distorted by some unusually large individual deals.
"We are reinforcing our position in Latin American M&A, and what we care about are annual, not quarterly, results," Mr. Rios said. Given transactions the company has in the pipeline and expects to conclude soon, he added, "we are going to wind up in a very good position by yearend."
Analysts, though agreeing that one quarter does not make a trend, said they see signs that Chase is no longer an also-ran. Raphael Soifer of Soifer Consulting said that more time is needed to assess Chase's place in the business. …