Magazine article American Banker

Banking Giants Edge out Street in M&A Rankings

Magazine article American Banker

Banking Giants Edge out Street in M&A Rankings

Article excerpt

Second-quarter rankings of the top advisers on mergers and acquisitions show dramatic shuffling among the top 10 global arrangers -- an indication that the universal banking model could be paying off.

J.P. Morgan Chase & Co. topped the worldwide announced M&A deal table in the period, followed by UBS Warburg and Citigroup Inc.'s Salomon Smith Barney unit, according to Thomson Financial Securities Data, which released the rankings Tuesday.

The more traditional Wall Street firms did not fare as well. The industry stalwart, Goldman Sachs Group Inc., which placed first in the year-earlier period, fell to fourth. Last year's No. 2, Merrill Lynch & Co., dropped to No. 10. And Morgan Stanley, which was third last year, slid four spots.

One quarter does not a trend make -- particularly one in which so few deals got announced. The dollar amount for announced global M&A in the three months dropped 27.6% from the year-earlier period, to $330.5 billion, and the number of deals fell 31.2%, to 5,575, according to Thomson Financial.

There are dangers in reading too much into the data, said Mark Constant, a Lehman Brothers analyst who covers investment banks. Announced deals do not always get completed, he noted, and the league tables, as the rankings are known, include situations where a company involved in a deal adds a bank to its list of advisers not for providing advice, but as a payback for a loan or other transaction.

Of Morgan Chase's 77 deals for the quarter, which totaled $64.4 billion, two did the most to boost the company's ranking. It was a co-adviser for Lattice Group PLC, a U.K. gas utility company, on its $18.4 billion sale to National Grid Group PLC. The deal, announced in April, was the largest in the world for the first half of the year, according to Thomson Financial.

Morgan Chase also co-advised NTL Inc., a U.S.-based communications services firm, on its $10.6 billion acquisition by bondholders. That deal, the fourth largest in the first half, was also announced in April. …

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