Deal cancellations hit finance giants
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Reuters
Oluşturulma Tarihi: Aralık 24, 2008 00:00
NEW YORK - Most investment bankers would like to forget about the disastrous year that was 2008 - even as they think about the fees that could have been.
More deals were withdrawn in 2008 than ever before, and with overall mergers and acquisition activity down 35 percent around the world, you can bet bankers would like those deals back.
Over 1,100 deals were canceled during the year, up from just under 800 in 2007, according to Thomson Reuters data.
The total value of withdrawn deals for 2008 was nearly $800 billion, and banks lost more than $815 million in fees. Some of the notable ones included BHP Billiton’s $188 billion offer for Rio Tinto, the proposed buyout of Canadian telecommunications giant BCE by a group of private equity firms and Microsoft’s unsolicited bid for Yahoo.
And who were the biggest losers from all the nixed transactions? The biggest winners overall, as it turns out.
Millions of dollars lost
JPMorgan Chase, which took the second spot in the worldwide M&A rankings for 2008, lost the most fees from canceled deals during the year. Thomson Reuters estimated that withdrawn deals that the bank was working on could have brought in $72.6 million in fees.
Goldman Sachs Group, which topped the worldwide M&A rankings, took second place for withdrawn M&A, losing out on an estimate $63.7 million.
Morgan Stanley, Citigroup and Lazard rounded out the top five for lost fees from withdrawn deals.
While the record level of failed deals hurt in 2008, James Stynes, global chairman of mergers and acquisitions at Deutsche Bank Securities, said things can only get better next year.
"What drove the cancellations was unexpectedly dramatic gyrations in various markets - credit markets, stock markets. That has already happened," Stynes said."People will strike deals with the knowledge that credit is extraordinarily scarce and the market is very volatile. They will anticipate that, and therefore deals that get struck are more likely to be structured in a way that they take these issues into account," he said.
Over 1,100 deals were canceled during the year, up from just under 800 in 2007, according to Thomson Reuters data.
The total value of withdrawn deals for 2008 was nearly $800 billion, and banks lost more than $815 million in fees. Some of the notable ones included BHP Billiton’s $188 billion offer for Rio Tinto, the proposed buyout of Canadian telecommunications giant BCE by a group of private equity firms and Microsoft’s unsolicited bid for Yahoo.
And who were the biggest losers from all the nixed transactions? The biggest winners overall, as it turns out.
Millions of dollars lost
JPMorgan Chase, which took the second spot in the worldwide M&A rankings for 2008, lost the most fees from canceled deals during the year. Thomson Reuters estimated that withdrawn deals that the bank was working on could have brought in $72.6 million in fees.
Goldman Sachs Group, which topped the worldwide M&A rankings, took second place for withdrawn M&A, losing out on an estimate $63.7 million.
Morgan Stanley, Citigroup and Lazard rounded out the top five for lost fees from withdrawn deals.
While the record level of failed deals hurt in 2008, James Stynes, global chairman of mergers and acquisitions at Deutsche Bank Securities, said things can only get better next year.
"What drove the cancellations was unexpectedly dramatic gyrations in various markets - credit markets, stock markets. That has already happened," Stynes said."People will strike deals with the knowledge that credit is extraordinarily scarce and the market is very volatile. They will anticipate that, and therefore deals that get struck are more likely to be structured in a way that they take these issues into account," he said.