| The beginning of the year promises profits for US investment banks In the first five weeks of this year, three mergers and acquisitions were announced in the United States, each worth more than $10 billion. This is the best result for the industry since 2000. Participation in these transactions led to some regrouping of leading companies - consultants in the mergers and acquisitions market, which was recorded by Bloomberg. The leader, however, has remained the same - Goldman Sachs Group Inc., which has not given up its position since 2000.
Since the beginning of this year, mergers and acquisitions transactions totaling $150 billion have been concluded in the American market, which is 32% higher than the first five weeks of last year. Judging by the pace taken, analysts predict that the maximum volume of transactions recorded in 1999-2000 will soon be reached. The biggest contributors to the current rise were Procter & Gamble's $57 billion purchase of Gillette, the second-largest U.S. regional telephone operator SBC Communications Inc's $16 billion acquisition of its former parent AT&T and the acquisition of life insurance giant MetLife. Citigroup's insurance division, Travelers Life & Annuity, for $11.5 billion. The income of investment banks from these three largest transactions alone is estimated by Bloomberg at $165 million. For these banks, a successful start to mergers and acquisitions has always been a signal for the start of a profitable year. The second and third places among successful consultants, according to Bloomberg, are now occupied, respectively, by Merrill Lynch & Co. and UBS AG. The first company rose from last year's sixth place thanks to its role as a consultant for Procter & Gamble. And the second, from ninth place, entered the top three for the first time in its history, having organized the sale of Gillette together with Goldman Sachs. The world's largest broker, Merrill Lynch, whose share capital is about $115 billion, was in the top three consultants for the first time since 2001. But Citigroup dropped out of this top three, losing seven positions and falling to tenth place. Of course, changes in the ranking of the most successful investment banks at the end of this year are possible. However, Bloomberg notes that since 2000, of the three leading companies based on the results of the first five weeks, two remained so until the end of the year.
Bloomberg analysts have no doubt that investment consultants will have enough work to do this year. In their opinion, some of the large transactions that have already taken place will entail new merger processes. Thus, SBC's purchase of AT&T may accelerate the decision of another telecommunications concern, Qwest Communications International Inc., to acquire telephone corporation MCI Inc. for $6.3 billion. Consumer goods companies including Unilever and Colgate Palmolive, inspired by the deal between Procter & Gamble and Gillette, may also be interested in operations in the mergers and acquisitions market.
Rating of the largest mergers and acquisitions consultants in the United States* Company Transaction volume, billion dollars Rank based on 2004 results Change in position | 1. Goldman | 91.8 | 1 | No changes | | 2. Merrill | 69.7 | 6 | +4 | | 3.UBS | 60.0 | 9 | +6 | | 4. Morgan Stanley | 33.6 | 5 | +1 | | 5. Lehman | 29.1 | 4 | -1 | | 6.Credit Suisse | 27.0 | 8 | +2 | | 7. Evercore | 22.3 | 12 | +5 | | 8.Rohatyn | 22.3 | 13 | +6 | | 9.Bank of America | 15.3 | 11 | +2 | | 10. Citigroup | 13.6 | 3 | -7 | | 11. JP Morgan | 9.4 | 2 | -9 | | 12. Bear Stearns | 6.5 | 15 | +3 |
*As of 02/01/2005
Source: Bloomberg Ivan GORDEEV
|
