Corporate Finance: Mergers & Acquisitions

Morgan Stanley Leads After Three Quarters

BY Gordon Platt

Morgan Stanley edged out Goldman Sachs as the top financial adviser on mergers and acquisitions worldwide in the first three quarters of 2009, as M&A; activity declined 38% from the same period a year earlier, according to Thomson Reuters.

Morgan Stanley advised on 212 deals, valued at $523 billion, in the first nine months of this year, while Goldman Sachs advised on 191 deals, valued at $476 billion. Citi, J.P. Morgan and Deutsche Bank completed the top five financial advisers.

Meanwhile, Kraft Foods’ unsolicited $19.3 billion tender offer to acquire Cadbury, the UK-based candy maker, raised hopes that the long drought in deal activity could be nearing an end. The future of the deal was thrown into doubt, however, after Cadbury rejected the offer as too low.

Bruce Wasserstein, chairman and CEO of Lazard, was advising Kraft on the deal when he died in October. Wasserstein was a leading figure during the hostile takeover wave of the 1980s. He advised Kohlberg Kravis Roberts (KKR) on its takeover of Nabisco, which was the subject of the book and film, Barbarians at the Gate.

Recent rallies in the equity markets, coupled with improved conditions in the credit markets, have led to a recent increase in deal activity, according to Sola Akinola, head analyst for the Americas at Mergermarket. “There has been a marked increase in hostile bids, as well as contested deals, as everyone tries to get their hands on the best assets at the cheapest price,” Akinola says.

The majority of hostile deals so far this year have taken place in the United States. The predominance of US-based deal activity has pushed US law firms into the leading positions in Mergermarket’s thirdquarter league tables, led by Skadden Arps, Simpson Thacher and Sullivan & Cromwell.

Government bailouts of financial institutions are no longer playing such a major role in the M&A; deal totals. For the third quarter in a row, investments by governments and government entities declined from the previous period, according to Thomson Reuters. For the third quarter of 2009, government investments totaled $52 billion, down 57% from the second quarter.

Transaction volume in the global asset management industry in the third quarter was led by larger financial institutions shedding investment management businesses, according to Jefferies, a securities and investment banking firm. More than two-thirds of M&A; activity in the global asset management industry represented divestitures, a record proportion for any three-month period.

Bank of America announced the sale of the long-term asset management business of its Columbia Management subsidiary to Ameriprise. BNY Mellon announced the acquisition of Insight Investment Management from Lloyds Banking. Sumitomo Trust & Banking agreed to purchase Citi’s 64% interest in Nikko Asset Management.

The financial services industry led deal activity by sector in the first nine months of 2009, followed by energy and power, materials, and healthcare, according to Thomson Reuters. M&A; activity in the US declined 46% from the same period a year earlier to $601 billion, while Canadian M&A; deals fell by only 5.9% to $94 billion.

Bankruptcy-related acquisitions of US targets increased by 559% from a year earlier to $67 billion. This was largely due to General Motors’ $55 billion asset sale to the US Treasury, the Canadian and Ontario governments, and the United Auto Workers’ Voluntary Employee Beneficiary Association trust.

The healthcare sector was the most heavily targeted sector in the US during the first three quarters of 2009, with $160 billion in M&A; deals. The financials sector was second, followed by industrials, high technology, energy and power, consumer staples, materials, and media and entertainment.


Date Announced

Target Name

(Target Advisers)


Acquirer Name

(Acquirer Advisers)

Country Description

Ranked Value



Affiliated Computer



(Evercore Partners)

US Xerox
(J.P. Morgan)
US Definitively agreed to
acquire provider of data-
processing and information
technology services.


Perot Systems
(Goldman Sachs)
US Dell
(Morgan Stanley)
US Definitively agreed to
acquire provider of information
technology services, via a tender offer.


9/8/09 GVT Brazil Vivendi
(BNP Paribas)
(Calyon Corporate and
Investment Bank)
France Agreed to launch a tender
offer to acquire provider of telecom services.


9/3/09 Sepracor
(J.P. Morgan)
US Aptiom
(Nomura Securities)
(Thomas Weisel Partners)
US Unit of Dainippon Sumitomo
Pharma definitively agreed to
acquire pharmaceuticals


9/16/09 Bertin
Brazil JBS
(J.P. Morgan)
Brazil Acquired the remaining
26.9% stake it did not already
own in meat producer.



9/4/09 Odyssey Re Holdings
(Sandler O’Neill Partners)
US Fairfax Financial Holdings
(Merrill Lynch)
Canada Launched a tender offer to acquire the remaining 27.4% stake, in a sweetened bid.


9/7/09 Cadbury
(Morgan Stanley)
(Goldman Sachs)
(UBS Investment Bank)
UK Kraft Foods
(Centerview Partners)
(Citi) (Deutsche Bank)
US Planned to launch an unsoli-
cited tender offer to acquire
producer of chocolates, in a
stock-swap transaction.
9/28/09 Solvay Pharmaceuticals
(Citi) (Morgan Stanley)
(Deutsche Bank)
Belgium Abbott Laboratories
(Barclays Capital)
US Definitively agreed to
acquire pharmaceuticals
9/1/09 Skype Technologies
(Goldman Sachs)
Luxembourg Investor group
(J.P. Morgan)
(Barclays Capital)
(RBC Capital Markets)
US Definitively agreed to
acquire a 65% interest in
provider of Internet
communications services
from eBay.
9/18/09 British Land’s Broadgate
office complex
(UBS Investment Bank)
UK Blackstone Group US

Agreed to acquire a 50%
interest in office complex, in
a leveraged buyout.

9/28/09 Crucell
(Barclays Capital)


Jnc Nederland



Unit of Johnson & Johnson
acquired a 17.97% stake in
biopharmaceutical company.
9/3/09 Stockmann Oyj Finland HTT Holding Finland

Unit of Hartwell Capital

acquired a 9.15% stake in

owner and operator of

department stores.



9/7/09 Chartered Semiconductor
(Morgan Stanley)
(Citi) (Deutsche Bank)
Singapore Advanced Technology
UAE State-owned company
definitively agreed to acquire
semiconductor maker; includes
$2.16 billion in liabilities.
9/10/09 Daiwa Securities SMBC Japan Daiwa Securities Group Japan Agreed to acquire the
remaining 40% stake in
investment bank.


China Unicorn-Hong Kong Hong Kong China Unicorn-Hong Kong
(China International Capital)
Hong Kong Board authorized the repur-
chase of about 3.8% of the
company’s share capital from
SK Telecom.



KazMunaiGas Exploration
and Production
Kazakhstan China Investment
(Nomura Securities)
China Acquired global depositary receipts convertible into an 11% stake in oil and gas company.



Noble Group Hong Kong China Investment
(J.P. Morgan)
China Agreed to acquire a 15%
stake in wholesaler of
agaricultural raw materials.