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By Marine Cole
The $4 billion acquisition of biotech company Talecris Biotherapeutics by Spain's Grifols represented the largest acquisition of the week. Yet global M&A activity in the healthcare industry is down 5 percent so far this year compared with 2009 and is at its lowest year-to-date level since 2005.
Still, investment banks aren't being hurt by the slump in healthcare M&A, thanks to big fees on a few big deals. So far this year, estimated fees for completed deals in the healthcare sector are up 74 percent. Morgan Stanley ranks in the top spot with 8.2 percent of the $863 million estimated fees, more than double the firm's wallet share from the industry in 2009, according to data from Thomson Reuters.
In equities, JPMorgan is trying to take advantage of the continued boom in China. This week, it announced a joint venture with China's First Capital Securities. The deal is subject to government approval.
This isn't the first US bank to offer underwriting services in China. Morgan Stanley and Goldman Sachs are already among the top 10 book runners in equity capital markets.
"The majority of the top 10 book runners completing the issuance of equity offerings in China are domestic or regional securities firms, with only Goldman Sachs and Morgan Stanley as foreign firms ranking in the top 10," according to Thomson Reuters.
So far this year, China is the biggest player in the global equity capital market, raising a total $45.1 billion from 261 deals, of which $31 billion were from 181 initial public offerings, according to data from Thomson Reuters.
This is the highest first-half year equity issuance ever in China, a record investment banks are cashing on. Investment banking underwriting fees for the Chinese equity capital market total $997 million so far this year, 5.4 times as high as the $185 million for the same period in 2009, according to Freeman Consulting Co.
Also in equities this week, Danish food producer Chr Hansen's $821 million initial offering marked the biggest IPO in the consumer staples sector this year and the third largest Danish one ever.
In Europe, the consumer staples sector currently accounts for more than 8 percent of the total IPO market, the largest year-to-date percentage since 1993.
Microsoft also issued $1.15 billion in convertibles, the biggest convertible deal in the US so far this year, and the second biggest global convertible deal this year. Microsoft is using the proceeds to repay commercial paper and bonds coming due within the next year.
The software giant's deal shows how the high tech industry is taking advantage of relatively low funding costs of convertibles, as spreads on bonds have risen on the heels of the European sovereign debt crisis. Convertible issuance often rises during periods of high volatility, as is currently the case.
Overall, convertible issuance in the high tech industry has doubled over the same period last year, and accounts for 19 percent of total convertible issuance so far this year.
With corporate bond issuance subdued, the market was dominated by issuance from government agencies, including Fannie Mae and Canada's Province of Ontario.
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