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Big Deals (August 27, 2010) Print E-mail

Goldman top advisor in M&A’s August resurgence.

Big Deals (August 27, 2010)

By Marine Cole

August may have been an unusually active month for mergers and acquisitions in general, as about $200 billion in deals were announced worldwide.

However, it still was not a strong one from the advisors’ standpoint. Nine of the top 10 ranked advisory firms showed a year-to-date decline in M&A activity when compared to the same time last year.

Goldman Sachs has advised on 27 deals in August, the largest number of worldwide deals this month, with a value of $97.7 billion bringing the firm to the top spot for worldwide M&A and displacing Morgan Stanley, according to data provided by Thomson Reuters.

Even so, Goldman has seen a decline of nearly 7 percent in deal value from the same period last year, despite a 28 percent increase in the number of deals.

Barclays Capital, for its part, is the only firm among the top 10 with a year-to-date increase in market share from the same period in 2009, ranking seventh in the global M&A advisory world compared to twelfth during the same time last year.

The insurance sector is especially seeing a surge in M&A activity as companies are trying to get rid of assets.

Deals in the industry have risen 60 percent to $44.8 billion so far this year, from $28 billion in the same period in 2009, according to data from Bloomberg. Companies such as Bank of America, Aegon and Royal Bank of Scotland have more than $10 billion in insurance assets currently on the block, it added.

One of the largest global M&A transactions of the past week was the $9.1 billion acquisition of Japanese bank Sumitomo Trust by Chuo Mitsui Trust Holdings. This is the largest announced M&A transaction in Japan this year as well as the largest worldwide acquisition of a bank in 2010.

The deal also boosted announced M&A activity in Japan to $13.7 billion from 111 deals, the highest monthly value since October 2009, when the total value reached $16.1 billion, according to Thomson Reuters.

But with the unexpected resurgence of worldwide M&A transactions in August, it had some wonder if the boom can be sustained. “I’m as befuddled as anyone,” Mark G. Shafir, head of global mergers and acquisitions at Citigroup, told Andrew Ross Sorkin of the New York Times this week. “This is a blow-away August. Yet I can’t call it a trend.”

This week has also been marked by a hard-fought bidding war. Hewlett-Packard and Dell, for example, have each raised their offers several times for 3Par, with most recently, HP raising its offer for the data storage company to $30 a share, or an enterprise value of $2 billion.

n the debt capital markets, issuance is reaching records in the Netherlands. Including this week’s $2.5 billion investment-grade debt offering from ING Bank, issuance from Dutch issuers has reached $72.1 billion, the largest year-to-date total on record, according to Thomson Reuters.

Investment-grade debt offerings in the Netherlands remain heavily focused in the financial industry, with 130 offerings in the sector and a total value of $59.8 billion in 2010, accounting for 82 percent of all investment-grade debt in the Netherlands this year and up 52 percent from the same period last year.

Rabobank is the top issuer of investment-grade corporate debt in the country with 108 issues and total value of $33.8 billion.

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