Tags: Bank-of-America | Merrill-Lynch | Flexes | merger | Muscles

Bank of America Merrill Lynch Flexes Merger Muscles

Friday, 24 Sep 2010 10:16 AM

The thundering herd is bucking and snorting again, if not quite stampeding in mergers and acquisitions.

Bank of America Merrill Lynch has gained a bigger slice of dealmaking, and a series of high profile hires means it is well placed for further growth in Europe and Asia-Pacific.

The acquisition of sub-prime mortgage casualty Merrill Lynch gave Bank of America a meaningful and long-coveted overseas investment bank shortly after Lehman's demise in late 2008.

The early marriage was tumultuous, however, as the Charlotte, North Carolina-based lender was forced to seek $20 billion of emergency capital from the Federal Reserve to cover escalating losses at its new subsidiary.

But the combination of Bank of America's balance sheet and senior hires from rival companies has started to deliver results.

"We are not throwing our balance sheet around, but we are using it more aggressively for clients than we did six months ago. This is part of our strategy to increase overall investment banking market share," said Christian Meissner, head of investment banking for Europe, Middle East and Africa, who joined in August from Nomura.

In private, competitors are already sitting up and taking note.

"The sense was that it was going to get run out of North Carolina, that BofA would not let these (M&A) guys run their businesses entrepreneurially," said a senior London mergers banker, who declined to be named when discussing a rival.

"The reality is they seem to be focusing again and paying attention to the business." BofA Merrill has worked on 170 transactions worth $257 billion, making it the fifth most active adviser globally, according to Thomson Reuters preliminary data.

That compares with a number-eight placing a year ago.

While Merrill's U.S. business remained static, its work with European and Asia-Pacific companies expanded to drive an overall increase in advisory.

"I am pleased with the firm's progress in M&A this year, but we can improve on this," said Meissner.

"We aim to be in a top three position globally, as well as in the U.S., Europe and Asia individually, within the next couple of years. Our overall goal is to be the leading corporate and investment bank in the world."

International Expansion

BofA Merrill led deals worth $141 billion involving a European target or acquirer, making it the fourth busiest company in this category, up from tenth last year.

The bank is currently advising British pay-TV group BSkyB on a $12 billion takeover offer made by Rupert Murdoch's News Corp .

The company's work with Asia-Pacific targets or acquirers enabled it to jump to second place from 17th in the region, fueled by high profile mandates, including advising Australia's Newcrest Mining on the $8.5 billion acquisition of Lihir Gold.

Meissner is already building for future growth with three senior hires in his short time with the bank.

"We have still got some more hires to make next year, but I would say overall that the bulk of our senior recruitment for 2010 has been done," he said.

An old Nomura colleague, Adrian Mee, will join BofA Merrill in December to lead international M&A.

As Nomura's top European mergers and acquisitions banker, Mee advised Britain's International Power on a tie-up with GDF Suez SA of France.

Antonin Baladi will also join in December from Nomura, and Joseph Belan arrives in November from Pala Investments.

Other recent hires for Merrill include Julian Mylchreest as co-head of global energy and power, and Rob Firth, who joined from Deutsche and who will head up EMEA financial sponsor coverage.

Among the losses following the merger, global head of energy and power Jonathan Grundy decamped to Credit Suisse in March.

Caroline Silver, a former chairman of European investment banking at BofA Merrill, left around the same time to join independent investment bank Moelis.

© 2017 Thomson/Reuters. All rights reserved.

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The thundering herd is bucking and snorting again, if not quite stampeding in mergers and acquisitions. Bank of America Merrill Lynch has gained a bigger slice of dealmaking, and a series of high profile hires means it is well placed for further growth in Europe and...
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2010-16-24
 

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