Morgan Stanley (MS) has beaten its arch-rival Goldman Sachs (GS) to the top of the mergers and acquisitions league tables
Although 2009 will hardly go down as a good year for mergers and acquisitions, Morgan Stanley advised on $585 billion of deals compared with Goldman’s $548 billion, according to data compiled by Mergermarket.
Overall, the value and volume of deals is down 27% from 2008. However, the last three months of 2009 were the best since the third quarter of 2008 when the banking crisis struck.
Dow Jones VentureSource industry analysts also cite the fourth quarter surge in predicting a big year for Mergers and Acquisitions in 2010.
VentureSource reported the increased M&A liquidity was powered by a dramatic surge in valuations. The median amount paid to acquire a U.S. venture-backed company in the fourth quarter was $145 million — the first time since 2000 in which the quarterly median M&A valuation has risen above $100 million.
The value of deals is still below the peaks registered in 2007 in the months before the credit crunch.
Mergermarket points out that one record was set in 2009 when the number and value of insolvencies reached $95 billion – almost equal to the total for the previous four years combined.
There were 543 deals related to insolvency, the same as the number that occurred over the previous three years combined, helped by the sale of assets by car companies General Motors and Chrysler.
Goldman Sachs and Morgan Stanley were both involved in the biggest deal of 2009, the $63 billion takeover by Pfizer of Wyeth, in which Goldman was one of the advisers to Pfizer and Morgan Stanley among those helping Wyeth.
The significance of the victory does not come without scrutiny.
All the big Wall Street players are due to report profits in the coming three weeks, when staff will also learn the size of their payouts.
And this year more than any other, banks will be under the microscope during what is expected to be a bumper bonus season on Wall Street.
The increased revenue from M&A activity is helping Morgan Stanley to a bonus pot that is thought to represent the biggest percentage of its revenues for a decade.
However, the size of the bonuses are now coming under the criticism in light of the continuing fallout from the bailout of the banking industry, and a new one-time windfall bonus tax which has been passed in France and England.
Other notable names on the list included J.P. Morgan Chase (JPM) which fell from the number one spot it achieved in 2008, to third place in the tables.
Barclays Capital, the investment banking arm of Barclays leapt from 37th place to 8th, after advising on 70 deals with a value of $247 billion.
Barclays Capital is fresh from its takeover of the Wall Street operations of the collapsed Lehman Brothers.
