For the small battalion of bankers and lawyers advising EADS and BAE Systems, the end of merger talks between the two aerospace giants brings no small amount of anguish over lost fees.
The proposed union of the two had been closely watched in a year largely devoid of major deal activity, to say nothing of big European transactions. It had drawn in high-profile bankers on both sides, as bankers piled in to help out longtime clients.
Advising EADS were Perella Weinberg Partners, Evercore Partners, Lazard and BNP Paribas, while BAE drew upon Gleacher Shacklock, Morgan Stanley and Goldman Sachs. Clifford Chance was dispensing legal advice to EADS, while Freshfields Bruckhaus Deringer was counseling BAE.
Deal makers have privately bemoaned the slow pace of their business this year. About $1.6 trillion worth of mergers have been announced through the third quarter this year, in the worst showing for the industry since 2009.
The world of European mergers h as fared even worse. Just $459 billion worth of transactions involving companies on the continent have been announced through the third quarter, according to Thomson Reuters. That is the lowest level of activity since at least 2000.
The merger of EADS and BAE would have created a giant in the fields of civilian and military aircraft, worth some $50 billion. That would have made it one of the largest deals this year, potentially outpacing Glencore International's $45.5 billion bid for the shares in Xstrata that the commodities trader doesn't already own, according to Thomson Reuters.
Analysts at Freeman & Company estimate that investment banks stood to earn between $120 million and $150 million if the merger had been completed. With its demise, those advisers may earn only $8 million to $12 million between them.
