When it comes to ranking which merger advisers are on top of their industry, landing a role on a $130 billion deal can help out a lot.
As Verizon nears a final agreement to buy Vodafone’s 45 percent stake in its wireless unit, the banks helping to arrange and finance the transaction are eager to take part in the bonanza of fees that accompany such a transaction.
And two smaller advisers - including a star deal maker working solo - are expected to benefit as well.
A Verizon deal would be the third-biggest corporate takeover on record, based on terms not adjusted for inflation, according to Thomson Reuters. Vodafone itself holds the top spot with its $202.8 billion purchase of Mannesmann, while AOL paid $181.6 billion to merge with Time Warner.
Advisers to Verizon could earn $110 million to $125 million, while bankers for Vodafone could reap $100 million to $118 million, according to estimates from Freeman & Company.
That does not count the fees that banks could earn from financing the debt for the transaction. These firms could collect 0.2 percent to 0.4 percent of the total loan package, and 0.3 percent and 0.8 percent of a bond offering, Freeman estimates. With roughly $60 billion in financing, bankers could enjoy well over $150 million in fees for arranging the debt.
Verizon has hired an army of firms to dispense both advice and lending. Perhaps most notable is the presence of two independent advisers, Guggenheim Partners and Paul J. Taubman.
Guggenheim is an independent firm whose investment banking arm is led by Alan C. Schwartz, a former chief executive of Bear Stearns and a longtime telecommunications banker.
Mr. Taubman is a former co-head of the institutional securities division of Morgan Stanley and a star merger banker whose credits include Comcast’s takeover of NBC Universal. Mr. Taubman left the firm last year, but has long counted Verizon as an important client.
Other big deals have drawn extensively on the services of smaller advisers. The $35.1 billion Publicis merger with Omnicom relied on the services of just two independent banks, Moelis & Company and Rothschild. And NYSE Euronext’s sale to the IntercontinentalExchange involved a number of boutiques, including Perella Weinberg Partners, the Blackstone Group, Moelis and Broadhaven Capital Partners.
Meanwhile, Glencore International’s merger with Xstrata gave the league table credit to another individual, the former Citigroup rainmaker Michael Klein, for helping to arrange the deal.
Verizon has not forgotten its bulge-bracket friends in its dealings with Vodafone, however. JPMorgan Chase and Morgan Stanley dispensed advice, while the two firms worked with Bank of America Merrill Lynch and Barclays to arrange the financing.
Vodafone turned to two longtime advisers, Goldman Sachs and UBS, for its side of the table.
As DealBook noted last week, a deal would shake up the league tables. Here is where the banks stood, according to Thomson Reuters:
- Goldman Sachs, with 238 deals valued at $342 billion
- Bank of America Merrill Lynch, 136 deals, $281.5 billion
- JPMorgan Chase, 174 deals, $271.5 billion
- Morgan Stanley, 192 deals, $248.2 billion
- Deutsche Bank, 125 deals, $180 billion
- Citigroup, 146 deals, $155.5 billion
- Credit Suisse, 139 deals, $145.3 billion
- Barclays, 117 deals, $140.9 billion
- Lazard, 158 deals, $137.1 billion
- UBS, 112 deals, $105.1 billion
