The dealmakers reshaping Europe

Everybody wants a slice of the $1 trillion European M&A market. The secret of earning big bucks (or rather, euros) is to arrange the handful of mega deals. We profile the dealmakers who've done it, and those who hope to. Top investment bankers from 10 firms talk about industries or countries in which they have a particular strength. Also, the advisers on the struggle for NatWest Bank explain their tactics. And we reconstruct the key moments in the biggest European deal of all: Vodafone's takeover of Mannesmann (Article: "The bid that couldn't fail"). Marcus Walker, Luciano Mondellini, Phillip Moore and Nick Kochan report

by Marcus Walker, Luciano Mondellini, Phillip Moore and Nick Kochan.

Vodafone's takeover of Mannesmann: The bid that couldn't fail

Some have it, the rest want it: the skills, track records and connections that help you win advisory mandates on Europe's high-profile deals. Advising on the very biggest transactions can send you shooting to the top of the M&A league table. You only have to look at the rankings since the euro came in: the six advisers to Vodafone AirTouch and Mannesmann occupy the top six places.

But in addition to the high profile sector of telecoms, advisory work continues across the board as investment banks fight to carve out a franchise in a pan-European and often global marketplace. The success of their overall investment-banking business may depend on it: winning corporate clients in other areas, especially primary capital markets, may hinge on being close to them during their key strategic decisions to merge or acquire.

Our illustration shows five top dealmakers whose careers are closely bound up with Europe's merger boom. Merrill Lynch's Dan Dickinson, head of European M&A, has overseen his firm's rise from nowhere to a top-three ranking; he also advised Mannesmann on its defence against Vodafone. His counterpart at Warburg Dillon Reed, Warren Finegold, was a leading aide to Vodafone boss Chris Gent during the contest. So too was Goldman Sachs' Simon Dingemans, co-head of the UK advisory group, who also advised on the original Vodafone-AirTouch marriage. Lehman Brothers' head of European M&A, Vittorio Pignatti, worked out how Olivetti could bid for Telecom Italia in 1999, and has helped establish Lehman as a specialist on Italy's complex business scene. And JP Morgan's co-head of global banking advisory, Terry Eccles, the man who put Lloyds and TSB together, advised the besieged NatWest on its acquisition by the Scots.

The following pages report on their and rivals' efforts. Commensurate with their fee-earning power, the advisory specialists will become tomorrow's most senior investment bankers, challenging the hegemony of capital-markets bankers during the past decade.

The reports in this survey start with the sector everybody bets will create a new generation of top global corporations: technology. In Europe, much of the new internet economy is too young for M&A, but corporate financiers hope to win the IPO mandates that will lead to M&A deals as the more successful e-commerce ventures mature and branch out.

But we haven't forgotten that it's not all e-commerce out there: deals are being done for oil companies, carmakers, drugs groups, insurers and others. And while investment banks are now set up to cover pan-European industry sectors, they also know that in European commerce, varying culture and law require local immersion. Experienced hands in the four main economies of Europe, Germany, France, Britain and Italy, explain how they view their countries' M&A scene in 2000.

Quattrone's boys find a home
There's no bigger name in technology investment banking than Frank Quattrone, the mustachioed, sweater-wearing, karaoke-singing leader of a corporate-finance group whose latest home is Credit Suisse First Boston. Colleagues poke fun at his dress sense, but they admire his professional skills enough to follow him loyally from bank to bank.

Marc Odendall

Marc Odendall, head of CSFB's European technology group, is a card-carrying member of the Quattrone appreciation society. In April 1996, Odendall joined Deutsche Morgan Grenfell on the same day that Quattrone and 20 followers arrived at DMG from Morgan Stanley. Quattrone's lieutenant George Boutros had negotiated a slam-dunk deal with the board of Deutsche Bank: if the technology group delivered high revenues, it would share much of the reward. But when Deutsche took heavy hits in its proprietary trading during the Asian and Russian crises, the Quattrone gang, which was beating all expectations, took up most of the bank's bonus pool. This did not endear them to Deutsche, which tried to renegotiate the agreement. Quattrone took his team of 170 bankers elsewhere.

The group chose CSFB in July 1998. "CSFB was a very strong all-round investment bank with a strong equities team and distribution capabilities, but little presence in technology. For us, it was a perfect match," says Odendall. The global group, now 300-strong, had the number-one market share in technology financing and M&A last year. It is more integrated into CSFB than it was at Deutsche. But it still enjoys considerable autonomy and unusually, CSFB's technology research resources come under the industry-group's wing.

It's a world apart from other sector teams in culture, too. It's unusually young, for a start; often, talented associates execute transactions that would be handled by directors elsewhere. Odendall says: "If people are really good, we just give them as much responsibility as possible."

Bankers in blue jeans
As for dress code, Odendall says: "Most of my team walk around in T-shirts and blue jeans; we don't care too much about form, because our clients don't either." (Disappointingly, the dapper Frenchman Odendall has turned up for this interview in a sharp suit.) Despite the informal culture of many new-economy start-up companies, not all of CSFB's clients approve of investment bankers in Nike pumps and baseball caps. Bankers don't dare so much as to take their jacket off in the presence of Bernard Arnault, the diminutive corporate Napoleon who has invested about $500 million in tech ventures.

George Boutros

CSFB's deals for European clients in the past year include lead-managing the flotation of UK internet provider Freeserve, advising Philips on acquiring VSLI in the US, and last month's acquisition by Alcatel of voice and data networking company Newbridge. The latter, at $7.1 billion, was the largest technology M&A acquisition by a European company so far.

Winning the Freeserve mandate was a particular breakthrough for the CSFB group's European business, because in spring 1999 the seller, Dixons, had mandated the bank's most powerful rival in European technology, Goldman Sachs. But Goldman had told Dixons it should wait before floating Freeserve: the venture's revenues were too small, and it needed a US strategic partner to be credible.
  Page 1 of 10  Next | Single Page