Best bank
BNP Paribas
Best debt house
BNP Paribas
Best equity house
Société Générale
Best M&A house
Lazard Frères&Cie
BNP Paribas continues to press ahead with making a success of the merger that came about in extraordinary circumstances in 1999, after the three-way battle with Société Générale. The combination of the larger, but slower, wholesale bank, BNP, and the smaller more international investment bank, Paribas, has created the leading corporate bank in France. This comes with some strong specialist franchises, such as Cetelem, the consumer finance business and a retail business in France that commands high volumes.
| Michel Pébereau | ||||||
BNP Paribas’s investment banking division is stronger in the debt markets than in equities or mergers and acquisitions, and for the moment, while activity tails off in equity and M&A, it is making itself very useful to French corporates. In the past 12 months, BNP Paribas has rebuilt an international debt capital markets business that suffered mass defections following the prolonged takeover battle that robbed Paribas of its moment of glory art the birth of the euro. Paribas, previously a leader in Ecu bonds, had hoped its time had come in January 1999, but found itself being scrapped over by two bigger French banks for which few of its employees had much respect.
In the past 12 months it has rediscovered some balance and has been the largest arranger of bonds and loans for French companies. It has arranged bond deals for Lafarge, Renault, LVMH, Saint-Gobain, AXA, Vivendi, Carrefour, and, most notably of all, played a lead role in France Telecom’s e17.6 billion bond deal this March. It was also an arranger on the e30 billion loan France Télécom took out last summer to pay for its breakthrough acquisition of Orange – the deal that transformed its position in European mobile telephony. BNP Paribas has also arranged large loans for Schlumberger, Peugeot, Pernod Ricard and Vivendi Environment among others and also wins the award for best debt house.
In the short term, BNP Paribas may be delighted that it has such a powerful debt franchise. But questions remain over its longer-term prospects. Michel Pébereau, the highly regarded chief executive of the bank, is keen to build up the retail business inside France and abroad and also to build up asset management. The bank may well begin to reallocate capital towards these businesses and away from corporate banking and investment banking, which for now, contribute the lion’s share of the business. BNP Paribas could be setting out on a transformation into a very different kind of bank, perhaps through acquisitions.
Société Générale has long been renowned for its specialist strength in derivatives, notably equity derivatives including warrants distributed through its retail network and other more structured products. It ranks high for its execution capabilities in French stocks and in the past 12 months, in a generally quiet primary market, it has stood out above the top international investment banks such as Morgan Stanley, in acting as a bookrunner on more deals for French companies than any other firm.
It was global co-ordinator on the recent $2 billion deal for Thomson and partnered with Goldman Sachs on a $2.3 billion offering for Vivendi Environnement. It also partnered CSFB on the e2 billion offer of Alstom shares in February. In perhaps the most testing deal of all, it stuck to its guns alongside Dresdner Kleinwort Wasserstein and Morgan Stanley and managed to complete the $5.7 billion equivalent IPO of Orange. It was a deal dogged by ill-fortune as the entire European telecom sector floundered and investors saw shares fall below issue price shortly after the deal priced. That it succeeded at all was crucial for France Télécom and the shares did climb above issue price in the weeks after the deal, before being caught up once more in the general turbulence around telecoms.
Many banks would lay claim to be strongly positioned in corporate advisory in France. Morgan Stanley represented CCF in its takeover by HSBC, Canal Plus in its takeover by Vivendi and France Télécom on the acquisition of Orange. But on its home patch Lazard Frères&Cie is still a powerhouse, regularly advising on very large deals – it represented Vivendi on the $14 billion acquisition of 51% of Canal Plus – and also extending down into a broad range of medium-size public transactions and buy-outs. It worked on the MBOs of MGE UPS systems and Frans Bonhomme. It acted for Dalkia on the deal in which Electricité de France acquired a 34% stake in the company and has been involved in more transactions than any other adviser in France in the past year.
