It was a pretty thin year again in M&A, but even in a poor year Goldman Sachs continues to set the standards. This is the fourth year in a row that it has won the award for best M&A house and it has held on to a market share of 26% after working on 271 deals to the tune of $311 billion.
In fact Citigroup (326 deals), CS First Boston (315) and JPMorgan (277) did more deals but for a much smaller total value.
Jack Levy, global head of M&A at Goldman Sachs, says: “The year was difficult and challenging for us. Volumes continued to be low and drop.” In this environment, Levy says, the firm had to trim staff. “We had to deal with difficult decisions about the level of professionals in the firm. But we are still looking to stay close to clients and maintain relationships.”
Levy adds that he had been hoping to see a market pick-up in the past year but geopolitical concerns have affected business confidence. However, he remains fairly optimistic. “We feel there is reason to be more upbeat looking forward but it is not going to come soon and there will not be an avalanche of deals. Businesses are trying to decide how much risk they can take.”
Finding the right balance is tricky for them, says Levy. While clients continue to be concerned about how they can continue to grow and where they can find opportunities, investors demand evidence of business growth at a reasonable rate.
“We just have to be patient and we have to be good listeners and to see that the clients feel they will be rewarded for taking risk,” he says. “I do feel things are looking better and it is clear to us that companies need and want to grow.”
Among deals that Goldman worked on in the past year, the one that stood out was Pharmacia’s $61.3 billion sale to Pfizer. Other big deals were Telecom Italia’s $28.6 billion sale to Olivetti, Crédit Lyonnais’ $16.8 billion sale to Crédit Agricole and Household’s $15.3 billion sale to HSBC.
