Western Europe is the most competitive region in the world for investment banking. The big five US firms, with the ambition and capability to claim global leadership, all lead transactions for the continent’s biggest companies as well as for US and Asian multinationals acquiring and raising capital in Europe.
The big European banks may have given up on competing with them for domestic business in the US but are more determined than ever to defend their home turf. And the independent investment banks and boutiques are strong in Europe too.
As in the global revenue rankings, JPMorgan and Goldman Sachs tend to command the top two spaces each year in western Europe. But the gap to the chasing pack has been narrowing. Between them, the top two commanded a 23% revenue share in the US in 2023. In Europe, they had just 12.7%.
This year, BofA Securities wins the award as western Europe’s best investment bank in recognition of its reemergence as a challenger to JPMorgan and Goldman Sachs. In a tough year for equity capital markets, it topped the rankings. It came third in Europe-marketed leveraged loans and fifth in M&A advisory.
And this is not a one off. Jim O’Neil, the firm’s head of corporate and investment banking for Europe, Middle East and Africa (EMEA), provides the historical context, going back to the acquisition of Merrill Lynch in the global financial crisis.
“We started with a large-cap strategy focused on the biggest clients doing the biggest deals but did not cover the broader client universe as deeply as some US rivals. Then we had a strategic change after Matthew Koder became head of global corporate and investment banking in 2018 with a clear vision to be in the top three in every region and every product. We have seen significant investment in this region, both in people and in balance sheet.
“In equity capital markets, we were a top firm in blocks last year. That’s a business where banking, markets and risk have to be aligned,” he continues.
In May 2023, BofA was sole global coordinator on the £804 million accelerated placement of secondary shares in Haleon on behalf of GSK. It was mandated again as joint global coordinator on the £886 million sell down that followed in October 2023. BofA had previously advised GSK on the demerger and listing of Haleon.
When markets are tough, clients want to work with banks they trust and that can get deals done well
Matt Cannon
Matt Cannon, head of investment banking EMEA, describes the uncertain markets of 2023 as a key test of BofA’s progress in building and deepening client relationships. “When markets are tough, clients want to work with banks they trust and that can get deals done well,” he says.
BofA was joint global coordinator and stabilization manager on the €935 million Schott Pharma IPO on the Frankfurt Stock Exchange. Marketing went through multiple rounds of early looks, deep dive and pilot fishing sessions, introducing the management team to a broad range of key global, German, US and sector specialist investors, as well as family offices and sovereign wealth funds. A cornerstone commitment from the Qatar Investment Authority for 21% of the total deal size anchored the transaction.
It was one of the largest deals of the year and the biggest European healthcare IPO since 2018. Books were covered multiple times and the deal priced in the middle of the range. In a banner year like 2021, it would not have been an especially large or high-profile transaction. But in such a difficult market, it set the standard for successfully executing an IPO.
In similarly difficult conditions, BofA acted as joint lead financial adviser to Novartis on the $14.9 billion spinoff and listing of Sandoz on the SIX Swiss stock exchange, the largest spinoff in Europe last year.
BofA advised from the initial strategic review through to preparation for the listing, with multiple global roadshows targeting Novartis shareholders and potential new investors. It worked on that transaction for three years. The normal choice would have been an IPO or trade sale for Sandoz, but Bank of America has a lot of spinoff expertise from deals in the US.
