UBS Warburg on top in local M&A flurry
By SAMANTHA MAGNUSSON
09jul01
INVESTMENT bank UBS Warburg has cemented its position as the country's top corporate adviser for all completed mergers and acquisitions, capturing $45.3 billion of deals in the first half of the year.
The investment bank pipped JP Morgan to pole position by advising on 38 deals involving Australian target or acquirer companies, according to Thomson Financial Securities data.
Apart from the completed BHP Billiton deal, the bank also advised Pacific Century CyberWorks in its three Hong Kong joint ventures with Telstra and the completion of the takeover by British American Tobacco of British American Australasia.
US investment bank JP Morgan was ranked second by Thomson, advising in 11 deals worth $36.06 billion. However, it was the top adviser for all announced transactions in the first six months of 2000 involving an Australian target company, the report found.
In completed transactions, Gresham Partners was the third most successful adviser with $34.27 billion worth of deals. The firm, half owned by Wesfarmers, took part in eight deals, including BHP Billiton and the takeover by Wesfarmers of Franked Income Fund.
On the whole, M&A activity in Australia surged to $82.28 billion for completed transactions, defying a worldwide slump. Almost 52 per cent of deals involved foreign acquirers, led by companies in Singapore which figure in $20.11 billion of deals, upstaging the US and the UK for the first time.
Thomson says M&A activity in the US, Europe and Asia tumbled by 50 per cent on the average when compared to the same period last year as consolidation becomes "dormant".
Locally the telecommunications sector drove the 9 per cent increase in deals involving Australian targets. However, that increase was substantially below the 54 per cent jump in telco M&A activity enjoyed in the first half of 2000.
Speculation that the weaker Australian dollar would spur a raft of corporate takeovers by overseas institutions failed to materialise.
JP Morgan investment banking head Trevor Loewensohn said the low Australian dollar was not a powerful enough incentive for offshore companies to make plays for Australian companies.
"They won't make it on the Australian dollar alone. Australia is not seen as a must-have," he said.
Mr Loewensohn said the banking and telco sectors were ripe for M&A activity in the second half.
"It'll continue to be quite buoyant lots of companies need to increase their scale and global relevance," he said.
Already activity is picking up in the banking sector with St George pushing ahead with its plans to acquire BankWest, despite opposition from major shareholder National Australia Bank. And rumours persist that NAB will make a play for St George bank.
Rationalisation is already evident in the telco sector with many of the smaller players facing the prospect of being swallowed by larger players or disappearing altogether. |
