U.S. banks and other investment advisers that have been pumping money into their European merger and acquisition businesses were rewarded in the third quarter, when nearly half of the announced deals involved European companies.
European deals accounted for 48% of the $780 billion worth of transactions announced from July 1 to Sept. 30, according to Thomson Financial Securities Data. U.S. transactions accounted for 42%.
A strong European operation helped Goldman Sachs Group Inc. retain its hold on first place in the worldwide rankings, with 295 deals worth a total of $799.6 billion and a 35.7% market share. Goldman was among the advisers to Elf Aquitaine, which announced a $49.7 billion deal with Total Fina, in a pairing of French oil companies.
Morgan Stanley -- another adviser to Elf Aquitaine -- was a close second, with deals valued at $729.4 billion and a 32.5% market share. Merrill Lynch -- an adviser to Total Fina -- was No. 3, advising on 284 deals worth $603 billion. It had a market share of 26.9% through the first nine months.
With the exception of J.P. Morgan & Co. and Citicorp's Salomon Smith Barney, which ranked fifth and sixth worldwide, U.S. commercial banks continued to be all but invisible in mergers and acquisitions outside the United States and Europe. Chase Manhattan Corp., the only other U.S. commercial bank in the league tables, ranked 10th in worldwide mergers for the first nine months. J.P Morgan's total was boosted by its role defending National Westminster Bank from a planned $34 billion hostile takeover bid by Bank of Scotland, which would be the third-largest deal. The second-biggest was a U.S. acquisition, Viacom International's $40 billion stock deal for CBS.
In all, European deal value was up 277% from third quarter of 1998.
"In the same way that it's been almost impossible for European investment banks to be global without a U.S. presence, it's becoming impossible for U.S. investment banks to be absent from Europe," said Jacques Aigrain, managing director and co-head of J.P. Morgan's global mergers and acquisition business.