Thursday was a big day for J.P. Morgan & Co.'s merger-and-acquisition advisory team.
The blue-chip bank acted as adviser on two large cross-border deals announced yesterday: Volvo's planned $6.5 billion sale of its passenger vehicle business to Ford Motor Co. and TRW Inc.'s planned $7 billion acquisition of LucasVarity, a British aerospace company.
The assignments could reap Morgan an estimated $30 million in advisory fees, though a spokesman for the bank declined to comment. Morgan executives, however, did say they expect to profit from a wave of cross- border mergers.
"As companies aim to have global scale and dominance in their industry, the firms that do the greatest share of those deals will be well placed and able to advise knowledgeably in markets around the world," said a spokesman for the firm in London.
J.P. Morgan ranked No. 3 among M&A advisers in Europe in 1998 and No. 7 among advisers worldwide, according to Securities Data Co.
Morgan bankers in London have had a long relationship with Volvo, a Swedish company. In June, the bank sole-managed Volvo's sale of some $850 million in stock it held in Swiss pharmaceutical company Pharmacia & Upjohn. It was one of Europe's largest block stock trades, Morgan said.
Morgan investment bankers also advised Volvo when it increased its stake in Swedish commercial truck maker Scandia to 13% from 4% over the last four months of 1998.
A team of Morgan bankers, including Preben Prebensen, managing director and head of investment banking for Western Europe, worked for Volvo on the Ford deal, the spokesman said.
When the Ford sale is complete, Volvo plans to focus on its commercial vehicle business. Volvo executives became more interested in this new direction after Chrysler and Germany's Daimler Benz announced merger plans last year .
Ford, which was advised by Warburg Dillon Read, has made a cash tender offer for the Volvo unit. Ford has no plans to obtain financing at this time, a spokesman said.
Meanwhile TRW, a Cleveland aerospace and auto-parts maker, would receive fully underwritten financing from J.P. Morgan, Bank of America, and Citibank for its $7 billion cash offer for LucasVarity.
TRW has plants across North and South America, Europe, and Asia. This acquisition will solidify its position as a global leader in aerospace and auto-parts manufacturing, executives said Thursday.
A Morgan team including Sarah Nash, managing director and head of investment banking for North America, advised TRW, a spokesman said.
Lazard Houses and Rosenfeld & Co. advised LucasVarity.