Bloomberg reports that while the big US firms like Goldman, Lehman and Merrill have been busy increasing their M&A fees this year, commercial banking rivals Citigroup and JP Morgan have been slashing theirs in a bid to take on business.
According to the news agency, Lehman has increased its M&A fees by 18% on average, Merrill 21% and Goldman 26%. Citigroup's fees fell 14% and JP Morgan slashed theirs 29%. Notwithstanding this, clients are still, by and large, sticking with the boys who have the history. M&A, as we know, is about reputation and experience. And you can't simply drop your fees to gain either.
According to Bloomberg data, the top eight firms will compete for around $6bn in M&A fees this year. Goldman has advised on eight of the largest 10 deals this year so far. Citigroup has got in on just three.
But Citigroup did feature in the recent $11bn Kmart takeover of Sears, Roebuck. And, somewhat ironically, the firm is said to have got a piece of the action when Robert Rubin, Citigroup's executive committee chairman, called up his old mucker Edward Lampert, chairman of the board at Kmart. Rubin gave Lampert his first break in business some 20 years ago - when he hired him at Goldman.
Rubin held high office at Goldman, where he worked for 26 years. He eventually became co-senior partner and co-chairman. Rubin also later became the 70th US Secretary of the Treasury, serving under Bill Clinton. between 1995 and 1999.