Goldman considers reviving M&A department | FT

Goldman Sachs is considering an overhaul of its US mergers and acquisitions business following similar moves by other Wall Street banks ahead of an expected upturn in activity.

......Along with other leading Wall Street banks, Goldman redeployed most of its M&A bankers when deals dried up following the stock market slump in 2000. The bankers were moved into the industry teams that advise clients on all their investment banking needs. Goldman kept only a small group of senior bankers to oversee M&A services.

Citigroup and Credit Suisse First Boston have already moved to reverse the disbanding of their M&A departments.......At other firms such as Morgan Stanley and Lehman Brothers, M&A teams were not disbanded, but shrank as bankers were fired or moved into industry groups.

......People familiar with the discussions say some senior figures in the bank are concerned about recreating the M&A department, whose members' elite image created internal tensions.

There was a surge in corporate dealmaking in the first quarter of this year, with a few big-ticket transactions such as AT&T Wireless's $41bn sale to Cingular Wireless and Bank One's $58bn sale to JP Morgan Chase. Although the euphoria of January and February has died down, the expectation on Wall Street is that M&A activity will be much healthier than in previous years.

Such confidence is forcing many firms to reassess how competitive they are in pitching for work on big deals, which often carry prestige and high fees.

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