JPMorgan Widens M&A Lead Over Goldman Sachs With $39 Billion T-Mobile Deal

JPMorgan Chase & Co. (JPM) extended its market-share lead over Goldman Sachs Group Inc. (GS) in mergers advice after AT&T Inc. (T) beat out Sprint Nextel Corp. to buy Deutsche Telekom AG (DTE)’s U.S. wireless unit for $39 billion.

Already first in Bloomberg’s ranking of advisers by dollar value of transactions announced since Jan. 1, JPMorgan’s role with AT&T on the T-Mobile USA deal boosted the New York-based bank’s tally to $159 billion. Goldman Sachs, which advised Sprint Nextel in talks with T-Mobile, dropped to third with $96.1 billion, according to data compiled by Bloomberg.

“Ranks are important,” said Neal Stoughton, a professor of financial services at the University of New South Wales in Sydney. “If you hire an adviser, you’re seeking someone who can have success. JPMorgan is competing very aggressively.”

The acquisition is a sign of life for dealmaking in the telecommunications industry, where the more than $500 billion of takeovers struck in both 1999 and 2000 were followed by a decade with an average of $175 billion a year, Bloomberg data show. Telecom deals made up 8 percent of the merger market last year, compared with 18 percent in 2000.

JPMorgan stands to earn fees of about $20 million from committing to provide AT&T a $20 billion, one-year unsecured loan as part of the transaction, according to estimates by New York-based research firm Freeman Consulting. The loan- arrangement fee could become “significantly higher” if AT&T’s credit rating is negatively affected by the deal, said Freeman.

Loan Fee

Freeman estimates AT&T may also pay fees of as much as $65 million to its three advisers: JPMorgan and boutique advisory firms Greenhill & Co. and Evercore Partners Inc. (EVR)

New York-based Greenhill’s team included founder Robert Greenhill, Gil Ha and Lawrence Chu. The JPMorgan bankers were Andy O’Brien, James Woolery, Kurt Simon, Anwar Zakkour and Thomas Cassin. Evercore’s team included founder Roger Altman, Eduardo Mestre and Dan Mendelow.

Deutsche Telekom’s advisers, Morgan Stanley (MS), Deutsche Bank AG (DBK) and Credit Suisse Group AG (CSGN), may earn as much as $60 million in advisory fees, according to Freeman. The transaction helped Morgan Stanley, Deutsche Telekom’s lead banker, overtake Goldman Sachs to win the No. 2 spot in Bloomberg’s merger league tables since Dec. 31, with $135 billion of transactions, Bloomberg data show. Morgan Stanley garnered the top spot in global M&A advisory in 2009 and 2010, the data show.

Morgan Stanley bankers advising Deutsche Telekom included Jean Abergel and Dirk Notheis in Europe and Robert Eatroff, Adam Shepard and James Murray in the U.S.

Deutsche Bank, Credit Suisse

Deutsche Bank’s team was led by Armin von Falkenhayn and Philipp Meier-Scherling in Europe and David Pearson and Don Birchenough in the U.S. Credit Suisse bankers included Luigi de Vecchi, Jeff Murphy and Ken Oliver Fritz in Europe and John Trousdale and Mark Simonian in the U.S.

Goldman Sachs, based in New York, held the top spot in global M&A advisory every year from 2001 to 2008, Bloomberg data show. Connie Ling, a spokeswoman at Goldman Sachs in Hong Kong, declined to comment.

Excluding transfers of government assets, the AT&T deal is the largest takeover proposed anywhere in the world since BHP Billiton Ltd., the world’s largest mining company, offered $40 billion for Potash Corp. of Saskatchewan last August. BHP’s bid was blocked by the Canadian government.

To contact the reporters on this story: Zachary R. Mider in New York at zmider1@bloomberg.net; Brett Foley in London at bfoley8@bloomberg.net.

To contact the editor responsible for this story: Jennifer Sondag at jsondag@bloomberg.net.

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