Goldman Merges Health, Retail Investment-Banking Groups

Goldman Sachs Group Inc., the top merger adviser this year, is combining its health-care and retail investment-banking groups amid a boom in deals involving pharmaceutical companies.

Kathy Elsesser and Francois-Xavier de Mallmann, co-heads of the retail team, will lead the new group with Marshall Smith, who runs the health-care unit, according to an internal memo obtained today by Bloomberg News. David Wells, a spokesman for New York-based Goldman Sachs, confirmed the memo’s contents.

Wall Street firms have been seeking to boost efficiency as lower trading revenue and new capital rules damp returns. The combined group would be among the bank’s largest by total investment-banking fees, trailing financial institutions and financial sponsors, according to data from New York research firm Freeman & Co. covering the past three years.

The change will allow bankers to “be deployed more widely across a broader client base,” Goldman Sachs’s co-heads of investment banking, Richard J. Gnodde, David Solomon and John S. Weinberg, wrote in the memo. “We see growing convergence between sub sectors.”

Goldman Sachs is the top-ranked adviser this year on deals involving health-care companies, which this quarter announced about $200 billion of deals, the most ever, according to data compiled by Bloomberg. The firm ranked second for retail deals, behind Morgan Stanley, the data show.

Elsesser started working for Goldman Sachs in 1989, while de Mallmann and Smith joined in 1993 and 2005, respectively.

Goldman Sachs is an adviser to Allergan Inc. on Valeant Pharmaceuticals International Inc.’s $54 billion hostile takeover bid, as well as to medical-device maker Covidien Plc on its $46 billion acquisition by Medtronic Inc. On retail deals, the firm is advising Safeway Inc. on its $9.1 billion sale to Albertsons LLC.

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