Matthew Campbell and Aaron Kirchfeld London
While UBS’s investment bank suffered setbacks ranging from a state bailout to a rogue trading loss in the past five years, its relationship with Vodafone never faltered.
That friendship has paid off again as UBS, joined by Goldman Sachs, advised Europe’s largest cellphone operator on the $130 billion (R1.3 trillion) sale of its 45 percent stake in Verizon Wireless to Verizon Communications. It’s the latest of more than three-dozen deals the Zurich-based firm has helped Vodafone execute.
The transaction, led by Simon Warshaw, a UBS media-banking veteran, vaulted UBS to sixth place from 11th in the global league tables for merger advice, ahead of Deutsche Bank, Citigroup and Credit Suisse.
“They’ve managed to hold onto a long-standing relationship and it’s important that they got this deal despite the narrower footprint in investment banking,” said Christopher Wheeler, a London-based analyst at Mediobanca.
UBS and Goldman Sachs are expected to share as much as $118 million in Vodafone advisory fees, according to estimates by consulting firm Freeman in New York.
Goldman Sachs’s team was led by Karen Cook, a London-based president for its European business.
As recently as May, UBS faced calls from investor Knight Vinke Asset Management to spin off its investment bank to concentrate on wealth management. Last year, it announced plans to cut 10 000 jobs. The firm made Bank of America dealmaker Andrea Orcel chief executive of its investment banking arm in 2012 with a mission to turn around its performance – a task he said would take up to five years.
Orcel, a financial sector mergers and acquisitions expert, is leading a push in advisory and an exit from most fixed income trading.
Investors are applauding the restructuring. UBS shares have gained 30 percent so far this year, valuing it at Sf71bn (R778bn).. – Bloomberg