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Bankers set to reap US$155m in fees on Shell-BG takeover

Thursday, April 9, 2015 - 00:40

[NEW YORK] Bonus day just got a US$155 million shot in the arm for bankers at Goldman Sachs Group Inc, Robey Warshaw LLP and Bank of America Corp.

The only three investment banks to advise on Royal Dutch Shell Plc's 47 billion-pound acquisition of BG Group Plc may split a fee of that size for their work on the deal, according to estimates from New York-based researcher Freeman & Co. The deal is the largest takeover announced in 2015, and the oil and gas industry's biggest merger in at least a decade.

Bank of America could make as much as US$65 million for its role as sole adviser to Shell, while Robey Warshaw and Goldman Sachs will split as much as US$90 million, early estimates showed.

Shell's purchase is adding to what's proving to be an already robust year for M&A advisers - with about US$327 billion in deals struck by European companies alone. That total is set to rise as the euro's decline against the dollar and renewed confidence in an economic recovery make Europe appealing for global acquirers.

Goldman Sachs, which also advised on Ball Corp's acquisition of Rexam Plc, holds the top spot for merger advisory services in Europe this year. Bank of America is ranked second while Robey Warshaw is now third, data compiled by Bloomberg show.

Goldman Sachs and Bank of America also advised on Halliburton Co's purchase of Baker Hughes Inc last year, with Goldman representing Baker Hughes and Bank of America and Credit Suisse Group AG working with Halliburton, according to the data.

Crude oil's decline since mid-2014 had heightened speculation that some of the largest names in the industry may look to combine their operations. Houston-based Halliburton, the second-biggest oil-services provider, agreed to buy Baker Hughes for about US$35 billion in November. Most other acquisitions have been of small and medium-sized explorers.

BLOOMBERG

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