Mizuho to buy investment bank Greenhill in US$550 million deal

MIZUHO Financial Group is forging further into US investment banking through a deal to buy Greenhill . as it seeks to accelerate growth.

The Japanese banking giant agreed to buy Greenhill for US$15 a share in an all-cash transaction, which values the firm at US$550 million including debt, the firms said on Monday (May 22) in a statement. The lender will retain Greenhill’s leaders, including chief executive officer Scott Bok, who will be chairman of mergers, acquisitions and restructuring.

Mizuho joins its Japanese rivals to expand investment banking tie ups in the US – though goes a step further in making an acquisition. Sumitomo Mitsui Financial Group last month said it will expand a tieup with Jefferies Financial Group to boost US capital markets and M&A advisory businesses. Japan’s largest bank Mitsubishi UFJ Financial Group has a more than decade-old alliance with Morgan Stanley, a deal struck in the heat of the 2008 financial crisis.

The US$15 a share price represents a 121 per cent premium to where Greenhill’s stock traded at the close of Friday, before the deal was announced. Shares in the firm jumped 116 per cent to US$14.65 at 10:09 am in New York on Monday.

“The stock as recently as February was trading right around this price,” Jerry Rizzieri, the president and CEO of Mizuho Securities USA, said in an interview. “Regional banks are down 40 per cent, this stock has taken a pretty big drop,” he said. “We think we’re paying a fair price for a premium brand.”

The deal gives Mizuho another 370 employees, and Greenhill will continue to operate in 15 locations around the world. Most locations overlap with Mizuho’s existing locations except Melbourne and Stockholm, according to Rizzieri. Mizuho plans to complete the transaction by the end of the year, and the Greenhill business will be within Mizuho’s larger dealmaking division run by Michal Katz, head of banking in the Americas.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign Up

Sign Up

Mizuho is betting the takeover will complement its investment banking teams.

“We only recently began hiring M&A bankers in the last few years,” Rizzieri said. “Mizuho offers a full complement of products ranging from debt, equity, capital markets, derivatives, fixed income and equity sales and trading, securitization. The piece that’s been missing has been M&A,” he said.

Mizuho once held a stake in a rival to Greenhill, Evercore, which it picked up in 2008 when the investment bank was trading at less than US$13 a share. Mizuho exited the US$295 million position in 2015, with the stock more than quadrupling in that seven-year time frame.

Deal slump

Deal-making globally has slumped about 44 per cent this year to US$973 billion amid economic uncertainty, an antitrust crackdown and tougher financing markets, according to data compiled by Bloomberg. That slump has taken a toll on some M&A focused advisers.

Greenhill is currently ranked no. 74 in M&A this year after landing at no 49 in 2022, the data show. Before the financial crisis, the firm held a top 15 ranking, with its founder M&A veteran Bob Greenhill having been a key dealmaker for everyone from Citigroup titan Sandy Weill to Sumner Redstone.

Mizuho’s takeover ends a nearly two-decade run in public markets for the boutique investment bank, which went public in 2004 under Greenhill. Bok was tapped to co-lead the firm three years later, and became sole CEO in 2010. The stock traded at more than US$81 per share at the end of that year.

In the past decade, Greenhill faced competition from a proliferation of boutiques, with Moelis ., Houlihan Lokey and PJT also among those going public.

“Our firm was a pioneer in the concept of the publicly traded independent investment bank, and that format served us well for many years,” Bok said in a statement. “Now, given the evolution of markets, we believe our clients and employees will benefit from our team becoming part of a larger, more diversified financial institution.” BLOOMBERG