goldman sachs buys 45pc slice of jb were, page-3

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    AUSTRALIAN FINANCIAL REVIEW:

    JB Were, Goldman agree on merger
    Mar 27 10:53
    Damien Lynch

    Australia' JB Were and US investment bank Goldman Sachs on Thursday said they had agreed to a merger of their Australian operations. The new business will be called Goldman Sachs JBWere.

    The merger deal, the culmination of months of talks, comes as JB Were looks to gain more global clout and Goldman Sachs moves to strengthen its position in Australia.

    The merger also follows two years of consolidation in the Australian banking market, which has seen many investment houses dramatically cut their staff numbers.

    Goldman Sachs will own 45 per cent of the merged group, with employees owning the rest. No financial terms were released, although it has been reported that Goldman Sachs was considering investing $100 million into the venture.

    JB Were chairman Terry Campbell will be chairman and chief executive of the merged entity. Goldman Sachs Australia co chairman Andrew Stuart and JB Were joint managing director Craig Drummond will become co-chief operating officers.

    Goldman Sachs has struggled to make an impact in Australia, where it employs 90 people, but its presence in the corporate market is regarded as stronger than that of JB Were. It has scored key mandates this year, including the Promina and Virgin Blue floats.

    JB Were, which is consistently ranked in the top five brokers by market share, is expected to leverage Goldman's international presence, M&A expertise and strong balance sheet.

    Reports have suggested that JB Were's search for a global partner intensified when it was sidelined from Amcor's takeover of German group Schmalbach-Lubeca last May, although Amcor had been a JBWere client for years

    The merger is expected to lead to job losses.

    Five analysts at the Melbourne-based broking house JB Were, which has a 1,200 strong workforce, were made redundant earlier this week.

    Among the positions cut were a small-cap analyst, a resources analyst in Melbourne and one in New York, an economist and a private client research analyst.

 
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