Banks to miss out on $55 million of fees as UPS-TNT deal collapses

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Published January 14, 2013

| Reuters

Bankers advising parcel delivery companies UPS and TNT Express are set to miss out on $55 million in fees after UPS withdrew its 5.2-billion-euro bid ($6.9 billion) for TNT due to opposition from antitrust regulators.

U.S. group UPS's advisers Morgan Stanley , Bank of America and UBS would have shared around $25 to $30 million, according to Freeman Consulting.

TNT's bankers, Goldman Sachs and Lazard, and Deutsche Bank, which helped the Dutch group's largest shareholder PostNL, would have split the remaining $20-$25 million, the data consultant estimates.

The payout would have been around 10-15 percent higher than the average for deals of a similar size because UPS had made an unsolicited approach to TNT Express, Freeman estimates.

Morgan Stanley, acting as principal financial adviser to UPS was likely to earn the lion's share of the UPS fee pot, up to around 50 percent, with Bank of America and UBS sharing about 25 percent each.

Of the remaining $20-25 million of fees, Goldman Sachs could have earned around 60 percent. Lazard, which advised TNT's advisory board was set to receive 2.5 million euros ($3.3 million), a source familiar with the matter told Reuters.

All of the advisers contacted by Reuters declined to comment.

UPS dropped its bid for TNT Express after the European Commission, the antitrust watchdog for the bloc of 27 countries, informed the two companies it was working on a decision to prohibit the proposed acquisition.

The value of mergers and acquisitions globally edged slightly higher last year, rising 2 percent to $2.6 trillion according to Thomson Reuters/Freeman Consulting data.

But a reduction in the number of large deals translated into a drop in fees, down 13 percent to $24.7 billion - bad news for investment banks facing higher costs from tougher capital rules and regulatory probes.

($1 = 0.7493 euros)

(Reporting by Sophie Sassard and Anjuli Davies; Editing by Mark Potter)

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