A Goldman Platinum account
Bear, gone. Lehman, gone. Merrill, gone. And now Goldman Sachs and Morgan Stanley are to be transformed into deposit-taking, Fed-governed, ATM-fee-charging old-school bank holding companies. It’s not like they’re starting out at the bottom. The Wall Street Journal reports the agreement with the Fed puts Goldman at No. 4 in terms of outright size, behind Bank of America, JPMorgan and Citigroup.
After the Fed move, a mooted merger with the banking group Wachovia was no longer Morgan Stanley’s priority, a person familiar with negotiations said. What made the investment banks mighty was the leverage that they have now been denied. Everyone seems to agree the leverage model is broken, and with recession-wary Americans unlikely to fill Goldman and Morgan coffers with deposits any time soon, watch for these new banks to look to buy up other banks and their depositors as they enjoy their second mortgage on life.
(Photo credit: IMDB)
Other deals of the day:
* Japan’s Nomura Holdings has reached a deal to buy the Asian operations of Lehman Brothers, a source said, outbidding other banks seeking to scoop up Lehman’s Asia group on the cheap.
* Czech generic drugmaker Zentiva accepted a higher takeover offer from France’s Sanofi-Aventis that values Zentiva at around 1.8 billion euros ($2.6 billion), the companies said.
* Russia’s Onexim Group will pay $500 million for 50 percent of Renaissance Capital, one of Russia’s biggest homegrown investment banks, Onexim’s chief executive Dmitry Razumov told reporters.
* Ayala Corp, the Philippines’ oldest conglomerate, said it launched a $290 million tender offer locally and in the United States to raise its stake in outsourcing firm eTelecare Global Solutions .
* British Gas owner Centrica said it was acquiring Caythorpe Gas Storage from Warwick Energy for 70 million pounds ($130 million).
* Seamico Securities, Thailand’s fifth-largest broker, said it raised its stake in KTB Securities, a subsidiary of Krung Thai Bank, to 48.81 percent from 42 percent.