DealZone

Deals wrap: Jamie Dimon wants some R-E-S-P-E-C-T

Jamie Dimon, CEO and chairman of JPMorgan Chase & Co., poses for a portrait in his office in New York, in this photo taken December 22, 2010. REUTERS/Lucas Jackson In a special report, Reuters’ Elinor Comlay and Matthew Goldstein look into Jamie Dimon’s relationship with the White House, his leadership at JPMorgan and if he lives up to his “regular guy” image.

Delaware touts itself as a business-friendly haven, but a new strategy by a well-known whistleblower takes the rules in an unexpected direction.

As Indian companies farm out across the globe chasing business where they can through a slew of M&As and joint ventures, stodgy Indian banks are following suit, as much to retain clients as to chase profits.

In Asia, it’s hello to faster trades and goodbye to lunch hour, reports The New York Times.

Deals wrap: JPMorgan surprises

A sign is seen outside the JPMorgan office in Los Angeles, California, October 12, 2010. REUTERS/Lucy NicholsonJPMorgan reports higher-than-expected quarterly earnings, helped by narrowing losses on bad loans that allowed it to release $2 billion in reserves.

JPMorgan CEO Jamie Dimon reckons the bank will generate up to $50 billion in excess capital over the next three years. The veteran dealmaker should resist the temptation to go on a spending spree, writes Breakingviews columnist Antony Currie.

Sanofi-Aventis hopes to reach a takeover deal that would value Genzyme at around $76 per share, or some $20 billion, the French newspaper Le Figaro said.

from Breakingviews:

Dimon should keep JPMorgan’s powder dry for now

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

NEW YORK -- Jamie Dimon faces a luxury problem. The boss of JPMorgan, which reports earnings Friday, reckons the bank will generate up to $50 billion in excess capital over the next three years. The question is what should he do with such a windfall?

He already hopes to reinstate the dividend, cut during the financial crisis, and may even buy back shares, if regulators allow. But the veteran dealmaker must be sorely tempted to go on a spending spree. Analysts are already talking up the benefits of acquisitions both at home and abroad. But holding fire makes more sense.

Deals wrap: Dealing with regulation

Traders work on the floor of the New York Stock Exchange near the Goldman Sachs stall July 16, 2010. REUTERS/Brendan McDermidBanks are self-regulating in advance of new financial reforms. Are recent moves by Goldman Sachs and JPMorgan “smoke and mirrors” or a way to subtly shift the form of impending regulation? *View analysis *View Q&A on Wall Street reform*Full coverage of regulatory news

“Unlocking the potential of Genzyme’s experimental multiple sclerosis drug Campath could be key to prying a higher price for the U.S. biotech from Sanofi-Aventis,” writes Lewis Krauskopf and Ben Hirschler. *View analysis *View WSJ blog

General Electric is building up its industrial business with a $3 billion bid for Dresser Inc. The deal announcement came the same day as oilfield services company Wellstream rejected GE’s takeover approach. *View article

The Great American IPO?

GMWe (the taxpayers)  paid some of the $50 billion to bail General Motors out of its bankruptcy misery last year.  Now, the former American industrial icon is going to launch one of the biggest U.S. IPOs  of the decade.

According to estimates by Independent International Investment Research, GM’s initial offering would raise $12 billion, higher than any U.S. IPO this year and exceeding all over the last ten years, except for Visa’s offering in 2008 and AT&T Wireless in 2000.

The Wall Street Journal said this morning that GM is close to picking JPMorgan and Morgan Stanley as lead underwriters for the IPO. The U.S. Treasury, which owns  a 61-percent stake in GM, said on Thursday that the timing would be decided by GM, based on market conditions.

Tulane M&A Conference: Live coverage

Get live coverage from the M&A and corporate law conference by reporter Jessica Hall.

How cutting prop desks hits M&A

A wee while ago, DealZone posited that bonus-hungry bankers who had gravitated to bank prop desks might return to the once-glorified M&A desks after the Obama administration targeted banks’ proprietary trading as a business too risky for banks. A logical argument, but one that ignored an aspect of the M&A game that is becoming starkly obvious: deals putting trading operations into banks are clearly at risk.

A source tells us that JPMorgan is rethinking its planned $4 billion purchase of RBS Sempra with an eye to let the U.S. power and gas businesses be bought by Sempra Energy, which jointly owns RBS Sempra with Royal Bank of Scotland. This would leave the U.S. bank with the joint venture’s oil operations and all of the non-U.S. businesses, a source familiar with the matter said.

JPMorgan started exclusive talks with RBS and Sempra on about Jan. 20, after warding off rival suitor Deutsche Bank, which is not expected to have re-entered any talks, according to sources familiar with the situation. But if U.S. banks wind up having to chop and trim their own deals to conform with new regulations, European and Asian rivals may well wind up picking up high-octane U.S. trading assets.

Reinventing Glass-Steagall

With Congress already debating a sweeping overhaul of financial regulation, perhaps the most enduring regulatory stricture of the Depression era is again getting an airing in Washington. The venerable Glass-Steagall laws that barred large banks from affiliating with securities firms and engaging in the insurance business were repealed in 1999. Now, as the banks try to move on from the dreaded salary caps and the humiliation of TARP, lawmakers are wondering whether getting rid of Glass-Steagall was such a good idea.

Financial giants such as Goldman Sachs could be broken up under two bills introduced in Congress on Wednesday, one with the backing of former Republican presidential nominee John McCain. Both would reinstate Glass-Steagall. Passage of the Cantwell-McCain bill would force firms at the center of last year’s financial crisis — such as Goldman Sachs, Morgan Stanley, Citigroup, JPMorgan Chase and Wells Fargo — to spin off investment and insurance operations, according to Demos, a progressive think tank in New York. A similar measure was offered on Wednesday by six Democrats in the House of Representatives.

To be fair, many have wondered whether dumping Glass-Steagall was such a good idea. What’s odd is that the discussion about bringing it back comes as almost an afterthought to the massive regulatory reform bill now before Congress. Rather than start from scratch, it may have made more sense to try to reinstate laws that the marketplace was already familiar with, and add new bits around the edges.

Keeping score: Exxon-XTO data points

From the Thomson Reuters data team:

    Exxon Mobil’s $40.7 billion acquisition of XTO Energy ranks as the sixth biggest announced worldwide M&A transaction this year and the fourth biggest US target transaction. The deal ranks as the eighth biggest Energy & Power M&A transaction in history and marks the biggest US transaction since Chevron’s $43.3 billion acquisition of Texaco in October 2000.  The $85.1 billion combination of Exxon and Mobil in December 1998 ranks as the biggest Energy & Power deal on record. Worldwide, energy & power M&A totals $330.9 billion for year-to-date 2009, an 18.1% decrease from last year at this time.  Worldwide M&A in the oil & gas sector totals $203.7 billion, a 17.2% increase over last year at this time. In the US, energy & power M&A accounts for 12.2% of overall activity, a 7.5 decline from last year.  Oil & gas M&A activity in the US totals $74.9 billion, a 35.6% increase over 2008. With the announcement, JP Morgan (advisor to Exxon Mobil), moves from fourth place to third place for worldwide merger advisors, with $467.5 billion in announced deals from 299 deals. Barclays and Jefferies (advisors to XTO Energy) rank 10th and 21st, respectively. In the US, JP Morgan remains in third place with $269.5 billion.  Barclays moves to sixth place from seventh and Jefferies moves from 23rd place to 13th.

Noted: JPM and “Merger Mondays” to come

Richard Bove at Rochdale says JPMorgan is in pole position to benefit from a surge in dealmaking:

“A core theme in our banking thesis is that “Merger Monday” is back.

“There could be a surge in merger and acquisition (M&A) activity that may last two to three years. The dollar is weakening, the yield on junk bonds has plummeted, and the stock market is quite strong. The money is available. No company is better positioned to take advantage of this development than J.P. Morgan.”

Bove says JPM has tens of thousands of middle-market clients as well as long-standing relationships with the biggest U.S. companies, such as Mars and Black and Decker.