Lehman’s Moment in the M&A Sun

Leap year comes just once every four years. This time around, it has coincided with something a lot rarer: Lehman Brothers sitting at the top of the merger-advisory league tables.

Two months into 2008, Lehman Brothers leads the list of investment banks advising on mergers and acquisitions, as measured by the total value of deals in which it had a role, according to Dealogic. Among Lehman’s big-ticket assignments: Working with Yahoo, alongside Goldman Sachs, in its response to Microsoft’s $44.6 billion unsolicited bid; and providing counsel to Chinalco when that Chinese company, along with Alcoa of the United States, quietly bought 12 percent of Rio Tinto, the mining behemoth that is fending off a hostile bid.

Lehman has not held the No. 1 spot, either for the whole year or for the January-February period, since Dealogic began keeping track of such things in 1995.

Over the past few decades, Lehman has had its ups and downs in the investment banking business. It went from the top tier in the 1970s and 1980s to what The New York Times recently described as a “one-trick bond shop” in the 1990s. In recent years, under its current chief executive, Richard Fuld Jr., it has generally ranked high on the league tables — though never at the top.

But in the first two months of 2008, Lehman had a piece of 19 deals valued at more than $84 billion, Dealogic said. That was even more than Goldman, the perennial leader in the annual league tables, which had 28 deals valued at $76 billion.

And what about deal-making in general?

Unsurprisingly, Dealogic’s data show that 2008 is beginning at a much slower pace than the previous year, when the private equity boom was in full force.

The volume of global announced deals was $468.8 billion, down 27 percent from the comparable period in 2007.

Strategic mergers, or those in which one operating company buys another, accounted for $415 billion of that total, down 13 percent from a year ago. Acquisitions by private equity firms were just $34 billion, a 67 percent decline from a year earlier.

Consider this additional data point: At this time in 2007, the biggest buyout of the year was a $44 billion takeover of TXU, the Texas utility giant. This year, the biggest buyout so far is a $3.2 billion deal for Migros Turk, a Turkish supermarket chain.