Goldman Sachs, JPMorgan And Rivals Benefit From Healthcare M&As

(MoneyWatch)  Investment banks can thank the healthcare sector -- particularly the drug industry -- for providing much-needed fee income from mergers and acquisitions so far this year. Goldman Sachs, JPMorgan and Morgan Stanley were all able to remain dominant in M&A league tables of financial advisers on a global basis, according to a Mergermarket M&A roundup for the first quarter released today.

Goldman grabbed the first place from JPMorgan compared with the first quarter a year ago with 34 deals valued at $198 billion. JPMorgan fell to number two with 34 deals valued at $162 billion. Morgan Stanley, now in third place, made a comeback from last year when it ranked seventh.

The top three M&A deals in the first quarter were all healthcare related: Pfizer acquired Wyeth for $66.2 billion, Roche Holding angled to acquire the remaining 44 percent of Genentech it didn't already own and more recently Merck said it is buying Schering Plough for a little over $40 billion. These three deals represented 82 percent of M&A activity in North America and almost half of activity globally in the first quarter. Goldman Sachs and Morgan Stanley were each involved in two of these top deals.

Boutique shop Evercore Partners also significantly improved its rankings thanks to the Pfizer deal and to other major investment banks like Citigroup and Merrill Lynch losing ground. Evercore placed seventh in the first quarter, up from the 28th spot a year ago. Another boutique shop, Greenhill & Co., also improved, ending up in the 10th position in the first quarter this year from the 43th spot in the first quarter of 2008.

Despite projections for more healthcare deals as well as consolidation in the technology sector for the rest of the year, which will continue to bring in some revenue for investment banks, the M&A landscape still looks grim. With less than $350 billion of M&A globally for the first quarter, activity is down 27 percent from the fourth quarter 2008 and 40 percent from the first quarter 2008.