Wall Street investment banking giant Goldman Sachs has confirmed it's in a "formal process" to buy the 55% in its Australasian joint venture that it doesn't already own, Goldman Sachs & Partners, from the about 130 partners including eight in New Zealand.
Goldman Sachs said the 55% stake it doesn't own is held by both current and former Goldman Sachs & Partners management and employee shareholders. The proposed acquisition, the terms of which Goldman Sachs isn't disclosing, ultimately requires a 75% minimum acceptance by shareholders and will also be subject to "relevant" regulatory approvals.
As reported by interest.co.nz earlier this week, the deal will facilitate the full integration into Goldman Sachs of the Australian and New Zealand businesses, which have operated as a joint venture since 2003. Full ownership by Goldman Sachs is likely to see the local operations leverage a stronger balance sheet to expand into areas such as forex, derivatives, debt capital markets and corporate lending.
“Australia and New Zealand represent an important part of our growth strategy,” said Lloyd C. Blankfein, Chairman and CEO of Goldman Sachs.
“This investment underscores our desire to continue to strengthen our Australasian client franchise,” Blankfein added.
The Australian Financial Review reported today that the deal values Goldman Sachs & Partners at between A$800 million and A$1.2 billion, suggesting a nice pay day ahead for the 130 partners. Based on the mid-point value of A$1 billion, the partners would split about A$550 million giving them about A$4.23 million (NZ$5.7 million) each. The AFR said the partners had been sent documents outlining the terms of the offer and were likely to vote in six to eight weeks time.
Goldman Sachs' co-CEO Stephen Fitzgerald said full integration of the resources and strengths of Goldman Sachs and Goldman Sachs & Partners will boost the capabilities available to clients and provide additional opportunities for Goldman Sachs staff.