- REUTERS/Ahmad Masood
- The $69 billion CVS-Aetna deal could generate more than half a billion in fees for Wall Street investment banks.
- The latest in a wave of megadeals is another big win for Goldman Sachs, as well as a handful of independents.
On Sunday, CVS Health agreed a deal to buy insurance giant Aetna in a $69 billion deal. The bankers who spent their weekend closing the transaction, the latest in a wave of megadeals, stand to earn a colossal amount of fees for their firms.
Between advising on the transaction – which could generate significant regulatory scrutiny – and arranging more than $40 billion in financing, seven banks could split more than $500 million if the deal closes.
It’s a big win for Goldman Sachs, which advised CVS on the deal along with Barclays and boutique Centerview Partners. The banks will split $100 million to $125 million, according to Jeffrey Nassof, director of consulting firm Freeman & Co.
It’s also another big win for boutiques and independents, with three independents advising Aetna: Lazard, Allen & Co., and Evercore will also split $100 million to $125 million, according to Nassof.
The $250 million tab is the second-biggest payday of the year for advisory fees on an announced deal, according to Nassof, following only the Broadcom-Qualcomm transaction, which is very much in limbo.
The Aetna-CVS deal will also require an enormous amount of financing, where Goldman Sachs once again wins big. Along with Barclays and Bank of America Merrill Lynch, the firm will share in as much as $150 million for arranging the $45 billion bridge loan, and the underwriters could see another $200 million for placing some $40 billion in long-term bond financing, according to Nassof.
All told, that’s potentially $600 million in advisory and financing fees from one deal.