(31 May 2011 – Australia) Subject to regulatory approval, Goldman Sachs is to take over its Australian division on 1 July this year.The company’s 141 Australian-based partners voted unanimously to approve the A$550 million buyout of the local shop.
The merger implementation, which a task force is working on, is expected to formalise reporting lines for the local team through Hong Kong, with Australia to be part of the Asia ex-Japan division.
Goldman acquired 45 percent in 2003 for A$135 million, valuing the entire firm at A$300 million.
The A$550 million Goldman is paying for the rest values the entire business at A$1 billion (book value of A$650 million) and who knows what money has been pulled out in between time.
Equities trading is seen as a key area in which the firm can expand, with the benefit of more money from New York and full integration in the Goldman platform and its US$1 trillion balance sheet.
The local arm has just taken out some dividend, so it’s hard to know who gets what, especially with the top 20 or so partners to be tied in with retention payments.
The buyout will be paid 80 percent in cash and 20 percent in equity, with the top 20 partners getting about 40 percent of the loot, or about A$220 million plus retention deals to keep them loyal.