This is a million-dollar opportunity lost for investment bankers who could have earned up to 48 million dollars in fees, if the proposed deal between Indian telecom major Bharti Airtel and South Africa's MTN had materialised.
Investment banks generally charge 0.5-2 per cent of the entire deal amount as advisory fees for the M&A transaction.
While the exact amount that investment bankers could have earned from Bharti-MTN deal could not be ascertained, it could have been up to 48 million dollars, based on the upper limit of potential fee income from the proposed 24 billion dollar deal.
Bank of America Merrill Lynch and Deutsche Bank were advising MTN, while Standard Chartered and Barclays advised Bharti Airtel.
While a small portion of the fee income might have already gone to the pockets of bankers and financial advisors, they generally get bulk of the fees only after completion of the deal. However, lawyers and accountants, who work on fixed fees, would not suffer so much loss, experts said.
"Investment banks generally charge 0.5-2 per cent of the total deal amount but it would be difficult to give the exact figure that the investment banking community have lost in the Bharti-MTN deal," global consultancy firm PwC executive director Sanjeev Krishnan said.
