Goldman Sachs Advises British Candymaker Facing Historic Takeover Bid

The takeover battle was, at that point, the largest in Britain’s corporate history. It began with a press release issued by Jacobs Suchard’s bankers stating the company’s intention to take a 25 percent stake in the maker of Kit-Kat candy bars, with the caveat that it would not launch a bid for the company for at least a year unless another party made an offer for Rowntree. Rowntree responded with its own release the same day, indicating that it found Jacobs’ offer “wholly unwelcome.” After Nestlé presented a bid of GBP2.1 billion (US$3.9 billion), a bidding war escalated.

Goldman Sachs and British merchant bank J. Henry Schroder Wagg & Co. advised Rowntree in the process, which was completed when Nestlé acquired Rowntree for GBP2.56 billion (US$4.5 billion). At the time, Goldman Sachs was the number one M&A advisor in Great Britain, having advised on deals valued at approximately US$13.84 billion–the first time an American bank held this position.

Goldman Sachs had been operating in London since 1970 and had worked on several large-scale privatizations in the country in the mid-1980s including British Gas and British Petroleum (and also the latter’s GBP2.51 billion takeover of Britoil in 1988). Post-“Big Bang,” many US banks focused heavily on the Eurobond market, but Goldman Sachs sought out M&A and underwriting opportunities and worked extensively with British and other European companies to expand their defense strategies, seeking to build relationships with companies and serve them in a multitude of ways.

 

This article was originally published as part of a series commemorating the 150th anniversary of Goldman Sachs’ founding in 1869.