Morgan Stanley stands to receive the largest advisory fee paid on any U.S. bank M&A deal since 2000, with the company set to receive $82 million for serving as the sole financial adviser to First Horizon Corp. on its $13.68 billion deal with The Toronto-Dominion Bank announced in February.
The $82 million fee, which is contingent upon the deal's closing, would be more than twice as large as the previous record-holding fee, which was the $39.5 million that Goldman Sachs & Co. LLC received when it advised PrivateBancorp Inc. on its $4.93 billion sale to Canadian Imperial Bank of Commerce in 2016, according to S&P Global Market Intelligence data.
Deal fee record holders
Goldman Sachs also held a tie with RBC Capital Markets LLC for the third-largest advisory fee since 2000, as both companies received $39 million for advising on the $28.39 billion merger of equals between SunTrust Banks Inc. and BB&T Corp., now Truist Financial Corp., announced in February 2019.
Of the top 20 largest advisory fees paid on U.S. bank M&A deals since 2000, Goldman Sachs has received six of the fees, the most of the group.
Once the payout of the $82 million fee to Morgan Stanley is completed, it will be the first time in nearly 16 years that Goldman Sachs does not hold the record for largest advisory fee in the 21st century.
The company originally set the record in December 2006 when it received a $35 million advisory fee for advising The Bank of New York Mellon Corp. on its $16.86 billion acquisition of Mellon Financial Corp., then beat that with the fee from the PrivateBancorp-Canadian Imperial Bank of Commerce deal in 2016.
Prior to this $82 million fee, Morgan Stanley’s largest advisory fee in the 21st century was $28 million for advising First Horizon's acquisition of IBERIABANK Corp. announced in November 2019.
Keefe Bruyette & Woods Inc. served as the adviser to IBERIABANK on that deal and received a $29 million advisory fee.
Large fees in the last decade
The $82 million fee also sets the record for the largest advisory fee received so far this decade, surpassing the $37 million advisory fee that J.P. Morgan Securities LLC received for advising Webster Financial Corp.'s $5.23 billion acquisition of Sterling Bancorp in April 2021.
J.P. Morgan also received a $36 million advisory fee, just six months later, for advising Umpqua Holdings Corp. on its $5.15 billion acquisition of Columbia Banking System Inc.
Led by those two advisory fees, 2021 saw the highest cumulative total of advisory fees on deals worth $500 million or more.
There were 19 deals that were worth at least $500 million in 2021, which is the most of any year over the past decade. The combined advisory fees from those deals were worth over $500 million, which is nearly double the amount of any year over the past decade.
