The collapse of AIG’s deal to sell an Asian life insurance business to Prudential PLC of the United Kingdom isn’t just a setback for taxpayers.
It’s also a blow to big banks that were looking at a big fee payday.
Giant global banks were set to split an estimated $850 million in merger-and-acquisition advice and underwriting fees on the deal, ThomsonReuters said. The $35 billion deal fell apart this week under pressure from Prudential shareholders.
That includes $53 million that would have been split among five banks advising AIA, the AIG unit that outspoken CEO Robert Benmosche (right) was trying to sell. Those banks include Citi , Goldman Sachs and Morgan Stanley , ThomsonReuters said.
It also includes $59 million that was to be split among four banks advising Prudential, including JPMorgan Chase . Prudential isn’t related to Prudential Financial of Newark, N.J.
The 30 banks that were to syndicate a $21.7 billion rights offering to help the U.K.’s Prudential raise capital missed out on an estimated $740 million in fees, ThomsonReuters said, including HSBC , Credit Suisse and a U.K.-based JPMorgan unit.
The loss of a single deal will hardly crush any of the banks, which are still minting money at a time of low interest rates and reduced competition. But the fees would have been nice at a time when the trading business that has been so good to the banks is starting to look a lot less steady.