S. G. Warburg & Co.

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S. G. Warburg & Co.
Former type Public
Industry Banking
Fate Acquired
Successor(s) Swiss Bank Corporation
Founded 1946
Defunct 1995
Headquarters London, UK
Key people Sir Siegmund Warburg, (Chairman)
Employees 6,000

S. G. Warburg & Co. was a London-based investment bank. It was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index. The firm was acquired by Swiss Bank Corporation in 1995 and ultimately became a part of UBS.

History[edit]

Founding and early history[edit]

This bank was founded in 1946 by Siegmund Warburg, a member of the Warburg family, a prominent German-Jewish banking family and Henry Grunfeld, a former industrialist in the German steel industry.[1] Warburg and Grunfeld, who was also Jewish, had fled Nazi Germany in the 1930s.[1]

S.G. Warburg and Co. was recognized for its pioneering mergers and takeover work in the UK in the 1960s, including the first ever hostile takeover in the UK and the first ever Eurobond issue, which fostered the new Eurodollar market. A significant event in the firm's rise to prominence was the acquisition of Seligman Bros. in 1957; through this, Warburgs gained a place on the Accepting Houses Committee composed of the seventeen top merchant banks with access to cheap capital backed by the Bank of England.[2]

The period 1958/9 saw the Aluminium War when Tube Investments, advised by S. G. Warburg & Co, fought a fierce and ultimately successful battle to acquire British Aluminium.[1]

1960s, 1970s and 1980s[edit]

The bank gained clients and grew rapidly in the 1960s and 1970s, its strong work ethic and rigorous intellectual culture standing in stark contrast to the gentlemanly and clubbable milieu of the traditional City houses.

In the early 1970s, S.G. Warburg entered into a U.S. joint-venture with Paris-based Paribas (Compagnie Financi ere de Paris et des Pays-Bas, prior to the bank's nationalization in 1982) named Mercury Securities.[3][4] In 1974, S.G. Warburg and Paribas took a 40% interest in A.G. Becker & Co., a U.S. based brokerage. Although the joint-venture initially provided an international dimension for its three members, the relationships soured in the late 1970s and early 1980s.[5] The joint-venture was plagued by competition between Warburg and Paribas, as well as cultural conflicts between French, English and American executives. Although Warburg had originally planned to buy out Paribas, after Siegmund Warburg's death, Paribas bought out Warburg's interest in the joint venture in early 1983. Following the departure of Warburg from the joint venture, the firm was renamed A.G. Becker Paribas.[5][6][7]

A major participant in the "Big Bang" reforms of the 1980s under the leadership of its Chief Executive Sir David Scholey, the bank became the preeminent UK-based M&A adviser, equity underwriter, research house and (via its Mercury Asset Management subsidiary) asset manager by the early 1990s, employing some 6,000 people worldwide.

Purchase by Swiss Bank Corporation (1995)[edit]

Following another flawed and costly expansion into the US, in 1994 a merger was announced with Morgan Stanley, but the talks collapsed.[8]

The following year S.G. Warburg was purchased by Swiss Bank Corporation.[9] Swiss Bank Corporation merged S.G. Warburg with its own existing investment banking unit to create SBC Warburg, which became a leading player in global investment banking.[10] In 1997, SBC Warburg was merged with U.S. investment bank Dillon, Read & Co. to create Warburg Dillon Read.

After the merger of Swiss Bank Corporation and Union Bank of Switzerland in 1998, Warburg Dillon Read was renamed UBS Warburg. The Warburg name was finally retired in 2003 when the investment banking operation of UBS was renamed UBS Investment Bank.[11]

Notable current and former employees[edit]

Business[edit]

Politics[edit]

Other[edit]

See also[edit]

References[edit]

  1. ^ a b c Outsider who changed the City Management Today, 1 November 1998
  2. ^ Chernow, p. 646
  3. ^ Manfred Pohl, Sabine Freitag. Handbook on the history of European banks. Edward Elgar Publishing, 1994
  4. ^ "The Financial Times has examined the problems which caused S G Warburg, a Mercury Securities subsidiary, and Paribas to lift their joint stake in A G Becker-Warburg Paribas Becker to just over 50%." Financial Times, July 13, 1982
  5. ^ a b Becker Paribus: An Ill-Fated Union. New York Times, August 7, 1984
  6. ^ French Partner To Buy British Share In Becker. New York Times, March 24, 1983
  7. ^ Kathryn Rudie Harrigan. Joint Ventures, Alliances, and Corporate Strategy. Beard Books, 2003
  8. ^ Jilted: Morgan Stanley and S.G. Warburg The Economist, December 1994
  9. ^ Swiss Bank in deal to buy S.G. Warburg New York Times, May 11, 1995
  10. ^ SBC Warburg Company History. Funding Universe, Retrieved August 10, 2010
  11. ^ UBS means RIP for Warburg. The Telegraph, Nov 13, 2002

Bibliography[edit]