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For anyone expecting a big rebound in mergers and acquisitions, 2011 was a disappointment. A sluggish world economy and a spiraling euro zone crisis muted deal activity. Through early December announced global M&A volume stood at $2.6 trillion, up just 4 percent from $2.5 trillion a year earlier, according to Dealogic. But for rainmakers things looked brighter: Fee revenue rose 9 percent, to $17.7 billion.

The bankers featured in Institutional Investor’s 2011 Rainmakers of the Year claimed a big chunk of those earnings. The top ten deals by fees, as estimated by investment consulting firm Freeman ­Consulting, fetched a combined $800 million, just shy of the $839 million total for 2010.

Cross-border mergers led the way. Five of the ten transactions involved companies from two countries, including the No. 1 deal, French drugmaker Sanofi’s $21 billion takeover of U.S.-based Genzyme Corp. These tie-ups proved lucrative for bankers and shareholders despite a 3 percent year-over-year drop in cross-­border deal volume, from $861 billion to $834 billion, Dealogic reports.

Likewise, some sectors yielded more riches than others. Four of our top ten deals are in health care, which remained robust with volume of $220 billion as of early December, a 5 percent increase over 2010. Telecommunications and high-tech take four positions, even though telecom deal volume plunged 18 percent, to $200 billion. And old media coughs up the big bucks as Comcast Corp.’s $31.5 billion buyout of NBC Universal claims the No. 4 spot. 

Will 2012 bring more rain? “There has certainly been a recent slowdown in announcement activity because of market volatility,” says Anthony Whittemore, New York–based co-head of M&A Americas at Deutsche Bank. “But as the fundamental drivers for deals remain in place, we could see a good snapback in M&A early [in 2012] if volatility subsides.”  — Xiang Ji

1/Stuart Smith & Team/Credit Suisse

For Genzyme, it was the opening salvo of a war on the drugmaker. In February 2009, Henri Termeer, then ­Genzyme’s chairman, president and CEO, received a scathing warning letter from the U.S. Food and Drug Administration. The document listed numerous violations of FDA manufacturing standards at the biotech company’s plant in Allston, ­Massachusetts. It escalated a mounting crisis that included delayed approval of Lumizyme, a drug therapy for the rare genetic disorder Pompe disease, and knocked more than 25 percent off ­Genzyme’s share price in 2009 alone.

Carl Icahn and his fellow activist investors demanded a shake-up. Others wanted to oust Termeer, who had been CEO since 1985. Then in the summer of 2010, Paris-­based pharmaceuticals giant Sanofi-­Aventis (now called Sanofi) offered to buy the company for $18.5 billion.

Cambridge, Massachusetts–based ­Genzyme needed a straight-­talking banker who understood the company. Girding for a proxy fight that would be followed by a takeover defense against Sanofi, it called in Stuart Smith, global co-head of health care at Credit Suisse Group’s investment banking division. The 56-year-old Connecticut native has a ten-year history with Genzyme, having advised on such deals as its $1 billion acquisition of GelTex Pharmaceuticals in 2000 and its $600 million purchase of SangStat Medical Corp. in 2003.

New York–based Smith, who worked closely with D. Scott ­Lindsay, Credit Suisse’s co-chairman of global M&A, helped draw up a broad cost-­reduction plan as part of Genzyme’s defensive efforts. The cuts included 1,000 layoffs and slashing of travel expenses. “It was difficult when we were in those emotional times,” says Michael Wyzga, Genzyme’s former vice president of finance and CFO. “Having someone who can offer frank and pragmatic advice was critical in that boxing match,” Wyzga adds of Smith.

The lawyer-turned-banker’s deep pharma connections sped up the divestment of Genzyme’s noncore businesses, a move that commanded a higher price from Sanofi as it closed in for the kill. In September 2010, Smith got on the phone with his old friend David King, chairman and CEO of Burlington, North ­Carolina–based Laboratory Corp. of America, to wrap up negotiations for LabCorp’s $925 million all-cash purchase of Genzyme’s genetics division. Sanofi finally raised its offer from $69 per share to roughly $74, for a price tag of $20.86 billion when the deal closed in April.

Seven banks shared more than $120 million in the top deal of 2011 by fees, according to Freeman Consulting. Credit Suisse tied with Genzyme co-adviser Goldman Sachs Group as the best-paid bank, earning $31.2 million. Leading the Goldman team was Jack Levy, co-chairman of M&A. Evercore Partners and JPMorgan Chase & Co. each earned $27.6 million for advising Sanofi.  — X.J.

2/George (Woody) Young III & Team/ Lazard

Pick a major U.S. telecommunications player and chances are that Woody Young has advised it. The lanky, quick-­witted banker can also trace that company’s history back a decade or two, recounting deals as if they happened yesterday. Young’s encyclopedic knowledge and his long-term outlook make him a go-to banker for telecom CEOs. Lazard’s New York–based head of technology, media and telecoms advised Cingular Wireless Corp. on its $41 billion merger with AT&T Wireless Services in 2004, Sprint Corp. on its $47 billion takeover of Nextel Communications in 2005 and AT&T on its $89 billion acquisition of BellSouth Corp. the following year.

When Qwest Communications International began considering a $22 billion sale to then-CenturyTel in late 2009, Young had strong ties to both sides. That year he and his team had represented CenturyTel during its $12 billion acquisition of Embarq Corp. (the combined company later renamed itself CenturyLink). His relationship with Qwest dates back to 1999, when he advised the Denver-­based phone company on its $45 billion merger with U.S. West.

Young, 52, ended up as lead financial adviser to Qwest in the top telecom deal of 2011 by estimated fees, earning $20 million for Lazard. Early on he helped clarify Qwest’s best strategic option when a major private equity firm was vying with Monroe, ­Louisiana–based Century­Link. “Knowing CenturyLink’s management and how they had garnered synergies from their previous transaction gave us great confidence that they were the ideal partner to create significant value with the combined company,” says Young, referring to the almost $1 billion in synergies achieved by CenturyLink since its Embarq purchase.

Young joined Lazard in 2009 from ­Merrill Lynch & Co., where he was global head of TMT. He’d moved to Merrill the previous year after 14 years at Lehman Brothers, most recently as head of the global communications group. Young did his first telecom deal in 1990; then at First Boston Corp., he helped take Telecom Corp. of New Zealand private in its NZ$4.25 billion ($2.54 billion) sale to ­Ameritech Corp. and Bell Atlantic Corp.

He’s since built lasting company relationships that transcend personal ties with chief executives. When advising Qwest on its merger with U.S. West, for example, Young worked with then-CEO Joseph Nacchio. Three years later he counseled ­Nacchio’s successor, Richard Notebaert, on the $7 billion sale of the company’s directories businesses to private equity firms Carlyle Group and Welsh, Carson, Anderson & Stowe. During the CenturyLink tie-up, completed in April, Young advised Edward Mueller, CEO of Qwest since 2007.  — X.J.

3/Luca Ferrari & Team/Goldman Sachs

In the M&A world lunch is seldom just lunch. Ten days after March’s Japanese tsunami, ­Yasuchika Hasegawa, president and CEO of Takeda Pharmaceutical Co., visited the posh Stoke Park country club on the outskirts of London. There he and two of his senior managers dined with Håkan Björklund, then CEO of Zurich-­based rival Nycomed International Management, and the heads of Nycomed’s three major private equity owners. After lunch Hasegawa and Björklund signed a memorandum of understanding for Osaka-­based Takeda’s $13.7 billion purchase of Nycomed, the third-­largest overseas acquisition by a Japanese company.

Luca Ferrari, London-based head of Northern European M&A at Goldman Sachs and lead adviser to Nycomed, didn’t organize this ceremonial meeting to cheer up the Japanese executives. According to people who attended, it was calculated to mesh with the ringi decision-­making process in Japanese corporate culture, which seeks company­wide consensus once a top manager approves a decision. Ferrari wanted to put Nycomed in a favorable position during the due diligence phase, when buyers often find reasons to lower their purchase price.

It worked. Not only did it take less than two months to reach a final agreement and win approval from both companies’ boards—a rare feat in M&A—but the price held on without major adjustments.

The all-cash deal, which closed in September, combines two companies that complement each other geographically. Having added Europe and emerging markets to its traditional Japanese and North American strongholds, Takeda is now the world’s No. 12 drugmaker by prescription sales, up from 16th place before the merger. “Luca and his team are thoughtful and confident bankers,” says Björklund, who was succeeded in September by Frank Morich, Takeda’s former vice president of international operations. “We had a great long-term relationship, and they helped us reach the finish line.”

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