Verizon-AOL: Another Deal Without Big Banks

Verizon-AOL: Another Deal Without Big Banks

This April 7, 2013 photo shows the Verizon Studio booth at MetLife Stadium, in East Rutherford, N.J. (Mel Evans/AP Photo)
This April 7, 2013 photo shows the Verizon Studio booth at MetLife Stadium, in East Rutherford, N.J. (Mel Evans/AP Photo)

 

(Wall Street Journal) – Verizon Communications Inc.’s $4.4 billion all-cash acquisition of AOL Inc. is the latest example of a headline-grabbing deal getting done without the help of the big banks.

Instead of turning to one of the mega-banks for help on the transaction, Verizon tapped Guggenheim Partners and LionTree Advisors LLC, while AOL worked with Allen & Co. Dealogic says it’s the fifth-largest deal ever assembled without a bulge-bracket bank.

AOL Chief Executive Tim Armstrong told CNBC Tuesday morning that talks between the two parties started at Allen & Co.’s 2014 media conference held in each July in Sun Valley. Mr. Armstrong said AOL did not run an auction process.

Less than two months ago, private-equity firm 3G Capital Partners LP and Warren Buffett‘s Berkshire Hathaway Inc. announced a deal to merge their jointly owned H.J. Heinz Co. with Kraft Foods Group Inc. without involving any big banks. The transaction, valued at roughly $49 billion at the time, is the largest deal ever without any bulge-bracket bank advising on it.

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