Rothschild & Co experienced a 10% decline in first-half sales, primarily driven by a significant plunge in dealmaking activity. The investment bank's net income, group share, almost halved to 128 million euros ($139 million) from the previous year. This was largely attributed to its global advisory division, where fees from mergers and acquisitions (M&A) plummeted by 30% in the first half of the year.
Globally, M&A activity saw a 40% year-on-year decrease during the first six months of the year, according to Dealogic. Despite this downturn, investment bankers and lawyers are expressing optimism that the stock market's recovery will gradually restore confidence in dealmaking. Managing Partner Francois Perol confirmed that the investment bank expects net income to more than halve for the entire year due to the sharp fall in dealmaking.
The Rothschild family's holding company, Concordia, along with three other wealthy French families, is in the process of taking the company private. The consortium, which values Rothschild at 3.7 billion euros, already owns over 80% of the shares and has until September 8 to reach the 90% ownership threshold to initiate a squeeze-out of remaining minority shareholders.
First-half revenue for the global advisory business was 676 million euros, a 21% decrease from the record 857 million euros in the previous year. Profit before tax for this segment dropped by 51% to 80 million euros. While M&A revenue was down 30% to 448 million euros, the financing advisory revenue increased by 6% to 228 million euros, including Redburn. The firm's total headcount increased by 14% to 4,883 compared to the prior year, partly due to the integration of Redburn.
