Wednesday, May 12, 2010


Goldman Sachs
􀂙 Goldman Sachs was founded in 1869 by Marcus Goldman, a German-Jewish immigrant to the US.
Thirteen years later, his son-in-law, Samuel Sachs, joined the firm and hence the name, Goldman Sachs.
􀂙 In 1896, it was invited to join the New York Stock Exchange. Goldman Sachs had managed the Sears,
Roebuck and Company IPO in 1906, which is billed as one of the biggest such exercises till date.
􀂙 In the year 1974, Goldman Sachs pioneered a new concept in mergers and acquisitions — the white
knight. Electric Storage Battery faced a hostile takeover from International Nickel and Goldman Sachs’
arch rival, Morgan Stanley. The company’s stock was trading cheap when compared to its liquid assets. This
made it a plum target for a takeover.
􀂙 Goldman Sachs knew it could not protect the independence of Electric Storage Battery but it could get its
shareholders a better price. So, it brought in United Aircraft as the white knight and International Nickel had
to fork out a higher price.
􀂙 The client got a higher price and Goldman Sachs a fat fee. More crucial, the message went around quickly
that if you are in a spot of bother, Goldman Sachs are good people to have on your side.
􀂙 Robert Maxwell was found dead, having fallen off his yacht in 1991. He was known to have piled up bank
loans of $2.8 billion and plundered $500 million from two public companies and the pensions of 33,000
British workers.
􀂙 Goldman Sachs found itself in an awkward situation as it was the chief financial “enabler” of Maxwell. In the
end, Goldman Sachs had to pay a settlement of $254 million — the largest in the long history of the City
of London.

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