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 the Swiss Bank Corporation in 1995 and ultimately became a part of UBS.
This bank was founded in 1946 by Siegmund Warburg and Henry Grunfeld. Siegmund was a member of the Warburg family, a prominent German-Jewish banking family. Henry Grunfeld was a former industrialist in the German steel industry, and is also Jewish.[1] Warburg and Grunfeld fled Nazi Germany in the 1930s.[1]
S. G. Warburg and Co. were recognised for its pioneering mergers and takeover work in the UK in the 1960s. These works included the first ever hostile takeover in the UK and the first-ever Eurobond issue, which fostered the new Eurodollar market. The firm's acquisition of Seligman Bros. in 1957 was a significant event in its rise to prominence; through this, Warburg gained a place on the Accepting Houses Committee, which is composed of the 17 top merchant banks with access to cheap capital backed by the Bank of England.[2]
In 1958–1959, Tube Investments, advised by S. G. Warburg & Co, fought a fierce and ultimately successful battle to acquire British Aluminium in a bidding war with a consortium of City of London bankers led by Morgan Grenfell. This battle is now remembered as the "Aluminium War"[1] and started a shift away from relational banking towards competitive banking.[3]
The bank gained clients and grew rapidly in the 1960s and 1970s. In the early 1970s, S. G. Warburg entered into a U.S. joint venture with Paris-based Paribas (Banque de Paris et des Pays-Bas, prior to the bank's nationalisation in 1982) named Mercury Securities.[4][5] 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.[6] 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.[6][7][8]
A major participant in the "Big Bang" reforms of the 1980s under the leadership of its chief executive Sir David Scholey, it acquired stockjobber Ackroyd & Smithers, stockbroker Rowe & Pitman, and the government gilt broker Mullens & Co. in August 1984.[9] The bank became the preeminent UK-based M&A (merger and acquisition) adviser, equity underwriter, research house and (via its Mercury Asset Management subsidiary) asset manager by the early 1990s. At its peak more than half the companies on the FTSE 100 used Mercury Asset Management for investment management purposes.[10]
Following another flawed and costly expansion into the United States, in 1994 a merger was announced with Morgan Stanley, but the talks collapsed.[11]
The following year S. G. Warburg was purchased by Swiss Bank Corporation.[12] 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.[13] In 1997, SBC Warburg was merged with U.S. investment bank Dillon, Read & Co. to create Warburg Dillon Read.[14]
^"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, 13 July 1982
