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Monkeys willing to work 100-week until this massive deal gets completed...?
Consortiums are formed to spread risk around
This applies more to loan syndication, when the lead bookrunner doesn't want to hold all the paper. In this case, the boutiques were brought in for advisory and anti-trust expertise. I doubt they will be holding any of the associated paper.
Companies will hire multiple advisors to give banks advisory credit. In return, banks will lower financing charges as acqusition financing tends to be very profitable. Its an incentive saying "hey we will charge you less for financing if you give us advisory credit so we can market around how we advised this deal". Most of the time, its usually one advisor that really helped with the strategy of the acqusition and the other banks can provide value in specific issues ie fairness opinions, etc.
Workerbee is spot on. It's industry politics.
agreed. additionally, it "keeps the other banks" honest. There's usually one bank that leads but it's helpful to get some other opinions, as workerbee mentioned. Additionally, big corps usually have relationships with multiple banks so it's helpful to spread the fees around.
Unless committed financing is involved, one investment bank can do 100% of the work (even with multiple bookrunners / advisors, the lead bank will always do most of the real work). Assuming the situation doesn't involve committed financing (and thus no need to spread risk), having multiple bookrunners / advisors serves two main functions from the company's perspective.
1) Market signaling - by having reputable banks associated with your deal (whether M&A or financing), you are telling the market that your numbers and analysis have been vetted by impartial third parties (not truly impartial, but I think you get my meaning)
2) Mouth feeding - Even though most deals only require one firm to execute, it is in a company's interest to retain multiple advisors / bookrunners in order to maximize the number of people thinking up M&A and financing ideas for you. By repeatedly selecting only one advisor or bookrunner, you are telling the market that you aren't interested in their ideas.
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