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Japanese Bank, Top U.S. Strategist Form Partnership

December 5, 1990

NEW YORK (AP) _ A top Wall Street mergers and acquisitions strategist announced an agreement Tuesday to ally with Sanwa Bank Ltd. of Japan to form a new investment banking firm.

Michael Duval had been expected to announce a link with a major bank since leaving First Boston Corp. last summer to form his own company, The Duval Group.

The new firm, Sanwa Duval, will be owned by Duval, the bank and other partners, Duval said Tuesday in an interview.

Sanwa Bank has agreed to provide $30 million to back the partnership, he said. Sanwa Duval will take over the operations currently carried out by the Merchant Banking Group of Sanwa’s offices in New York and Los Angeles.

The new firm will be managed by Duval and Shuhei Sato, senior vice president of Sanwa’s merchant banking arm.

Sanwa, the world’s fifth-largest bank, joins several other big banks that have aligned themselves with emerging investment firms. Eric Gleacher, a former Morgan Stanley & Co., executive, last summer formed a partnership with Morgan Grenfell PLC, the merchant banking company owned by Deutsche Bank Group.

Duval, who left First Boston as a managing director, helped arrange that investment firm’s merger with its London-based affiliate, Financiere Credit Suisse-First Boston.

Before joining First Boston in 1984, Duval spent seven years at Mead Corp., and before that served in the Nixon and Ford administrations.

Sanwa Duval will be an investment banker, advising clients on proposed transactions, but will not create its own fund to participate in deals of its own, Duval said.

That decision places Sanwa Duval in a different league from Wasserstein Perella & Co., the investment firm formed by two other First Boston alumni. Although Bruce Wasserstein and Joseph Perella have advised clients on deals including the $24.5 billion buyout of RJR Nabisco Inc., they also have entered into transactions themselves.

Duval said he was more interested in advising long-term clients rather than picking up business on a deal-by-deal basis with clients who are potential rivals in transactions.

Duval said he expects his new firm mostly to advise U.S. companies seeking strategic acquisitions, joint ventures or divestitures. But he said he also expects to handle cross-border transactions, in which one party is American and the other foreign.

While most cross-border deals are likely to involve European parties, Duval predicted the firm will be handling an increasing amount of transactions with Japanese firms.

Although Japanese markets have generally been closed to American buyers and investors, ″I think it’s opening up,″ Duval said.

Sanwa Duval expects to be operating in early 1991, after it has received government approval, Duval said.

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