Three months before Bank of America Corp. bought Merrill Lynch & Co. in September 2008, Stefan Selig, then global head of mergers and acquisitions at BofA, knew that it might not be the best time for a transformative deal. “The last thing you want to be doing is pursuing a strategic transaction and realize your adviser is worried about their own issues,” Selig told an interviewer at the time.
BofA CEO Kenneth Lewis did buy Merrill, of course, triggering government investigations and shareholder lawsuits stemming from allegedly improper disclosures about bonuses. A string of senior banker defections followed. But Selig, who in July became executive vice chairman for global corporate and investment banking at the combined firm, is undeterred. He believes that BofA–Merrill Lynch’s broader reach makes it a force to be reckoned with. It’s hard to argue with the numbers. Last year, without Merrill, BofA ranked just ninth in equity and debt financing by revenue earned and 13th in M&A, according to Dealogic. But this year through September 23, the combined firm ranked fourth in fee revenue for debt financing and fifth in equity financing and M&A. Merrill gave BofA a strong investment banking presence in Europe and Asia, and its IPO platform complements BofA’s legacy high-grade and leveraged loan businesses.
“When you look at our combined platform, we have no holes in our business,” says Selig, 46, who believes BofA–Merrill is within striking distance of an even grander goal: to be a top-three player in equity, debt and M&A in the U.S. and globally.
Selig nearly joined the military instead of becoming a banker. After growing up on the Upper East Side of Manhattan, he studied economics at Wesleyan University and spent a summer in the Marine Corps in Quantico, Virginia. After graduating, he considered a commission to become a second lieutenant, but Wall Street beckoned. Selig joined the M&A group at First Boston Corp. in 1984 as an analyst. After stints at Wasserstein Perella & Co. and UBS, he was tapped in 1999 to become co-head of M&A at Bank of America. Together with Steven Baronoff, his counterpart from the Merrill side who became chairman of global M&A, Selig is leading the charge to reinvigorate the newly combined firm. Both report to Tom Montag, head of corporate and investment banking.
Selig can be a tough negotiator. In one of the most-watched bidding wars this year, he co-advised data-storage giant EMC Corp. as it outbid NetApp to acquire storage-device maker Data Domain. When Data Domain’s board rejected EMC’s $1.8 billion bid, Selig advised sweetening the offer from $30 to $33.50 per share for a deal value of $2.2 billion. NetApp couldn’t afford to match that number and backed out of the bidding.
Selig is willing to walk away too, if the price isn’t right. A case in point is Chicago-based printing giant R.R. Donnelley & Sons Co.’s attempt to buy rival Quebecor World. In May, based on Selig’s advice, Donnelley offered $1.35 billion in cash and stock to buy the Montreal-based company out of bankruptcy. Donnelley twice upped its offer, but Selig held the line when Quebecor refused the higher bids. “Stefan understands where the breaking point is,” says Donnelley CEO Thomas Quinlan.
Deal activity may be slow, but Selig’s phone keeps ringing. In August, BofA–Merrill scored a high-profile assignment by co-underwriting private equity firm Starwood Capital Group’s $931.5 million public offering, the largest of the year. Selig recently advised consulting firm Watson Wyatt Worldwide on its $3.5 billion merger with Towers, Perrin, Forster & Crosby. He is now advising Time Warner on its highly anticipated spin-off of AOL.
Says Leslie Wexner, chairman and CEO of fashion retailer Limited Brands, who has tapped Selig for advice on three divestitures and two acquisitions: “Stefan understands our business and has the ability to keenly assess the markets. That has made him a critical partner.”
