Case | HBS Case Collection | January 1998 (Revised November 2003)

Morgan Stanley and S.G. Warburg: Investment Bank of the Future (A)

by James K. Sebenius and David T. Kotchen

Abstract

Describes secretive negotiations that took place between the top executives of Morgan Stanley and S.G. Warburg in the fall of 1994, when the two firms were contemplating a merger that would create one of the world's most powerful investment banks. By December, in order to speed post-merger reorganization, the handful of executives who have been conducting the talks are considering disclosing the proposed merger to the top 100 managers at each firm. The goal is to complete the merger and announce it publicly by December 19. Taking the position of a key executive and point person in the negotiations at either Morgan Stanley or S.G. Warburg, students must decide whether to draw 100 managers at each firm into the deal before it is finalized, as well as how to implement the merger once this decision has been made.

Keywords: Negotiation; Investment Banking; Mergers and Acquisitions; Consolidation; Banking Industry; Financial Services Industry;

Citation:

Sebenius, James K., and David T. Kotchen. "Morgan Stanley and S.G. Warburg: Investment Bank of the Future (A)." Harvard Business School Case 898-140, January 1998. (Revised November 2003.)