After a less than stellar year for the mergers and acquisitions market in 2011, and the worst start to the year it has had for a decade, the potential merger between Glencore and Xstrata is likely to give a more than $100m boost to the advisers involved.

Deutsche Bank, Goldman Sachs, JPMorgan and Nomura are advising Xstrata on the deal, while Citigroup and Morgan Stanley are advising Glencore.

Other banks could still be added to the roster, people familiar with the situation said. Credit Suisse, for example, which was one of the three lead arrangers with Citi and Morgan Stanley on Glencore’s record-breaking initial public offering last year, has not got a role on the latest deal.

The merger, if completed, would be the biggest in any sector globally since September 2010.

Even though the merger would be the largest mining deal ever by value according to Dealogic, the fees are unlikely to break records in M&A. As an all-share deal, expensive financing fees will not need to be paid, bringing down the cost, said the people familiar with the situation.

Thomson Reuters and Freeman Consulting estimate the deal value is $42bn, based on Xstrata’s enterprise value. Freeman estimates that Xstrata and Glencore could each pay up to $70m in fees, a total of $140m.

Some of the people familiar with the situation estimate the banks could be paid about $15m each, leading to an estimated $100m total fee pay-out.

Lawyers will also share in the fees, with Linklaters advising Glencore and Freshfields advising Xstrata.

Including payments for Xstrata’s accountants, Ernst & Young, and Glencore’s accountants, Deloitte, the fee haul would be about $150m, said one of the people familiar with the situation.

The biggest M&A fees ever paid were by RBS for its $98.2bn acquisition of ABN Amro, which came to $299m, according to Thomson Reuters. The advisers all declined to comment.

Citi and Morgan Stanley have already earned significant amounts for their work for Glencore, having won the lion’s share of fees as lead arrangers for its £11bn float.

The commodity trader revealed at the time that the global offering cost it $435m, including taxes. Up to $275m of that was paid in fees to the underwriting banks.

Until the deal is agreed it is unclear what the effect will be on the adviser rankings, but it will further boost Morgan Stanley’s dominance of the M&A market by fees and volumes so far this year.

According to Thomson Reuters, this year so far Morgan Stanley has earned the most for worldwide completed adviser fees for M&A, with $124m in fees for 15 deals. It also tops the table by value of deals done, at about $25.4bn this year.

In the fees league tables it is followed by Credit Suisse with about $79m for the same number of deals, then JPMorgan and Goldman Sachs.

Additional reporting Jack Farchy and Sylvia Pfeifer

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