Opinion | Goldman Sachs' BAIC exit adds to listings drama

With the World Cup serving up a reminder on the importance of tactics to success on the field, the lesson appears to have been heeded by Goldman Sachs with its strategic retreat from a mainland initial public offering.

Before the opening match of the soccer extravaganza, the Goldman bankers made a decisive play in the long-running effort to float BAIC Motor in Hong Kong - they dropped out of the syndicate altogether.

The importance of Goldman to BAIC is not in doubt. The state-owned carmaker was trying to haggle over its maiden share sale in a deal that would have valued the company at about US$2 billion. The discussions - which can be tedious at times but sometimes rather fierce - took place with a consortium of deal-hungry banks last week.

The US investment bank earned a reputation for lucrative deals by helping a slew of listings of the mainland's largest banks and insurance firms, including the US$3 billion offering of People's Insurance Co of China in 2012.

Despite having strong connections with the carmaker, Goldman had proceeded cautiously on the offering. It was also pursuing other possible deals, all part of its efforts to generate revenue growth and secure the top spot on the all-important league table.

However, it is worth noting that pulling out from a prolonged listing is a fairly common tactic aimed at regaining control of an offering. In the fast-changing dealmaking world, anything can happen at the last minute, in spite of an issuer's mandate for banks to handle the deal.

BAIC manufactures Hyundai and Mercedes-branded vehicles for the mainland market through joint-venture agreements.