In order to pave the way for what is easily one of the largest IPOs in US corporate history, Philip Morris has appointed lead managers Credit Suisse First Boston and Salomon Smith Barney to control a partial IPO of Kraft.

Deutsche Bank, Morgan Stanley Dean Witter, UBS Warburg and JP Morgan are thought to be the four banks appointed as senior co-managers of the offering. The use of these in particular reflects the current trend for European-owned banks in the US equity markets. Furthermore, a third tier comprising of five co-managers is believed to have been nominated.

Because of restrictions established by the Securities and Exchange Commission, none of the banks involved in the IPO could comment on its importance. But with the majority of the underwriters extending their lending facilities, it does seem to suggest openly for the first time that control of a strong balance sheet is more important for businesses than successful underwriting mandates.

Because of the scale of this move, the league table of IPO underwriters throughout the beginning of 2001 is likely to be substantially affected by the size of the mandate.

The US tobacco and food group revealed its takeover of Nabisco snacks group in June, prompting plans for an IPO of 10-15% of the Kraft unit, which could reach between US$5-10bn.