S.G. Warburg & Co. had established a reputation as a daring merchant bank that grew to be one of the most respected investment banks in London.[79] However, a Warburg expansion into the U.S. had turned out flawed and costly, and talks in 1994 with Morgan Stanley about a merger had collapsed.[80] SBC merged the firm with its own existing investment banking unit to create SBC Warburg.[77][81]