The Australian art world is reeling today after shock news that leading auction house businessman Tim Goodman has purchased the Australian arm of the prestigious international auction house Sotheby's.

Tim Goodman, currently Chairman and CEO of Bonhams and Goodman auction house announced that he will be terminating his license with British firm Bonhams on December 22 of this year to replace it with the far more prestigious and distinguished brand name of Sotheby's.

According to Gabriella Coslovich writing in today's Age Newspaper "the most shocked of all were Sotheby's Australian staff, who were told of the takeover only yesterday".  Many of these staff members have only recently moved to Sothebys after losing their jobs at Christies auction house which closed its Australian operations in June 2006. These people have certainly had their fair share of exposure to the merry-go-round which has been the fiercely competitive Fine Art Auction house business in Australia in the past decade.

The last ten years have seen the arrival of Deutscher-Menzies, Deutscher and Hackett, Bonhams (in its link up with Goodmans), the departure of Christies, the decline of Lawsons, the arrival and departure of Joel Fine Art, the short life span of Artemis, not to mention numerous other alliances and allegiances, takeovers and retirements.

Goodman is also Chairman, CEO and shareholder of Fine East Auction Holdings Ltd (FEAHL), the company which has bought the Sotheby's licence.  Other shareholders of FEAHL include Robert Brooks, chairman of British based auction house Bonhams, and John Mowbray of Mowbray Collectibles in Otaki, New Zealand - also the 49% shareholder of Auckland based auction house Webbs.

According to FEAHL, Sotheby's will operate independently as a wholly owned subsidiary of FEAHL, along with Theodore Bruce in Adelaide, Bay East Auctions in Sydney and Leonard Joel in Melbourne.  Apparently the license permits operation under the Sotheby's name in both Australia and New Zealand.

A number of observers have expressed surprise at this move by Sotheby's to "sell off" their fiercely protected brand name.  Like many other international businesses Sothebys has been hit hard by the Global Financial Crisis, however its response has been to reduce staff and close offices rather than sell off the family assets, particularly for a sale price in the reported "low millions".  Perhaps the potential lack of presence of the Sotheby's brand in the relatively economically strong Australasian region has been a point of strength for the FEAHL negotiations?

Interestingly, Bonhams UK has announced that it plans to continue its Australian operations independent of Goodman once the license agreement has concluded.

The Sothebys/FEAHL transaction is to be completed later this year leaving the Australian art market plenty of time to pontificate the ramifications of this audacious move.