Business World

Dealmakers are not known for their patience. Yet that’s what’s needed more than anything else a year after Lehman’s collapse.

It takes months longer to close a deal, the number and size of transactions has shrunk, and mergers and acquisitions fees have plummeted. Much of the M&A work now is either advising failed companies on restructurings or organizing fire sales.

“The nature of M&A has changed fundamentally,” said Antonio Weiss, Lazard global head of M&A. “On one end of the spectrum, there’s an increase in volume of distressed activity and on the other, well-capitalized corporations have a chance to revisit acquisition ideas at lower values.”

Transformational deals have been few and leveraged buyouts are just not there — yet. But there are bright spots, such as this week’s unsolicited bid by U.S. firm Kraft Foods Inc for the UK’s Cadbury Plc, and confidence has started to return.

“Many CEOs feel we’ve bottomed,” said James Stynes, global chairman of M&A at Deutsche Bank. “We are starting to see a pickup that could make 2010 more positive than people originally thought.”

That’s a sea change from last year.

“There were certain points over the last year when it was equifax free credit report… so incomprehensible to go talk to a board about a deal,” said one senior dealmaker who declined to be named. “It was just not a topic that belonged in the board room.”

CEOs had bigger fish to fry — plummeting share prices, hard-to-get credit and ballooning inventories.

“Last year was a very significant event that caused everyone to be very cautious, said Robert Kindler, global head of M&A at Morgan Stanley. “The real focus that companies have had this year hasn’t been M&A, but looking at their balance sheets.”

The transformed deals landscape caused a musical chair dance in the all-important “league tables” or deal rankings. The four top banks so far this year are Morgan Stanley, Goldman Sachs, Citigroup and JPMorgan: the same four as in 2008 but in a different order.

For graphics on the top 20 M&A advisors and fees:

here

here

BACK TO BASICS

Before the crisis hit, Wall Street was in “product mode,” said John Studzinski, global head of the advisory group at private equity firm Blackstone. 

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