How To Play The Reuters Global M&A Summit (LAZ, JEF, GS)

The Reuters Global Mergers and Acquisitions Summit is taking place April 4-6, 2011 and considering all the action we've seen recently in the M&A space, investors and traders need to know how to play it. Senior bankers told the summit that they expect an M&A cycle lasting several years, as deals are focused on strategic fits and make sense. Despite strong earnings, healthy corporate balance sheets, there are still caveats to M&A deals, as economic fragility, natural disasters, and the Middle East turmoil are hurting corporate confidence. Adrian Mee, head of international M&A at Bank of America Merrill Lynch, said, "I think we've got three or four years of good M&A business in front of us -- but it will depend on continuing GDP growth, strong equity markets and international events not getting in the way." Wilhelm Schulz, head of European M&A at Citigroup, said, "Earnings are good, leverage is down, people know what they want to do. We are simply confronted with macroeconomic events which are unforeseen and uncertain with respect to the consequences." "If you take that away, you should have an explosion of M&A. If you overlay it, you get what we currently have -- which is, week-by-week the amount of M&A being announced is a function of the macroeconomic sentiment and boards' assessment of that risk," Schulz said at the conference in statements obtained by Reuters. Names like Lazard LAZ, Jefferies JEF, Goldman Sachs GS and other investment banks should see a sharp uptick in M&A earnings, as the deal flows continue abound. Lazard is a pure play on increases in mergers and acquisitions, as Lazard is one of the titans in the industry, and investors and traders will likely bid this name up moreso than the other banks, as they have other divisions that bring in a majority of their earnings. Lazard has been expanding its wealth-management business, but is still thought of as the big dog in the M&A field, so any increase in deal-making, should lead to an uptick in Lazard shares.