"Even last year, before the dollar started really dropping, we saw it," said Ravi Chanmugam, head of the North American merger practice at consulting firm Accenture. "And now you're seeing it accelerate."
Among the recent acquisitions by foreign firms, Anheuser-Busch Cos., the maker of Budweiser beer, agreed last month to be bought by Belgian brewer InBev for $52 billion. Also in July, Swiss pharmaceuticals maker Roche Holding offered $43.7 billion for the shares of U.S. biotech giant Genentech Inc. that it didn't already own.
The rise of strategic acquisitions is alleviating some of Wall Street's pain caused by the mortgage crisis and the merger slowdown. But strategic deals, in which investment banks may act only as advisors, aren't nearly as lucrative as private-equity buyouts, which they often help finance.
"It's nowhere near as profitable," Alpert said. "You're basically giving advice, and there's a limit as to what you can get paid for advice."
Indeed, activity in the merger business is a far cry from those heady days a short time ago.
Private-equity buyouts have slumped 85% to a measly $51.5 billion this year from $348 billion at the same point in 2007, according to Dealogic.
"For us to get back to a robust M&A market," said Robert Filek, a partner at PricewaterhouseCoopers, "we'll really need to see some strengthening in the credit markets."
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walter.hamilton@latimes.com
