Will There Be Anyone Left To Bank Israeli M&A?

With prices of Israeli stocks that trade in the US getting nailed along with the broader market, the potential exists for a pick up in M&A among these companies. But a problem exists. It’s not about what price a company may or may not want to pay to buy a company, rather, there is a technical problem. Will there be any investment banks left that can bank the deal? With the demise of Lehman Brothers (LEHMQ.PK), by far and away the busiest investment bank in Israel, and the constant rumors of other large US investment banks on the verge of collapse, who is going to be able to fill the void, penetrate the local market and do the deals?

The last time the market experienced a bursting bubble, back in 2000-02, when the hi-tech bubble burst, Israel had an exodus of investment bankers, and as a result, little in the way of M&A took place. Two large firms stayed during that crisis, Lehman and Citigroup (C). The impact was devastating and it took a few years before we had an upswing in M&A. Let’s hope that the current crisis isn’t deja vu all over again.

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