Thanks to AT&T, JPMorgan Is Now M&A King on Wall Street

by Derek Loosvelt | March 25, 2011

AT&T's $39 billion proposed acquisition of T-Mobile has given JPMorgan Chase a distant lead in the 2011 M&A advisory race.

And how the bank was able to land the deal is the subject of an interview conducted by Fortune with Jes Staley, JPMorgan's investment banking chief.

In the interview, Staley notes that getting the nod from AT&T certainly had a decent amount, if not a whole lot to do with the fact that the bank can offer (and did offer) a monstrous credit facility (in the form of a $20 billion bridge loan) to go along with its advisory services -- an offering that competitors like Goldman Sachs and Morgan Stanley can't provide. But, according to Jes, it also helped (if not as much as the ability to hand over $20 billion) that his firm has strong positions in the equity markets, credit markets, and risk management markets, to supplement its adept M&A advisory team.

Staley also talks about other matters, including Japan and Facebook. As for Japan, he notes that "the guy who runs our Tokyo office got an email the first night after the quake from the guy who heads our commercial bank business in Louisiana. They communicated daily, with a lot about Katrina and about how to deal with this kind of crisis. It was inspiring to see that."

And regarding Facebook, Staley has his doubts about Zuckerberg & Co.'s recent uber cool valuation, but he also believes the social media empire could indeed be worth the GDP of a mid-sized Eastern European Republic.

"Any time that valuations are being driven by a revenue model that has yet to be proven," says Staley, "you need to keep both eyes open. But keep things in context. When Netscape launched, we were talking about a total of 10 million Internet users in the United States. When Facebook did its recent deal, it was being used by eight million people in Egypt alone. We might see justification of that valuation yet."

(Fortune: How JPMorgan Landed the AT&T Deal)

Filed Under: Finance


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