Business in mergers and acquisitions (M&A) is booming and the City is enjoying a time of high investment. The good news is that all the key players in the industry are crying out for good graduates – now is the time to apply.

Apart from the issuing of shares and bonds, M&A work is one of the most important functions in an investment bank. Essentially, M&A work involves finding the right companies for a corporate client to buy, merge with or sell, and then arranging the deal (although sometimes it might involve advising a client on how to avoid a takeover approach). As such, M&A work is an area where staff can make a big impression on clients and gain large rewards.

A merger is a combination of two companies into one larger company. Such actions are commonly voluntary and involve stock swap or cash payment to the target. An acquisitions (or takeover) is the buying of one company by another. A merger can resemble a takeover but result in a new company name, often combining the names of the original companies, eg AOL Time Warner or GlaxoSmithKline. Sometimes an acquisition is called a merger for political or marketing reasons.

What’s involved in M&A projects?

M&A projects fall into two main stages. The first is pitching, marketing and origination. Here bankers meet clients, suggest strategies, and perform industry overviews and competitor analysis in order to get to the heart of the issues affecting the company.

Junior analysts (the investment-banking industry’s term for graduate trainees) are likely to be heavily involved in producing what are known as pitch books: compilations of information and strategies that more senior colleagues use to present the bank’s case to the client.

Much of this work may come to nothing, with clients deciding not to pursue the deal – or worse, deciding to go with a different bank. However, if a strategy is agreed upon, a company analysis is performed in which financial data are closely examined and models of possible outcomes constructed.

The second stage is the execution of the transaction itself. Essentially this is one large project in which investment bankers work closely with lawyers and accountants in order to negotiate the specifics of the deal. How the company finances the deal is something that crosses over into corporate finance.

Often, the M&A team does both the buy side and the sell side of deals and works with a wide range of colleagues in different areas to pull together the best deal for the client.

As the deal moves towards completion, it is normal for investment bankers working in M&A to put in extremely long hours. ’We are very honest that some roles in investment banking do require long hours,’ says Esther Oxenbury, Head of IB Graduate Recruiting at JPMorgan.

’But the same is true if you join a law firm or a consultancy. Ambitious people expect to work hard at this stage in their careers.’

Job descriptions

• Fund manager
• Investment analyst
• Investment banker (corporate finance)
• Investment banker (operations)
• Stockbroker
• Trader

The M&A markets

M&A work has been on a rapid upturn recently. M&A deals require not only generic skills, but also specific areas of expertise, and the area you know about can fluctuate in demand like any other commodity in the financial markets. For example, there has been a recent demand for M&A analysts with knowledge of the oil and gas sector, and, if you throw in a knowledge of Russian, your CV could start looking very attractive and command a high salary when that sector is going through a period of consolidation.

Find out more

• Capital markets
• Corporate finance
• Fund management
• Operations
• Sales, trading and research