To Top JPMorgan Deal Maker, Mergers Still Look Strong

Many in the deal sector have been pessimistic about a recovery in the business of mergers and acquisitions.

That group doesn’t include James B. Lee Jr., JPMorgan Chase’s vice chairman and chief deal maker.

“I don’t see how that squares with the facts,” he said on the sidelines of DealBook’s Opportunities for Tomorrow conference on Tuesday.

Though skeptics note that the overall number of announced transactions this year was down 1 percent as of last week, at 30,126 deals, Mr. Lee argued that the number of big deals disclosed in 2013 is the largest it’s been in years.

He noted that the third-biggest deal of all time, Verizon Communications’ repurchase of the 45 percent of its wireless unit that it didn’t own, and the biggest technology leveraged buyout ever, that of Dell Inc., were both announced this year. (JPMorgan played advisory roles in the two transactions, with Mr. Lee advising Dell’s special committee.)

One issue that the deal-making industry has had to contend with is rebuilding corporate boards’ appetite for risky moves like mergers. The current feel of today’s environment isn’t quite like it was in 2007, the year of record-setting leveraged buyouts and the peak of the last credit boom. But companies still can borrow at incredibly low rates and face enormous pressure from investors to keep growing.

As one point of growing resolve on Wall Street, Mr. Lee noted that 2013 is the first year since the crisis when inflows into stock funds exceeded those into bond funds.

“Confidence takes time to be restored,” he said.

At the same time, he conceded that doing bigger deals is a tougher gambit these days.

Mr. Lee said that he has had experience in tough situations before, having worked on the sales of the federal government’s stakes in the American International Group and General Motors. “You always want to be right, but in those cases you had better be right,” he said.

But nowadays, social media gives more stakeholders â€" including activist investors â€" a bigger voice in any transaction, adding to negotiations’ complexity. Dell’s takeover, for instance, featured a bruising monthslong battle between the company and its suitors on one side and the veteran activist Carl C. Icahn on another.

“Doing big deals is like multidimensional chess,” he said. “That’s why I love them.”