Cramer: This Is the 'Year of the Deal'
By: With the recent surge in major mergers and acquisitions—from Heinz and US Airways to Dell going private—CNBC's Jim Cramer said Thursday that "this is the year of the deal."
"What's happened is that stocks are very cheap historically, and the size of the deals are very big," Cramer said. "The best way to play these are the arms dealers," he added, referring to investment banks like Goldman Sachs and Morgan Stanley who structure and advise deals as good investments in this environment.
On the Heinz announcement, Cramer said: "This is a terrific deal for Buffett. I don't think he is overpaying in the long term. This is one of the most iconic brands but it's one of those cases where the company may have been out of steam for now but the brands never lost their luster."
Although Buffett has his own deal-makers internally, Cramer said, the major M&A departments of investment banks "offer a lot of deals to make. Goldman can make phone calls to companies today saying that 'everyone is doing it, get involved, stocks are cheap.' Cross-border transactions can't be ruled out either," he said.
However, he cautioned against making investments into other food stocks in expectation that the Heinz acquisition will lead to other buys in the space.
"Those that buy the food stocks expecting another bid should sell. This is a slow growth group, if you want an iconic brand it makes sense, but it doesn't make sense to buy General Mills at this level thinking there will be another bid. Ring your register, nice trade, prime the next one," he said.
— By CNBC's Paul Toscano. Follow him on Twitter and get the latest stories from Squawk on the Street @ToscanoPaul
