Historically, Investment Banks (intermediaries which assist companies in selling ownership of themselves as stock or borrowing money directly from investors in the form of bonds) have been closely associated with merger and acquisition activity since a merger or acquisition is a sales opportunity for the Investment Bank. If the company wants to merge with another, it must attain a fair market value for its shares to be swapped which would involve an investment bank. If it wants to buy the other company with borrowed money, it would most likely borrow directly from investors in the form of bonds through a private placement, engineered by the investment bank. Thus, Investment Banks position themselves to act as advisors on mergers and acquisitions and usually charge large fees for doing so.

This system however, gives an incentive to Investment Banks to try to stimulate as much M&A activity as possible, even though the result might not be good for the shareholders of the acquiring company, possibly a conflict of interest. The amount of influence this has is unclear since this activity is usually secret and since the majority of merger proposals do not go through.

Source: Wikipedia.com