A nascent recovery in global dealmaking, focused on safer deals with clear strategic logic, probably marks the start of several years of rising mergers and acquisitions, senior bankers told the Reuters Global M&A Summit.

Still, while company earnings and balance sheets are strong, bankers said economic fragility, natural disaster, and political tumult in the Middle East were hurting corporate confidence and holding back a more robust M&A recovery.

Adrian Mee, head of international M&A at Bank of America Merrill Lynch, said last year's rise in deal values -- the first annual increase since 2007 -- suggested a new, multi-year M&A cycle was underway.

I think we've got three or four years of good M&A business in front of us -- but it will depend on continuing GDP growth, strong equity markets and international events not getting in the way, Mee told the summit in London.

This year, global M&A has leapt 55 percent in the first quarter to almost $800 billion, Thomson Reuters data show. High cash levels, an improving economic outlook and low financing costs have emboldened companies to pursue large, strategic deals such as AT&T Inc's $39 billion bid for T-Mobile USA.

Wilhelm Schulz, head of European M&A at Citigroup, said the corporate backdrop was strong, despite flagging domestic demand.

Earnings are good, leverage is down, people know what they want to do. We are simply confronted with macroeconomic events which are unforeseen and uncertain with respect to the consequences, Schulz said.

If you take that away, you should have an explosion of M&A. If you overlay it, you get what we currently have -- which is, week-by-week the amount of M&A being announced is a function of the macroeconomic sentiment and boards' assessment of that risk.

Matthew Ponsonby, co-head of M&A for Europe at Barclays Capital, said boards were consequently taking longer to weigh up deals.

The issue has been that each time you think all the shoes have dropped, there's another one that falls, he said, adding: It's very hard to pull the trigger when you have a Japan, a Greece, a Portugal, or whatever it is.

Scott Matlock, chairman of international M&A at Morgan Stanley, said while Asian buyers were trying to expand their empires, Western acquirers were typically opting for less bold deals, often funded with available cash.

U.S. and European acquirers are tending to do ... logical, 'safe' transactions that don't stretch either their balance sheets or take them to new places in terms of corporate opportunity.

(Reporting by Quentin Webb and Victoria Howley; additional reporting by Simon Meads; Editing by Hans Peters)

Portugal Japan Citigroup