Corporate Finance For Dummies

Chapter 20

The 411 on M&A

In This Chapter

Understanding the different types of M&A

Looking at the reasons for M&A

Coming up with the value of a business

Paying for an M&A

Many people tend to associate the term M&A with the perception of the sleazy business practices of the 1980s, when such methods as hostile takeovers and the liquidation of otherwise successful companies came into prominence. This perception isn’t entirely fair, though, as the 1980s have been unduly targeted since business practices of large corporations have nearly always been sleazy. Still, the stereotype that the M&A industry is filled with corruption and sociopaths is an idea perpetuated more by such films as Oliver Stone’s Wall Street (whose characters became involved in the hostile takeover of an airline with the intention of liquidating all its assets), or Bret Easton Ellis’ book American Psycho (whose main character is an executive at an M&A firm who just also happens to be a serial killer). Ask people, though, whether they can define exactly what M&A consists of, what an M&A firm does, or why M&A is pursued ...