Chapter 4

How Investment Banking Is Used in Mergers and Acquisitions

IN THIS CHAPTER

check Understanding the thinking behind the decision for firms to buy rivals

check Seeing what kinds of firms make good acquisitions targets

check Finding out how hostile acquisitions differ from friendly ones

check Analyzing M&A deals and understanding the nuances of what makes them work

check Understanding why some M&A deals fail

Buyers and sellers of companies engage the services of investment banking experts to try to make sure that in any mergers and acquisitions (M&A) transaction, a fair deal is struck. In this chapter, we tell you how investment banking is used to source potential business combinations and how price tags are put on a company that is being acquired. We examine why some firms want to be acquired and try to make themselves more attractive to potential suitors and why other firms don’t want to be acquired and actually try to make themselves less attractive to suitors. Finally, we show you why some business ...

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