Mergers and Acquisitions 101 and Assessing Integration Complexity and Risk
In this chapter, you will learn how to do the following:
MERGERS AND ACQUISITIONS 101
Mergers and acquisitions (M&A) is a big part of the corporate finance world. Every day, investment bankers arrange M&A transactions to bring separate companies together to form larger ones. Deal valuations can be in the millions or even billions of dollars. However, they all require some degree of post-deal support to make them work, and that is what this book is about.*
A merger is a combination of two companies to form a new company, while an acquisition is the purchase of one company by another in which no new company is formed.
The common scenarios for companies undertaking a merger or an acquisition include the following:
- A company cannot achieve double-digit sales growth organically.
- A company wants to take capacity out of the market (i.e., create industry consolidation).
- A company wants to expand its portfolio of products and services (i.e., create business diversification).
- The merger or acquisition is an opportunistic purchase.
- The merger or acquisition offers an opportunity to scale operations or consolidate them to achieve cost efficiencies.
- The merger or acquisition offers ...