Mergers & Acquisitions For Dummies

Chapter 3

Previewing the Generally Accepted M&A Process

IN THIS CHAPTER

Walking through a typical M&A deal

Discovering the difference between an auction and a negotiated transaction

Looking at both Buyer’s and Seller’s position

Keeping tabs on who has power

Although the truism “always be prepared” applies to just about everything in life, it’s especially true in mergers and acquisitions. To the uninitiated, the world of M&A may seem to be a Wild West of sorts: chaotic, bizarre, and full of strange nomenclature and acronyms. But believe it or not, the buying and selling of companies has a clearly defined process. To be a successful Buyer or Seller, you need to understand how that process works so that you can think many steps ahead and plan accordingly — just like a chess game, but without the checkered board.

In this chapter, I break down the phases involved in a typical M&A deal as well as define the two methods of selling a business: auction and negotiation. I also look at the constantly changing power balance between Buyer and Seller in a deal and provide suggestions on preserving ...