Merger and Acquisitions
Mergers and acquisitions change the ownership or control of businesses and assets through a coordinated process of strategy, valuation, diligence, financing, negotiation and execution.
Definition
Mergers and acquisitions (M&A) comprise transactions in which companies, business units or assets are combined, purchased, sold or transferred. The term covers acquisitions, mergers, takeovers, divestitures and related changes of corporate control.
Overview
Companies pursue M&A to enter markets, acquire capabilities, consolidate industries, reshape portfolios or transfer ownership. Sellers may seek liquidity, strategic focus, succession or relief from financial pressure. The transaction itself does not create value automatically: price, financing, risk allocation and post-closing execution determine whether the strategic thesis is realized.
Transaction forms
Buy-side
- Target screening
- Valuation and diligence
- Financing and negotiation
- Integration planning
Sell-side
- Sale preparation
- Buyer outreach
- Competitive process
- Separation planning
Other structures
- Mergers and schemes
- Joint ventures
- Minority investments
- Asset and carve-out deals
Deal lifecycle
- Strategy: establish the transaction rationale and alternatives.
- Preparation: identify counterparties, valuation range, process and readiness.
- Diligence: test financial, commercial, legal, operational and technology assumptions.
- Structuring and negotiation: agree price, financing, conditions, protections and risk allocation.
- Approval and closing: secure corporate, financing and regulatory approvals and complete transfer.
- Integration or separation: deliver synergies, continuity and the planned operating model.
Advisers and participants
| Participant | Principal contribution | Central question |
|---|---|---|
| Corporate leadership and board | Strategy, governance and approval | Should the transaction proceed? |
| Financial adviser | Valuation, process and negotiation | How should it be priced and executed? |
| Legal counsel | Structure, documentation and regulatory work | How are rights and risks allocated? |
| Diligence specialists | Independent testing of assumptions | What could change value or feasibility? |
| Integration team | Post-closing delivery | How will the thesis become operating results? |
Related concepts
Sources and further reading
View sources and editorial notes
- OECD, corporate governance and competition publications.
- International Valuation Standards Council, International Valuation Standards.
- Relevant national securities, competition and company-law authorities.
Editorial note: Transaction structures and approval requirements vary by jurisdiction. This entry describes the general M&A system and is not legal or investment advice.