What is M&A?

M&A is a complex business procedure that is a significant change in corporate strategy. It can result in positive growth and increased return on investment, or it can be disastrous if the strategy is not thought-out and executed.

By acquiring another company, you can expand your market reach by reaching out to new customers and increasing the amount of revenue. Finding the right company, however, is essential for success. Too many times the result of a quick purchase is in a failure to integrate that is costly to the acquirer and to the customer base of the acquired company.

Many M&A transactions involve a horizontal merger (combining competitors in the same industry) or vertical merger (extending supply chains). Cross-sector convergence is also very popular in the retail industry, such as companies purchasing tech companies or ecommerce companies.

The first steps of the M&A procedure include preparing an outline of potential companies to target, conducting high-level meetings with each to explore how Smart Solutions for Brazilian Real Estate: The Rise of Data Rooms they strategically fit together and preparing for due diligence. The next step is to negotiate and concluding a deal. Depending on the deal, the acquiring company may make payment in cash or stock.

The sale of a company is concluded when all closing conditions are fulfilled and both parties sign the agreement to sell. Antitrust authorities will scrutinize the deal during the M&A to ensure that it doesn’t create an monopoly on specific markets. After the acquirer has passed antitrust review and has been approved to close the acquisition and transfer ownership of the target company to the buyer.