Here is a list of Most Frequently Asked questions on Mergers & Acquisitions
What is the difference between a Merger & an Acquisition? A merger is usually of two equal companies, where they come together on equal terms whereas an acquisition is one firm taking over another firm, which means one is more dominating than the other when it comes to leadership and making business decisions. However, for those who deal with M&A regularly, we'd argue that it is always an acquisition even when it is a merger. A prime example was the merger of Mercedez-Benz and DaimlerChrysler, it was on equal terms and Post-deal we all know what happened, one side ended up dominating the other.
What is the difference between Pre-Deal and Post-Deal? Pre-Deal is where the Merger/Acquisition is still in assessment and Post-deal is where you have acquired the target firm.
What happens in Pre-Deal? The Corporate Development team is assessing on who to acquire from the market, what price to pay, how to fund the deal, and whether the target firm will be worth the investment.
What does Corporate Development team do? Corporate Development team, also known as Strategy or Deal team as the name implies is in charge of developing the corporation, one of the route to growth is acquiring other firms. They are also often in charge of making investment in other firms, which includes strategic partnerships and joint ventures.
Why do M&A fail? There are numerous reasons for M&A failure, one of the most significant is People; our emotions and egos come in the way of doing the right thing. We put our personal inte
rest ahead of the organisation's interest, which inadvertently ends up impacting us in the long-run anyway, after all we are part of the organisation. Also, often people undermine the efforts involved in Post-deal (also known as Post-merger Integration), which means a Bish Bash Bosh approach is adopted to integrate the target firm rather than taking a step back to think through for example the Architecture. Imagine getting a professional builder to build a brick wall vs a Rookie, both will give you a wall but one would be perfectly aligned, stable and future proof allowing you to build upon it whereas the other would be wonky but hey a wall has been delivered as per plan. (see image on the right).
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