![]() In the beginning of the due diligence process, there is a lot of preliminary work to be done in assessing the market, the business, and financial reports. M&A generally starts with a preliminary evaluation of the target company, including high level discussions between buyers and sellers to explore how the two companies could strategically fit together, how their values align, and what potential synergies could be realized. If you are on the sell-side of the equation, you can learn more about what is involved in a successful exit in our business exits hub. This deep dive into their data - financial, commercial, operational and more - is essential for understanding the company’s current health and whether a deal will be financially viable. Months can be spent assessing potential target companies with a thorough review of their material information in due diligence. The process for preparing for and executing an M&A can be intensive. These corp dev teams look for opportunities to acquire smaller companies in order to support their own growth strategies - which may or may not be considered unfriendly deals. ‘Targeted acquisition’ is a common term used by larger companies who have dedicated corporate development teams. How the transaction is communicated to shareholders, employees and the Board can therefore also play a role in whether a deal is considered an acquisition or merger. In these instances, it is always considered an acquisition. In an ‘unfriendly’ deal (or hostile takeover), a target company does not wish to be purchased, but may do so out of necessity. When the companies are of a similar size, they may come together to form a new entity which is when a merger occurs. In other instances, the smaller company ceases to exist completely. The smaller company may still retain its legal name and structure, but is now owned by the parent company. When one company is much larger than the other, it is likely that it will integrate the smaller one into the larger one in an acquisition. The most common difference between a merger and an acquisition relates to the size of the companies involved. Transform your M&A experience with Ansarada Deals ™ - start for free today! What is the difference between a merger and an acquisition? M&A transactions can indicate any deal of this type. The term ‘mergers and acquisitions’ (M&A) refers to the process by which one company joins another, either by combining together (company merger process) or by one purchasing the other to incorporate into the larger business (acquisition process).
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