Five stage model of mergers and acquisitions


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mergers and acquisitions follow a set model.

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Five stage model of mergers and acquisitions

  1. 1. The Five Stage Model of M&A
  2. 2. The five Stages <ul><li>Corporate strategy development </li></ul><ul><li>Organising for acquisitions </li></ul><ul><li>Deal structuring and negotiations </li></ul><ul><li>Post acquisition integration </li></ul><ul><li>Post acquisition audit and organisational learning </li></ul>
  3. 3. Corporate strategy development <ul><li>M& A is an instrument for achieving corporate strategy </li></ul><ul><li>Corporate strategy is concerned with ways of optimizing the portfolios of businesses that a firm currently owns with how this portfolio can be changed to serve the interests of corporate stakeholders. </li></ul>
  4. 4. Organising for acquisitions <ul><li>A pre condition for successful acquisition is that the firm organises itself for effective acquisition making </li></ul><ul><li>Understand beforehand the value creation logic </li></ul><ul><li>Leads to successful post integration </li></ul><ul><li>Develop a framework for effective organisation of M&A activity </li></ul><ul><li>Get requisite skills , knowledge and capabilities </li></ul>
  5. 5. Deal structuring and negotiations <ul><li>Valuation of target companies </li></ul><ul><li>Choosing advisors </li></ul><ul><li>Obtaining and evaluating as much intelligence as possible of target </li></ul><ul><li>Due diligence </li></ul><ul><li>Determining negotiation parameter </li></ul><ul><li>Negotiation of senior management positions in the firm </li></ul><ul><li>Developing bid and defenses strategies </li></ul>
  6. 6. Post acquisition integration <ul><li>Change management programme of </li></ul><ul><li>target firm </li></ul><ul><li>acquiring firm </li></ul><ul><li>attitude and behaviour of both to accommodate co-existence of the two organisations </li></ul>
  7. 7. Post acquisition audit and organisational learning <ul><li>Emphasis on learning </li></ul><ul><li>Archiving for future </li></ul>