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Mergers and Acquisitions Explained by Sebastian Amieva
- 2. What is M&A BASICALLY? In corporate finance, mergers and acquisitions are transactions in which the ownership of companies, other business organizations, or their operating units are transferred or consolidated with other entities.
- 3. Asset Sales VS Stock Sales An asset sale is the purchase of individual assets and liabilities, whereas a stock sale is the purchase of the owner's shares of a corporation. While there are many considerations when negotiating the type of transaction, tax implications and potential liabilities are the primary concerns.
- 4. Who's Involved in the M&A Process? 1. PURCHASER 2. SELLER 3. TARGET 4. TARGET BOARD OF DIRECTORS 5. M&A LAWYERS 6. INVESTMENT BANKERS 7. Others. A number of other parties may play a role in an M&A transaction.
- 5. Business Appraisers, Accountants & Consultants BUSINESS VALUATION: IN SOME COUNTRIES YOU WILL NEED TO HIRE A CERTIFIED BUSINESS BROKER FOR APPRAISALS OR JUST GET A ¨BROKER OPINION OF VALUE¨. ACCOUNTANTS: THEY HAVE A VERY IMPORTANT ROLE FOR DUE DILIGENCE PROCESS. CONSULTANTS: SOMETIME IS GREAT TO HAVE A TECHNICAL PERSON TO GET DONE A MARKET REPORT.
- 6. THE STRUCTURE OF MERGERS ● Horizontal merger: Two companies that are in direct competition and share the same product lines and markets. ● Vertical merger: A customer and company or a supplier and company. Think of a cone supplier merging with an ice cream maker. ● Congeneric mergers: Two businesses that serve the same consumer base in different ways, such as a TV manufacturer and a cable company. ● Market-extension merger: Two companies that sell the same products in different markets. ● Product-extension merger: Two companies selling different but related products in the same market. ● Conglomeration: Two companies that have no common business areas.
- 7. How Long Does the M&A Process Take? The length of the M&A process can take anywhere from six months to several years, depending on the complexity of the deal. While it can be helpful to draft a timeline and target a closing date for tracking purposes, understand that delays are inevitable, so build in time for change.
- 8. WE HOPE YOU ENJOYED THIS INTRODUCTION TO M&A IF YOU WANT TO LEARN HOW TO BUY BUSINESSES VISIT WWW.SEBASTIANAMIEVA.COM