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Mergers & Acquisitions

The goal of Mergers and Acquisitions (M&A) is to achieve rapid growth in a given industry, without having to create another business entity.

QbD supports companies on this pathway.

Mergers & Acquisitions

Challenges and benefits of M&As

Mergers and acquisitions (M&As) are aspects of corporate strategy, finance and management involving the buying, selling and/or combining of two or more companies. The idea is to achieve rapid growth in a given industry without having to create another business entity1. Here, a distinction must be made between mergers on the one hand and acquisitions on the other.
A merger between two organizations involves a decision by both parties to integrate their operations on an equal basis. An acquisition involves one organization buying a controlling interest in another and clearly establishing itself as the new owner2. The latter scenario can include hostile takeovers.
Both M&As involve considerable financial, market and operational risk.
  • Asset valuation
  • Historical earnings valuation
  • Future maintainable earnings valuation
  • Relative valuation (comparable company and comparable transactions)
  • Discounted cash flow (DCF) valuation3
  1. http://en.wikipedia.org/wiki/Mergers_and_acquisitions (accessed 7 July 2008)
  2. Viney H, Gleadle P. B820 Strategy, “Unit 5, Competitive and Corporate Strategy, session
    5 (Corporate Strategy in Multi-Business Organisations),”Milton Keynes, UK: The Open University; 2003:p 87.
  3. S. Michor (2008), Mergers, Acquisitions and Operational Risk, Regulatory Affairs Focus, RAPS.
  4. Hitt et.al (2003a), Milton Keynes, UK: The Open University.

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