A merger and acquisition (M&A) study course is designed to provide students with an understanding of the process and concepts involved in M&A activity. The scope of an M&A study course may vary depending on the school or institution offering the course, but typically covers topics such as valuation methods, due diligence, and financing options. Students in an M&A study course may also learn about various M&A deals’ types, such as hostile takeovers and acquiring.
Mergers & Acquisitions can take place:
1. Horizontally- when two companies that are in the same line of business join forces in order to increase market share, economies of scale, or geographical reach.
2. Vertically- when a company acquires a supplier or customer in order to gain more control over its value chain or increase market share.
3. Conglomerate- when two companies that are in unrelated businesses join forces in order to spread risk, achieve interactions, or enter unrevealed markets.
Reasons for Mergers and Acquisitions Association
You may experience numerous reasons why companies engage in IMAA mergers and acquisitions. Some common reasons are stated below:
1. To increase market share- by consolidating with or acquiring a competitor, a company can gain a larger share of the overall market.
2. To achieve economies of scale- by consolidating operations, a company can achieve cost savings through economies of scale.
3. To enter new markets- by acquiring a company in a new market, a company can quickly gain a foothold in that market.
4. To achieve synergies- by consolidating operations, a company can achieve cost savings and other efficiencies through synergies.
5. To improve financial performance- by consolidating operations and achieving economies of scale, a company can improve its financial performance.
6. To increase shareholder value- by consolidating operations and improving financial performance, a company can increase shareholder value.
How study program can help one with corporate mergers and acquisition?
The scope of an M&A institute’s study course may vary depending on the school or institution offering the course, but typically covers topics such as valuation methods, due diligence, and financing options.
Stages involved in any M&A study program
1. Identification of potential goals: The first step in any M&A processes come with the identification of potential goals and targets. It can be done through a variety of means, such as market research, industry reports, and word of mouth.
2. Initial contact: Once potential targets have been identified, the next step is to make initial contact. This can be done through a variety of means, such as phone calls, emails, and face-to-face meetings.
3. Letter of intent: After initial contact has been made, then draft and send a letter of intent. This document outlines the basic terms and proposed conditions of transaction.
4. Due diligence: Once a letter of intent is accepted, then conduct due diligence. This process is intended to confirm the correctness of the material provided by the target business and to classify any potential issues.
5. Negotiation / signing of documents: After due diligence is finalized, then negotiate and sign the transaction (contract) documents. These documents include the purchase agreement, the shareholders’ agreement, and the loan agreement.
6. Closing: This is the last step of M&A process. This is the point at which the transaction is finished and the parties conversation the appropriate documents and funds.
Learning the tools to analyze and manage merger and acquisition decisions from a corporate-level perspective.
The tools to analyze and manage merger and acquisition decisions from a corporate-level perspective include understanding the key drivers of value creation in mergers and acquisitions, assessing synergy potential, and assessing financial and operational risks.
Key drivers of value creation in mergers and acquisitions
The key drivers of value creation in mergers and acquisitions, according to IMAA 2022 – the merger consulting, are growth, cost savings, and revenue synergies.
1. Growth: Growth is the upsurge in sales that a company experiences after acquiring another company. This growth can come from a number of sources, such as expanding into new markets, entering new product categories, and increasing market share.
2. Cost savings: Cost savings are the reductions in costs that a company experiences after acquiring another company. These cost savings can come from a number of sources, such as economies of scale, reductions in duplicate overhead costs, and supply chain efficiencies.
3. Revenue synergies: Revenue synergies are the increases in sales that a company experiences after acquiring another company. These revenue synergies can come from a number of sources, such as cross-selling products and services, bundling products and services, and expanding into new markets.
Assessing synergy potential
The first step in assessing synergy potential is to identify the key drivers of value creation in the merger or acquisition. Once the key drivers of value creation have been identified, the next step is to quantify the potential synergies. This can be done using a variety of methods, such as market research, financial analysis, and operational analysis.
Assessing financial and operational risks
After the potential collaborations have been quantified, another step is to measure the monetary and working risks of the subject. This assessment is important because it will determine whether or not the deal is feasible. The risks that are typically assessed include financial risks, such as the risk of overpaying for the target company, and operational risks, such as the risk of disruptions to the business.
Corporate transactions and global M&A strategies
Once the risks have been assessed and the deal has been deemed feasible, the next step is to develop a corporate transaction and global M&A strategy. This strategy will outline the steps that need to be taken in order to complete the deal. The strategy will also address the issue of how the acquired company will be integrated into the acquirer’s business.
Integrating the acquired company
After the deal has been completed, the next step is to integrate the acquired company into the acquirer’s business. This process can be challenging because it requires the two companies to work together to merge their operations, cultures, and systems.
The integration process typically begins with a transition period, during which the two companies operate as separate entities. During this transition period, the two companies will establish a joint management team, develop integration plans, and begin to implement the plans.
After the transition period, the two companies will begin to operate as one company. This process can be challenging because it requires the two companies to merge their operations, cultures, and systems.
The integration process typically includes the following four steps:
1. Establishing a joint management team: The joint management team is responsible for overseeing the integration process and ensuring that it is completed successfully.
2. Developing integration plans: The integration plans outline the steps that need to be taken in order to integrate the two companies.
3. Implementing the integration plans: The implementation of the integration plans is the process of actually merging the two companies. This process can be challenging because it requires the two companies to work together to merge their operations, cultures, and systems.
4. Evaluating the results of the integration: After the integration has been completed, the joint management team will evaluate the results. This evaluation will help to determine whether or not the integration was successful.
